A Critical Look at Leadership

World Energy

The development of true leaders requires something that is almost always in extremely short supply: people who help you sail through the rough waters, or tell you when the smooth sailing is making you too vulnerable to the next storm.

Leaders are people on whom you can count for advice based on "straight-goods" reality checks; people who will reinforce what you do well, and tell you when you can improve.

Now, I hope it won't be surprising that I believe that inspirational, visionary, ethical leadership is critical to the success of companies, countries and civilization.

And I think everyone is fully aware that excellence in leadership is difficult to attain, challenging to maintain and is, at times, harshly judged. All true.

Leadership is critical and it does take time to develop and it ought to be scrutinized by all of a leader's stakeholders.

My thoughts about leadership fall into three main categories: leadership influences I have known; the essential need to fuse leadership with ethics; and the importance of visionary leadership. As I present these thoughts, I'm acutely aware of what the mother whale said to her baby: "when you are spouting is when you are most likely to be harpooned."

Leadership Influences I Have Known

My arrival as the author of this article began several decades ago as a boy on a farm near the little southern Alberta prairie town of Carstairs. It was a modest beginning indeed, and one for which I will always be grateful.

Like many others, I owe the greatest debt to the examples, teachings and leadership of my mother and father. They taught me some simple yet potent lessons: keep your word; stay honest; do your best.

A few others that have stuck with me include: If the world deals you a tough blow, buck up and move on; self-pity is for losers, and it doesn't put bread on the table – at least it didn't in those days.

I didn't know it at the time, but I now know that my very modest upbringing was a great gift. It taught me self-reliance and a clear sense of responsibility to those who count on me.

And it gave me another gift that my wife Pat and I can never give our daughter – the opportunity to start with no money and no safety net, knowing full well that no matter where you get to, you can always look back on your beginnings as a reality "touchstone."

Pat was also raised very modestly in the same little Alberta prairie town. There is something we always say to each other on nights when life smiles on us to a degree beyond our wildest imaginings: "we're doing OK for two kids from Carstairs!"

It wasn't long after leaving that little town for the big city that I came to realize that the world was full of opportunities to build personal success. But it's only been in the past ten years or so that I've come to understand that the biggest sense of fulfillment lies in helping those around you to succeed.

No matter what you are doing, as long as you have at least one person working with you, you must succeed through one another.

And, after three decades of succeeding through the success of others, I have reached the stage where my main motivation is to inspire people to fulfill their career aspirations, raise their families and contribute to their communities and their country.

So, when it comes to leadership and success, I believe it is necessary to possess the basic potential, but I also believe it is necessary to recognize that we are all interdependent.

The gifts we give are the gifts we get. This is the way that individuals, families, communities, businesses – even countries – can grow stronger.

My parents strived to achieve what they could, gave me the gifts they could to build my character and my potential. And then handed the ball to me with an abiding vision that I would stand on their shoulders to reach a better future.

We see the type of basic process I am talking about today with some of Canada's immigrant families. One generation now is making sacrifices – cleaning buildings overnight, driving a cab 16 hours a day, putting their kids through school – to help bring greater success to the next generation.

Undeniable leadership, involving sacrifice and vision, at the grass roots level. Building a better future for a family, a community, or a country.

Fusing Leadership with Ethics

Now I want to move on to the topic of fusing leadership with ethics – and speaking of ethics, one must always choose one's words carefully, or there can be real translation problems.

 I'm reminded of the sign I saw in a Paris hotel that said, "Please leave your values at the front desk."

There is a crucial relationship between the building blocks of successful societies: leadership and ethics. Some don't see them as linked; in fact, some people take the view that some level of ethical transgressions are forgivable, as long as the leader achieves good results in his or her key responsibilities.

For example, I recently had an animated dinner argument with a New York Times columnist who argued that Bill Clinton's personal ethical transgressions, which include adultery and lying, were of lesser importance compared with his accomplishments as President.

Needless to say, we agreed to disagree, profoundly.

This sounds like the kind of viewpoint put forward by those who use the term "Rat Race" to describe the business world. Well, the trouble with letting yourself be part of the Rat Race is that even if you win it, you're still a rat!

So, I want to address the need to win the moral race instead.

What I will describe next will seem to many like common sense, but I think it very instructive, very powerful.

According to psychologist Lawrence Kohlberg and academic Carol Gilligan, moral development begins in childhood. It advances in stages and provides the basis for decisions about right and wrong over our lifetimes.

All of us – including corporate, political, even religious leaders – reach one level or another of moral development. And this, the two scientists say, affects our ethical decision-making.

Some of the study's results were published recently in the Calgary Herald. Mr. Kohlberg pioneered six stages of moral development, and Ms. Gilligan dedicated her work to expanding understanding of human morality.

Together, they refined six levels of leadership. I'd like to relate them here.

Levels one and two represent what they call "infantile" phases of development. But some people never grow up.

Level 1: What can I get away with? Actions are based on the likelihood of being caught and the severity of the punishment. A child might steal a chocolate bar, while a Level One leader might siphon shareholder money through slick accounting schemes.

Level 2: What's in it for me? Self-interest motivates ethical decision-making at this stage, with leaders focusing less on avoiding detection and punishment and more on maximizing personal gains. The Level 2 leader cares about his employees, customers or shareholders only to the extent they are needed for personal gain.

Levels 3 and 4 see some external practice of moral development, but still no internalized morality.

Level 3: How does this decision affect my relationships? Leaders at this level base moral decisions on how their choices will affect relationships with others. Moral decisions at this level can be hard because they can require people to be hurt, so decisions may be based on relationships, rather than merit or basic ethical principles.

Negative examples here could be a hockey coach choosing his best friend's kids first for ice time. More serious would be supporting a close colleague in a system of financial duplicity.

Level 4: How does this decision maintain fairness, order and uphold the law? Leaders at this level believe in the principle that following laws both in letter and spirit will contribute most to the common good. Leaders in this category value rules and can be said to do things above board.

Now, here at Level 4, we're getting close to truly ethical behaviour, but more in deference to authority than personal conviction. It's at Levels 5 and 6 where we see a fully developed internalized "Moral Compass."

Level 5: What are my responsibilities to society and others? Leaders here accept obligations to others as a given and tend to view common practices, rules and dictates with a critical eye. They operate according to inner principles, not based on self-interest, fear of punishment or dogmatic dictates of religion or culture. They have developed as truly ethical leaders.

And the "moral brass ring":

Level 6: What do I believe is the truly right thing to do? This stage is the full extension of Level 5. Leaders at this level are deeply aware of their consciences. They are principled and have the courage of their convictions. If rules, laws or societal requirements do not jibe with the leader's conscience, he or she will work to change them through inspiring communication and by walking the walk and exemplifying those values held. They will "manage by values," and place ethical behaviour as a fundamental criteria for all people and organizations they influence.

One of the most ethical leaders I ever worked with once said to me, "Gwyn, you will go a long ways, but always remember this: At the end of the day, the most important thing you'll be left with is your reputation."

I will never forget those words. They reflect a level of moral maturity, and a level of leadership authenticity, which makes the most positive difference in the world.

The Tier of Excellence

It is this tier of leadership that we must encourage young people to strive for. It is this tier of excellence that we in senior positions should strive for. And it is this tier of leadership excellence that we in Canada should demand of our business and public institutions.

Unfortunately, we are settling for less, as family and community members, as shareholders and as citizens.

My message is that we all have a responsibility to strive for Level 6 citizenship in our country and in the larger business communities in which we operate.

Because you can't separate the ethics of society as a whole from the ethics of those we choose to lead us. This is truly an example of you give what you get, and, you get what you give.

Ethics is everyone's responsibility. What we tolerate, we nurture. Now, I'd like to shift gears to another crucial characteristic of great leaders.

The Importance of Vision

An essay of mine on this topic appeared recently in Time Canada. Essentially, I offered a critical look at leadership with a view to shifting our corporate and political leaders from a short-term reactionary focus to true company or country building.

The Old Testament gave the world a universal truth: "Where there is no vision, the people perish." I believe that it is time for Canada's corporate and political leadership to go back to the Bible, figuratively at least, until they get this message straight.

I believe that in today's corporate world, we see an unhealthy focus on quarter-to-quarter results and day-to-day operations. This fixation on the short term almost always leads to failure in the long term.

Long-term performance requires a clear and thoughtful vision. It also often requires some sacrifice of short-term results. The same holds true in politics, where leaders often carry out their mandates by reacting to day-to-day events.

For corporate leaders, daily stock-price quotes, often an overnight scorecard of market emotion, measure short-term popularity. For political leaders, public-opinion polls become the reactionary Geiger counter that drives policy.

In both companies and countries, leadership focus on the short term leads to long-term decline.

Two Deadly Errors

In my view, business and political leaders who think in this short-term way commit two deadly errors. First, they opt for action without knowledge.

The great telecom-internet-fibre-optics "new economy revolution" mania drew irrational over-investment that cost thousands of jobs and billions of investor dollars.

The Canadian government ratified the Kyoto Protocol without any knowledge of whether it would actually help the environment, and so doing, ignores the fears of economic chaos from the vast majority of those who have to meet a private sector payroll.

These are business and government examples of the perils of taking action without knowledge.

The second deadly error is knowledge without action. In business, we have seen how misleading bookkeeping and accounting, the signs of which were known to many, have compromised the integrity of the securities market system.

In politics, institutionalized discrimination and dependency have failed our aboriginal people and deprived them of pride and initiative. This was known decades ago – but the same failed policies continue.

I believe that it is time to drive both these unsound mind-sets away – action without knowledge and knowledge without action.

I believe that they need to be replaced by vision, and I believe that we should expect our vision to exhibit "Level 5 and 6" ethical behaviour that rebuilds trust in our private and public institutions.

The Truth and Vision Test

What I have in mind is a kind of national "truth and vision" test to be carried out by boards and shareholders, and by political parties and voters.

It consists of only six simple questions: What is your vision for our company or our country? What actions will you take to achieve this vision, and why do you know that they are the right actions? What sacrifices will we need to make to get there with you?

How will we measure our progress in leading us to achieve this vision? And finally, what is your ethical track record? How do you intend to prove you will work for us, rather than yourself?

I say that if a leader cannot tell us these things, then no amount of charisma or smooth spin should convince us of fitness for office.

And now, I remind you once again of those words from the Old Testament: "without vision, the people perish."

Take careful note that this immortal trust just doesn't apply to leaders, but rather to "the people" as well. All of the people.

So this is where our vision as the people becomes important. It's tougher to insist on straight and honest answers than it is to accept smooth spins and sloganeering. It's tougher to face the reality that those who would focus on feel-good promises almost always fail to deliver.

But I am reminded of another old truism – most people get the leadership they deserve.

As president and chief executive officer of EnCana Corporation, Gwyn Morgan is responsible for establishing the vision and leadership for achieving world-class performance.  EnCana is the result of a merger of Alberta Energy Company and Pan Canadian Energy.  Mr. Morgan joined Alberta Energy Company (AEC) in 1975 during the start-up of operations and headed the oil and gas division until January 1994, when he became president and chief executive officer of AEC.  Under his leadership, AEC sold all non-oil and gas assets and implemented a decentralized business unit operating structure. AEC's growth, value and performance philosophy fostered substantial growth in both AEC's asset base and share value.
Mr. Morgan's career encompasses more than 30 years of technical, operational, financial and management positions in oil and gas exploration, production, marketing and pipelines.  He serves as a director for HSBC Bank North America, Lafarge North America, the Canadian Council of Chief Executives and the Institute of the Americas.  Other affiliations include the Board of Governors for the Council for Canadian Unity and the Board of Trustees for the Fraser Institute.
Mr. Morgan is a petroleum engineering graduate of the University of Alberta.  He served as Honorary Colonel (retired) of the 410 Tactical Fighter Squadron of the Canadian Air Force.  He has post-graduate qualifications that include completion of the Executive Business Program of Cornell University in New York State.

Gwyn Morgan
President and CEO<BR>EnCana Corportation