The Significance of Moral Compass in Effective Leadership

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According to the Four Box model, leadership is one of the four systems of action in modern organisations. Research has proven that the morality of leadership plays an important role within the organisation environment. As a result of this, this paper shall examine how it is advantageous for leaders to have a strong moral compass, leveraged in decision making situations and inspiring and motivating the employees. Additionally, this paper shall also discuss how it is important for a leader to know when to combine hard power and soft power to exercise smart power, through which they gain the trust and respect of their subordinates. However, the scope of this paper is to examine why leaders with strong moral compass perform better than their peers, with the conclusion that transformational leaders are the most highly skilled in leading with strong morals and ethics.

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A research team from Georgia State University and Erasmus University conducted a study on moral leadership and analysed data from 1970 to 2018 to assess how a leader's morality influences the group's efficiency. They found that ‘leaders who value morality outperform their unethical colleagues, regardless of industry, company size or position (and that) leaders who prioritised morality had higher-performing companies with less turnover and their workers were more innovative, constructive, engaged and happy’ (Jose, 2018).

According to Engelbrecht and van Aswegen (2009), leadership ethics define the ethical climate within an organisation because the value system of the leader determines the moral direction (Johnson, 2009). Leaders are responsible for creating the climate in an organisation, either good or bad, which then reflects on the way employees feel about working in the organisation in the sense of the particular leadership approach they encounter. Leaders with a strong moral compass create a good climate of trust and empowerment where people want to excel and do their best. When the organisational climate is good, it’s easy to make moral decisions. Then, the leader can sometimes give the decision making authority to the subordinates, it shows the leader believes in them and it helps with motivating the subordinates.

Good morals and strong ethics are what is needed by a leader to make good judgement in any decision making situation. The choices made by leaders and how they react in a given situation are informed and influenced by their ethics (Northhouse, 2013). The study of U. S. Presidents Kenney and Nixon look into how individual moral identity can have an impact on leadership ethics in decision making. The study carefully examined how four key factors of family, peers, education, and religion could influence a leader’s ability to make ethical and unethical decisions (Nunn & Avella, 2015). The data analysis identified the emergent themes arising from these key factors leads to the creation of good or bad moral identity development (Nunn & Avella, 2015).

It’s important for a leader to know how and when to combine soft power and hard power to exercise smart power, through which they gain the trust and respect of their subordinate and mobilize them for a task ahead. In an interview with HBR senior editor Diane Coutu, Nye describes power as nothing more than the ability to affect others to get what you want, which entail some tools such as coercion, attraction, hard power and soft power. He argued that it’s quite difficult to think of a leader who led successfully using soft power or hard power alone, so they have to be a balance of both to lead successfully in the modern organisation. It is possible to argue that the difference between soft power and hard power is ‘choice’. For example, a commander giving a direct order to a junior military officer, that is hard power - the junior military officer has no choice than to obey the instruction of his commander. On the other hand, a leader leading by example and attracting his followers to do what he or she wants – that is a soft power.

According to Hersey and Blanchard's situational model of leadership, which suggest that leader behaviour should be adjusted to the maturity level of the followers. This is a very flexible model where leaders are encouraged to consider their subordinates, and also consider their work environment before making a decision. The model suggest that they are four main style of leadership which include; the telling style, a high task low relationship style where the leader tells the followers what to do and then supervises them on how to do it; selling style, a high relationship high task style where the leader sells the idea to his followers, persuading them, bringing them on board and motivating them; participating style, a high relationship low task style where the leader is another member of the group, equal and being very democratic; delegating style, a low task low relationship style where the leader simply let the subordinates take responsibility and decision making. According to the model, there is no one leadership style better than the other.

The power of leadership lies in the ability of the leader to form personal and meaningful bonds with the followers they lead (Javier Pladevall 2018, p. 2). Most leaders often rate themselves as inspiring and motivating, but most employees think otherwise. According to a survey published by Forbes, it was found out that about 65% of employees would do without a pay raise if it meant seeing their leader sacked. And a 2016 Gallup engagement survey also reveals that 82% of employees do not see their leaders inspiring and motivating.

A leader with a strong moral compass takes time to supports and encourage the team members, pays thoughtful attention to the needs of the employees. According to data from McKinsey & Company, employees tend to be naturally motivated when they are happy, committed and find satisfaction with their job. Working with committed people leads to a relationship of trust and respect, which will be of benefit to the growth of the organisation forward in the long run. A good example of this is the transformational leadership research by House and Howell reveals that transformational leader perform actions that will get their follower to really like them and attach emotions to them, they inspire motivation in their followers and tend to shape their values, the followers also subscribe to the values.

“The transformational leader aligns the altruistic values of his/her followers with his/her own, resulting in altruistic value congruence, which leads to higher levels of trust based relationships between leaders and followers” (Engelbrecht, 2002). “Thus, in order to gain trust, build commitment to his/her goals, and achieve exceptional levels of performance, the transformational leader should be perceived as sharing altruistic values” (Engelbrecht, 2002). According to research, transformational leaders exhibit seven behaviours - articulating an ideological vision that specifies a better future state; referring to distal rather than proximate goals; communicating messages that contain frequent references to values, moral justifications and the collective identity; communicating the followers’ worth and efficacy as individuals and as a group; behaviourally role modeling the values implied in the vision by personal example; expressing high-performance expectations of followers; communicating a high degree of confidence in followers’ ability to meet these expectations. They establish beliefs and values and consistently live in accord with them. They also develop self and others to the highest levels of potential.

In other to lead employees successfully, leaders must make use of leadership styles and behaviours that match the situation, and the needs and abilities of the followers they are trying to influence. As leaders we must understand the value of our moral compasses and teach our followers how to confront the hard and complicated moral dilemmas we may face. This is both a great responsibility and a great honour. Great leaders also know how to access the moral compass of their subordinates, to bring out the best in them. To thrive, today's companies need to expand and evolve more rapidly than ever before. And leaders who do not have a strong moral compass are likely to strive to live up to their values in this environment of so much change and uncertainty.

Moral compass plays a significant role in ethical leadership. Moral leadership organisations require employees to review their moral code and if in doubt, seek guidance from senior leaders in the organisation who, in turn, set the highest example of moral decision making. With detailed information from the top leaders in modern organisations, employees can make the right decisions rather than defaulting on the fastest way to increase profits or achieve business goals (Audra Bianca). A more universal standard of moral behaviour must be complied with to be an ethical leader (Thomas, 2001). No leader begins their career with a fully developed moral compass, ethical judgement develop over the years based on experience, and it begins with an understanding of one’s personal values. Before taking a leadership role in an organisation, they should ask themselves, 'Why do I want to lead?' and 'What's the purpose of my leadership?' These are simple questions but getting the right answer may take a long time (William, 2011). Leaders whose aim is to seek power over others, wealth, or the fame that comes with success tend to seek gratification from others, and often seem egotistical and self centered (William, 2011). A true leader value fair compensation for their accomplishments, then the money, power, and fame come along the way.

Moral compass is what separates an authentic leader from inauthentic leader, while the authentic leaders recognise their moral compass, the inauthentic leaders are the once who fail to recognize it. Authentic leaders, in the view of Gardner et al., are committed to “core ethical values” (2011, p. 1123). Authentic leaders’ reason and act morally, which in turn influence follower’s moral perspective and create the development of ethical climate in an organisation (May et al., 2003; Walumbwa et al., 2008). “An authentic leader is consistent in his behaviour and his inner thoughts and feelings” (Novicevic et al., 2006). “For example, if he says, ‘people are important to me,’ he would spend enough time with them; he is truthful and trustworthy who always keep his promises, etc” (A guide to developing enlightened leadership – 26 lessons from A to Z, 2007).

Leaders needs to focus on having a strong moral compass because they seem to be lack of it in today's business world. Morality of leadership starts from the top and it needs to be restored in every modern organisation. If leaders ang organisations today take the issue or moral compass seriously, they will immediately become more sensitive to followers needs and problems, thereby becoming more able to solve immerging conflicts. “Good leaders are designed by an enhanced capacity to feel morally obligated to a wide range of followers and this is not a skill, but knowledge and world perspective” (Ciulla, 2015). Every top leader in a modern organisation should incorporate morality into their leadership style. Moral compass should be treated with caution because what someone considers as moral may be immoral to some other people. Hence, it is necessary for leaders and organisations to open up and discuss these gaps in order to avoid potential misunderstandings and misunderstandings (Lemoine, 2018).

In conclusion, this paper has found that having a strong moral compass is essential and critically important to steer behaviour and decision making, especially in times of uncertainty. Morality is leadership is good for business in any modern organisation, but it requires leaders who have a broad view of the role that ethics play. Furthermore, if you want to be an authentic leader and have a meaningful life, you have to do the hard inner work of improving yourself, have a strong moral compass based on your beliefs and values, and work on issues that matter to you (Bill George, 2015). As a leader, the best way to hold on to your moral compass is to believe doing so is absolutely necessary for the good of the organisation. In my opinion, leading with a strong moral compass is, in fact, a much more ethical and beneficial practice for leaders today.

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