Business leaders make decisions each day: big and small, positive and negative. All of them affect employees, customers, shareholders, communities, and even society as a whole.
To make these decisions in moral and ethical ways, I believe we must adapt the essential qualities of a leader. Successful leaders today and in the decades to come must possess triple-threat leadership capability: IQ+EQ+DQ. In other words, they must possess a combination of two familiar attributes — intellect and emotional intelligence — and one that I believe must be recognized and elevated: decency.
Competency in business is essential, and intellect, which I refer to here as IQ, is probably the trait most commonly associated with successful business leadership. We aren’t talking just about an IQ test score, but about the broad idea of business competency and an understanding of what it takes to be successful today.
Most leaders are also familiar with the concept of EQ, which is the self-awareness of emotions, both others’ and your own. Possessing high EQ means a manager can understand how someone is feeling and can read a room and act on that information. However, EQ doesn’t mean a person’s actions take into account what is best for others. Emotional awareness and empathy don’t equate to compassion and integrity. People can have EQ yet use it to manipulate people for self-interest. EQ doesn’t always mean doing the right thing.
A decency quotient, or DQ, goes a step further than EQ. DQ implies a person has not only empathy for employees and colleagues but also the genuine desire to care for them. DQ means wanting something positive for everyone in the workplace and ensuring everyone feels respected and valued. DQ is evident in daily interactions with others. DQ implies a focus on doing right by others.
Ajay Banga, the CEO of Mastercard, was the first person to tell me about DQ, in a talk in front of our students at Duke University’s Fuqua School of Business. “IQ is really important. EQ is really important. What really matters to me is DQ,” Banga explained. “If you can bring your decency quotient to work every day, you will make the company a lot of fun for people — and people will enjoy being there and doing the right thing.”
Unfortunately, we have far too many examples in business of what happens when decency fails. The Great Recession is a case in point. Ten years later, business, particularly in the financial sector, is still trying to win back trust from a public who came to believe the industry was greedy, self-serving, and focused on the bottom line at the expense of the greater good. In fact, the 2019 Edelman Trust Barometer, which measures public trust in institutions, found that financial services is the least trusted industry, with just 57% of people surveyed indicating trust. However, that number has risen 2% in the last year — maybe in part because leaders are becoming intentional about understanding the culture in the financial sector that helped fuel the recession. The Federal Reserve Bank in New York has been actively working to address culture by convening business school and industry leaders to try to address the problem head-on and find long-term solutions (disclosure: I am part of that effort). It is that level of engagement at the highest levels in finance that may eventually win back public trust.
There are other examples of leaders embracing decency as well. Recently, I shared a stage with Bank of America CEO Brian Moynihan in an interview at Duke in front of our students. I asked him a question that elicited a few gasps from the audience, but didn’t throw Brian one bit:
How did Bank of America reduce headcount by almost 100,000 people since he became CEO, without a major public outcry?
Moynihan explained how technology has changed banking. Bank of America had about 5 million mobile users when he became CEO in 2010. Now, it has more like 26 million. Innovation in technology made a reduction in labor inevitable as customers were doing more online with fewer human interactions. Moynihan went on: “Then the question is, ‘How do you do it?’”
He and his team decided to let attrition — be it due to retirement or employees simply leaving for new jobs — be their friend. They decided not to automatically replace jobs as people left over a several-year horizon. Instead, when an employee left the company, the bank evaluated the best way to move forward. Sometimes that meant developing current team members by providing additional responsibilities and compensation. Sometimes it meant redesigning work for changing operational needs. Either way, this focus has allowed the firm to make important changes when it does have to lay people off. For example, cost savings allowed Bank of America to increase its severance pay to a year and a half for employees who have been with the company many years, and have also allowed it to increase outplacement programs. Further, these savings helped to boost some employee benefits like parental leave, bereavement leave, counseling support, and fertility and adoption resources and support.
In my view, Brian and his team approached the challenge of layoffs with decency. Because it was the guiding principle, their workers and customers felt supported and cared for — even during such a dramatic reduction of the workforce. The very things that create distrust, like job losses, were handled in a more humane way.
We’re entering an era where the possibility for distrust may be heightened. Technology, innovation, and automation are changing the very nature of work. Instead of letting them fracture us, we can use decency to find ways to move forward without leaving anyone behind. As leaders who are driven by decency innovate, they don’t consider just what’s being created; they consider what’s being destroyed. Innovation becomes about not just new solutions but also about helping those being displaced. Leaders with DQ understands their decisions aren’t simply about staying profitable; their decisions affect hundreds, thousands, or even millions of people’s lives.
If business can become more intentional about decency, I believe it can become a healing force our world so badly needs. It can begin to rebuild the trust that corporations have lost with employees and customers. It can be the model for how people who are very different come together to work with common purpose. It can help solve some of the world’s toughest problems by uniting people to find solutions. But for decency to win the day, DQ must be recognized as an essential quality in leadership. Intellect and emotional intelligence are vital, but it is decency that ensures IQ and EQ are used to benefit society, not tear it down.
By Bill Boulding
Trying to figure out a path forward, let alone focus on getting work done, in the face of a continuous stream of devastating news can feel impossible. Chances are that your team is feeling a host of emotions, from anger to despair to helplessness.
How do you deal with your inner critic? Everyone has one, but the difference between those who are successful and those who are not often connects back to whether or not their inner critic stops them from pursuing their hopes and dreams.
Today’s CEOs are operating in a new landscape, with society and business becoming more intertwined and a broader group of stakeholders registering their expectations and demands. In order to succeed, they must become a different kind of leader, looking beyond the company they steward to shape the ecosystem in which they operate.