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Mike Root

Integrity Explained By Businessman and Philanthropist Walter Scott

January 19, 2012

A good friend of my parents is a gentleman by the name of Walter Scott. He is a remarkable businessman whose net worth qualifies him to be on the Forbes list of billionaires. He came by this fortune the old fashioned way --- he earned it. For years he was the head of Kiewit Construction, one of the world's largest privately held, employee owned, construction companies. Walter is also chairman of Level 3 Communications and sits on the Board of Berkshire Hathaway and Burlington Northern Railroad.

What has always impressed me about Walter Scott is what an astute, problem solver he is. Besides being a driving force in a number of successful businesses he also has been an incredible philanthropist in Nebraska. Many buildings and projects honor him and his wife Sue for their donations of time and money to get the big projects going. I respect him greatly for his willingness to give back.

Recently, Walter gave a talk to the Omaha Business Ethics Alliance that I wanted to share with you a synopsis. In many ways, his talk about his views on integrity is why he has been so successful in business. The rest of this article are quotes directly from the talk.

"To me, high ethical standards are like air. If the air is present, we don't think much about breathing. If it's absent, you notice right away. In the same way, we don't often notice ethical behavior; because it is assumed in those companies with high standards. It is much easier to spot poor ethics which is why we usually illustrate the subject with negative stories."

"... ethics reflect societal norms. Integrity on the other hand is a personal quality. It is difficult to conduct our businesses or our government institutions up to the ethical standards of the society in which we operate unless we employ people of integrity... It was my goal to hire and develop people with personal integrity; because people of integrity will uphold and perpetuate the ethical standards of our companies and the ethical standards of society."

Walter quotes his former boss, Peter Kiewit as saying "No matter how much native ability a man may have, no corporation dare employ him... unless he is fundamentally and entirely honest and trustworthy. Without this, his very ability is all the more dangerous."

"I believe there are potential problems for all firms...A big problem is that employees don't come to us the same as they did when I started my career. It's probably a big surprise to these kids when they get to the world of work and find out their performance will be judged. We can no longer assume employees come to us with the ethical toolkit of previous generations. Society in general has lowered its standards, but society's expectations for business are higher...

So what's the prescription for us as business leaders? Number one on my list is the tried and true --- start by hiring people of personal integrity. Number two is never assume an ethical culture will not automatically perpetuate itself. Any business organization is only one generation away from losing its ethical moorings...Number three is to have an open culture where it is recognized that mistakes do happen. In the world of politics our leaders learn --- or perhaps don't learn that its never the scandal that gets you. It's the cover up. The same is true of business. The measure of a company's character isn't that they can have a problem from time to time, because that will happen. Rather it is how they respond and whether they take immediate action to resolve the issue and ensure it doesn't happen again."

There is so much more in his talk including examples of these points. I have included a copy of the entire talk at this link

As always, let me know your thoughts below.