Comments welcome 4 November 2015

© Copyright 2008-2015. Werner Erhard, Michael C. Jensen, Landmark Worldwide. All rights reserved

Harvard Business School

Negotiation, Organizations and Markets
Research Papers

HARVARD NOM RESEARCH PAPER NO. 10-068

BARBADOS GROUP WORKING PAPER NO. 10-02

A New View of Integrity: A Life-Changing Model

(PDF file of PowerPoint Slides)

United States Air Force Academy presentation

9 October 2015
and
Sarasota, FL presentation
4 November 2015

WERNER ERHARD
Independent
[email protected]

MICHAEL C. JENSEN
Jessie Isidor Straus Professor Emeritus, Harvard Business School
Chairman, Co-Founder and Integrity Officer, SSRN
[email protected]

FAIR USE: You may redistribute this document freely, but please do not post the electronic file on the
web. We welcome web links to this document at: http://ssrn.com/abstract=2516603 We revise our
papers regularly, and providing a link to the original ensures that readers will receive the most recent
version. Thank you, Michael C. Jensen, Werner Erhard

Some of the material presented in this presentation is based on or derived from the consulting and program
material of the Vanto Group, and from material presented in the Landmark Forum and other programs offered by
Landmark Education LLC. The ideas and the methodology created by Werner Erhard underlie much of the
material.

Electroniccopy
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available at:
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Comments welcome 4 November 2015
© Copyright 2008-2015. Werner Erhard, Michael C. Jensen, Landmark Worldwide. All rights reserved

Abstract
There is far too much concern today about the conflicts of interest between people; for example,
agency theory (the conflicts of interest between agents and owners) -- a favorite topic of Jensen --
and not enough attention paid to the damage caused by an individual's conflict of interest with
himself or herself.

We argue here that a large amount of the damage inflicted on people and organizations is caused
by actions of individuals that are not in their own self interest. That is, people consistently impose
costs on themselves, their loved ones, friends, associates, partners, employers and the public by
actions that are not in their own self interest.

In this presentation we focus on the integrity issues that cause huge problems in the lives of most
individuals and to every one we come in contact with. These slides draw on the work on a new
model of integrity that is available at:
http://ssrn.com/abstract=920625
http://ssrn.com/abstract=1542759
http://ssrn.com/abstract=1511274

We present a positive model of integrity that, as we distinguish and define integrity, provides
powerful access to increased performance for individuals, groups, organizations, and societies.
Our model reveals the causal link between integrity and increased performance, quality of life,
and value-creation for all entities, and provides individuals and organizations access to that causal
link. Integrity is thus a factor of production as important as knowledge and technology, yet its
major role in productivity and performance has been largely hidden or unnoticed, or even ignored
by economists and others.
PDF file of Keynote slides for seminars at the Gruter Institute Conference on Values, Harvard Business School, June 2006; Simon
School of Business, U. of Rochester; Fisher College of Business, Ohio State University, Columbus, OH, Sept. 2006, Nottingham
College of Business, Nottingham, UK, ESADE Business School, Barcelona, Spain; HEC, Paris, France, Nov. 2006, Yale Symposium
on Corporate Governance, Inaugural Lecture, (Yale Law School and Yale School of Organization and Management), New Haven, CT,
January 2007, Gruter Institute Squaw Valley Conference: Law, Brain and Behavior, May 2007, Harvard Business School Negotiations
Organizations and Markets Seminar, Sept. 2007; Yale School of Management, Sept. 2007: MIT Sloan School of Management
Leadership Center, Cambridge, MA, Oct. 2007; Harvard Law School Law, Economics and Organizations Research Seminar,
Cambridge, MA, Oct. 2007; USC Marshall School of Business, Finance and Economics Dept. Distinguished Speaker Series, Nov.
2007; LeBow College Corporate Governance Conference, Philadelphia, PA, April 2008; Special Seminar Series, Business
Department, Juan Carlos III University, Madrid, Spain, April, 2008; Herbert Simon Lecture, Rajk Laszlo College, Corvinus
University of Budapest, Budapest, Hungary, April 21, 2008; Exeter at Said Business School, Oxford, UK, April 24, 2008; U. of
Rochester Simon School of Business Alumni Seminar, NYC, May 5, 2008; DePaul U. Kellstdat School of Business, Chicago, IL, May
8, 2008; 1st IESE Conference on Humanizing the Firm and the Management Profession, IESE Business School, Barcelona, Spain,
July 2, 2008 Stern Stewart International Finance Summit, Cape Town, South Africa, July 31, 2008; Concordia University John
Molson School of Business, Montreal, Quebec, CA Sept. 16, 2008; Institute of Corporate Directors Conference on Governance and
Financial Markets in North America, Montreal, Quebec, CA, Sept. 19, 2008; Duisenberg School of Finance, Amsterdam, Netherlands,
Oct. 14, 2008; Paduano Faculty Research Symposium in Business Ethics, Stern School of Business, New York, Oct. 23, 2008; Olin
School of Business Faculty Forum Sponsored by the Center for Research in Economics and Strategy and the Center for the Study of
Ethics and Human Values, Washington University, St. Louis, MO, Nov. 6, 2008; Fisher School of Business, Ohio State U., Columbus,
OH, Nov. 7, 2008; United States Air Force Academy, Platinum Series, Colorado Springs, CO, Jan. 21, 2009; Texas A&M
Distinguished Lecture Series, College Station, TX, Feb. 10, 2009; Social Innovation Research Seminar Series, INSEAD,
Fontainebleau, France, March 16, 2009; Distinguished Scholar/Teacher Lecture Series, McCombs School of Business, U. of Texas,
Austin, Texas, Nov. 12, 2009; Hankamer School of Business, Baylor University, Waco, TX, Nov. 13, 2009; Stanford Law School,
Palo Alto, CA, the Morrison & Foerster Lecture in Honor of Marshall Small, Feb. 11, 2010; Wake Forest Schools of Business,
Winston-Salem, NC, Jan. 31, 2011; IESE – F. BBVA Economics for Management Lecture Series, Madrid, Spain, May 17, 2011;
Erasmus University, Symposium at the Occasion of the Emiritate of Richard De Mulder, Rotterdam, NL, July 21, 2011; SMU COX
School of Business, SMU, Dallas, TX, April 27, 2012; ; US Embassy & Insigniam, Bankok, Thailand, May 1, 2012; American
Chamber of Commerce and Insigniam, Bankok, Thailand, May 2, 2012: American Chamber of Commerce and Insigniam, Hong
Kong, May 4, 2012, Financial Management Association, Keynote Lecture, Istanbul, Turkey, June 7, 2012; SeaportGroup, NYC, July
16, 2012; Academy of Management, Boston, MA, August 6, 2012; Financial Executives Institute, Dallas, TX, January 8, 2013;
Kellogg School of Management/Aspen Institute Business and Society Conference, Kellogg School, Northwestern U., Evanston, IL,
March 7, 2013; Hutchinson Lecture, Lerner College of Business and Economics, Newark, DE, March 11, 2013; Pamplin College of
Business, Virginia Tech University, May 1, 2014; United States Air Force Academy, September 10, 2015; Sarasota, FL, November 4,
2015

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Integrity: The Foundation of A Leader
Presented by Dr. Michael C. Jensen

From the Course:

Being A Leader And The Effective

Exercise Of Leadership:

An Ontological / Phenomenological Model

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 2

+
A New View of Integrity:
A Life-Changing Model

Werner Erhard
Independent

Michael C. Jensen
Jessie E. Straus Professor of Business Administration, Emeritus,
Harvard Business School

VerifFacts 2016 Symposium

Newport Beach, CA
24 February 2016
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3

The Law of Integrity

Integrity as defined in the dictionary is the state of being
whole, complete, unbroken, unimpaired, sound, in perfect
condition.
Our Law of Integrity states:
As integrity (being whole and complete) declines, workability
declines, and as workability declines the opportunity for
performance declines.
Thus the maximization of whatever performance measure you
choose requires integrity – from the quality of your life, to your
effectiveness in life.
Attempting to violate the Law of Integrity generates painful
consequences just as surely as attempting to violate the law of
gravity.
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4

The Law of Integrity (Cont’d)

Put simply (and somewhat overstated):
“Without integrity nothing works”.
Think of this as a heuristic.
If you or your organization operate in life as though this
heuristic is true, performance will increase dramatically.
And the impact on performance is huge: easily 100% to 500%.
And, by the way, you can forget about having integrity until
any “out of integrity” occurs for you as a diminution of yourself.

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5

What is Integrity for a Person?

Integrity for a person is a matter of that person’s word,
nothing more and nothing less.
For a person to have integrity, the word of that person must be
whole, complete, unbroken, unimpaired, sound, in perfect
condition.
The question is, in the matter of integrity what constitutes your
word?

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6

Integrity: Your Word Defined

1. What You Said: Whatever you said you will do, or will not
do (and in the case of do, doing it on time). (Note:
Requests of you become your word unless you have
responded to them in a timely fashion.)
2. What You Know: Whatever you know to do, or know not to
do, and if it is do, doing it as you know it is meant to be
done (and doing it on time), unless you have explicitly said
you will not do so.
3. What Is Expected (Unexpressed Requests Of You):
Whatever you are expected to do or not do by anyone with
whom you desire to have a workable relationship, and in
the case of do, doing it on time, unless you have explicitly
said to the contrary. (Note: What you expect of others is
not for you their word – with others, you must change your
unexpressed requests into explicit requests.)
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7

Integrity: Your Word Defined (Cont’d)

4. What You Say Is So: Whenever you have given your word
to others as to the existence of some thing or some state of
the world, your word includes being willing to be held
accountable that the others would find your evidence
makes what you have asserted valid for themselves.
5. What You Stand For: That is, what you say that your life is
about and for what you can unquestionably be counted on
– whether expressed in the form of a declaration made to
one or more people, or even to yourself, as well as what
you allow people to believe that you stand for, is a part of
your word.
6. Moral, Ethical, And Legal Standards: The moral, ethical,
and legal standards which you have not explicitly declined
are a part of your word.
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8

Integrity is Honoring Your Word, and

Honoring Your Word Is
1. Keeping your word, and on time
OR:
2. Whenever you will not be keeping your word, just as soon
as you become aware that you will not be keeping your word
(including not keeping your word on time) saying to
everyone impacted:
a. that you will not be keeping your word, and
b. that you will keep that word in the future, and by when, or,
that you won’t be keeping that word at all, and
c. what you will do to deal with the impact on others of the
failure to keep your word (or to keep it on time).
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9

Integrity and Performance

As this new model of integrity points out, integrity is the state
or condition of being whole, complete, unbroken, unimpaired,
sound, in perfect condition. Such a state is the necessary and
sufficient condition for workability. And, workability is a
necessary condition for performance. As a result, it becomes
clear that integrity determines the opportunity set for
performance.
Yet one only needs to read the newspaper to be clear about
the almost universal lack of integrity. How can this be?
The answer is: The fact that integrity determines one’s
opportunity for performance is concealed by what
(paraphrasing Rawls) we term the “veil of invisibility”. There
are eleven factors that contribute to this veil of invisibility. We
will discuss some, but not all of these in some detail below.
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10

First Let Us Consider What Is It Like To Be a Person of

Integrity – To Be Whole and Complete As A Person?
As we said, at least in the matter of integrity, who you are is
your word, nothing more and nothing less. However, in a very
real sense, who you are period is your word.
You have very little dominion over your mental state,
emotional state, physical state, or even what you think or
remember (what comes to mind), but you do have something
to say about what comes out of your mouth.
Given that your word is that over which you do have dominion,
it is, as we said, not too much to say that who you are is your
word.
Perhaps the most important aspect of being out-of-integrity is
the loss of self, or if that is too much for you to take in, then
the loss of power.
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11

What Is It Like To Be Whole and

Complete As A Person? (Cont’d)
In a very real sense you are your word. When you are out-of-
integrity as a person, you are as a person less than whole,
complete, unbroken, unimpaired, sound, in perfect condition.
Instead of being a person of power, because you have lost
your power, you are left being a person of force.

When you honor your word to yourself and others:

You are at peace with yourself, and therefore act from a place
where you are at peace with others and the world, even those
who disagree with you or who you might ordinarily feel
threatened by.
You live without fear for your self, that is who you are as a
person. There is no fear of losing the admiration of others.
You do not have to be right; you act with humility. © Copyright 2008-2015 W. Erhard, M. Jensen. All rights reserved.

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12

What Is It Like To Be Whole and

Complete As A Person? (Cont’d)
Everything or anything that someone else might say is OK for
consideration, no need to defend or explain yourself, or
rationalize yourself. You are able to learn.
This state is often mistaken as mere self-confidence rather
than the true courage that comes from being whole and
complete – that is, comes from being a man or woman of
integrity. This is a critically important element of being a
leader.

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13

A Picture of Integrity
What would your life be like, and what would your
performance be, if it were true that:
• You have done what you said you would do and you did it
on time.
• You have done what you know to do, you did it the way it
was meant to be done, and you did it on time.
• You have done what others would expect you to do, even if
you never said you would do it, and you did it on time, or
about this or that expectation of theirs, you have informed
them that you will not meet this or that expectation.
• And you have informed others of your expectations of them
by making explicit requests to those others.

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14

A Picture of Integrity (Cont’d)

And, whenever you realized that you were not going to do any
of the foregoing, or not going to do it on time:
• You have said so to everyone who might be impacted, and
you did so as soon as you realized that you wouldn't be
doing it, or wouldn't be doing it on time, and
• If you were going to do it in the future you have said by
when you would do it, and
• You have dealt with the consequences of your not doing it
on time, or not doing it at all, for all those who are impacted
by your not doing it on time, or not doing it at all.

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15

A Picture of Integrity (Cont’d)

In a sentence, you have done what you said you would do, or
you have said you are not doing it; you have nothing hidden,
you are truthful, forthright, straight and honest. And you have
cleaned up any mess you have caused for those depending
on your word.
And Almost Unimaginable:
What if others operated in this way with you?

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16

The Veil of Invisibility That Conceals the Source of

the Actual Costs of Out of Integrity Behavior
Almost all people, and organizations fail to see the costs
imposed by violations of the Law of Integrity. I can say with a
great deal of certainty that there is no person in this room
today that is a person of full integrity. And that includes me (as
well as my co-author Werner).
Being a person of integrity is a “mountain with no top”. More
on this important fact a bit later.
The unworkability generated by the lack of integrity occurs to
people and organizations as the consequence of something
other than violations of the Law of Integrity.
For most of us the breakdowns and confusion – that is the
mess in our lives – is just the way life is, like water to fish or air
to birds.
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17

Costs of a Lack of Integrity and The Veil of Invisibility

Most people rationalize or explain the mess in their
organizations and in their lives without getting to the out-of-
integrity behavior that is the actual source.
This state of affairs is an example of:
You cannot manage what you do not distinguish. As a
result, what you do not distinguish will run you.
Consider the following.
When you rationalize or explain an unworkability in your life (or
blame others or the circumstances, or pass it off as “life is
tough”), when in fact any unworkability in your life is likely to
be a product of out-of-integrity behavior . . .
You have no access to the source of the unworkability.

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18

Costs of Lack of Integrity and The Veil of Invisibility

The “Integrity-Performance” Paradox:

People and organizations, while committed to performance,
systematically sacrifice integrity in the name of increasing
performance and thereby reduce performance.
How can this occur?
If operating with integrity is so productive, why do people
systematically sacrifice their integrity and suffer the
consequences? And, why are they blind to these effects?
We now review the 11 factors that generate the “Veil of
Invisibility” that conceals the damaging effects of out-of-
integrity behavior on our lives.

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19

The Veil of Invisibility

For example, one of the factors contributing to this veil of
invisibility is self-deception – a self-deception that leads
almost all of us to believe that we are men or women of
integrity. If you take your integrity for granted (even with this
and that instance to prove it), you are virtually guaranteed to be
out of integrity.
There will be opportunities in life for you to see this factor in
yourself.
Mastering the eleven factors contributing to the veil of
invisibility in your life will leave you with an authentic
opportunity to be a person of integrity.
And as we indicated earlier, without integrity you can forget
about being an effective leader.

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20

Eleven Factors that Contribute to the Veil of Invisibility

1. Not seeing that who you are as a person is your word
That is, thinking that who you are as a person is anything
other than your word. For example, thinking that who you are
is your body, or what is going on with you internally (your
mental/emotional state, your thoughts/thought processes and
your bodily sensations), or anything else you identify with such
as your title or position in life, or your possessions, etc…
leaves you unable to see that when your word is less than
whole and complete you are diminished as a person.
A person is one constituted in language.
As such, when a person's word is less than whole and
complete he or she is diminished as a person.

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21

Eleven Factors that Contribute to the Veil of Invisibility

1. Not seeing that who you are as a person is your word
Integrity and One’s Relationship to One’s Self, and Others
It is my word through which I define and express myself, both
for myself, and for others.
It is not too much to say that who I am is my word, both who I
am for myself and who I am for others.
It follows that, in order to be whole and complete as a person,
my word to myself and others must be whole and complete.

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22

Eleven Factors that Contribute to the Veil of Invisibility

1. Not seeing that who you are as a person is your word
Attempting to violate the Law of Integrity, that is, not honoring
your word to yourself and others, results in Self Disintegration.
And Self Disintegration limits “what you can be”.
Said another way, each out-of-integrity act reduces your
opportunity for performance.
Thus reducing “what it is possible for you to be”.
And, each out-of-integrity act also reduces your ability to
realize what “it is possible for you to be” in that now-shrunken
opportunity set.

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23

Eleven Factors that Contribute to the Veil of Invisibility

2. Living As If My Word Is Only What I Said (Word 1) and
What I Assert Is True (Word 4)
Even if we are clear that in the matter of integrity our word
exists in six distinct ways, most of us actually function as if our
word consists only of what I said or what I assert is true.
This guarantees that we cannot be men or women of integrity.
For us, Words 2, 3, 5, and 6 are invisible as our word:
• Word-2: What You Know to do or not to do
• Word-3: What Is Expected of you by those with whom
you wish to have a workable relationship (unless you have
explicitly declined those unexpressed requests)
• Word-5: What You Stand For
• Word-6: Moral, Ethical and Legal Standards of each
society, group, and governmental entity of which I am a
member
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24

Eleven Factors that Contribute to the Veil of Invisibility

2. Living As If My Word Is Only Word 1 and Word 4
When we live (function in life) as though our word is limited to
Word 1: What I Said and Word 4: What I say is so, we are
virtually certain to be out of integrity with regard to our word as
constituted in Words 2, 3, 5 and 6.
In such cases, all the instances of our word (be it the word of
an individual or organization) that are not spoken or otherwise
communicated explicitly are simply invisible as our word to
such individuals or organizations. In our lives, all instances of
our Words 2, 3, 5 and 6 simply do not show up (occur) for us
as our having given our word.

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25

Eleven Factors that Contribute to the Veil of Invisibility

3. Seeing Integrity as a virtue
For most people and organizations integrity exists as a virtue
rather than as a necessary condition for performance.
As a virtue, integrity is easily sacrificed when it appears a
person or organization must do so to succeed.
For many people virtue is valued only to the degree that it
engenders the admiration of others, and as such it is easily
sacrificed especially when it would not be noticed or can be
rationalized.
Sacrificing integrity as a virtue seems no different than
sacrificing courteousness, or new sinks in the men’s room.

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26

Eleven Factors that Contribute to the Veil of Invisibility

4. Self Deception about being out of integrity
People generally do not see when they are out of integrity. In
fact they are mostly unaware that they have not kept their
word. What they see is the “reason”, rationalization, or
excuse for not keeping or honoring their word.
In fact, people systematically deceive (lie to) themselves about
who they have been and what they have done. As Chris
Argyris, after four decades of studying human nature,
concludes:

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27

Eleven Factors that Contribute to the Veil of Invisibility

4. Self Deception about being out of integrity
“Put simply, people consistently act inconsistently, unaware of
the contradiction between their espoused theory and their
theory-in-use, between the way they think they are acting and
the way they really act.” (Argyris, 1991)
And if you think this is not you, you are fooling yourself about
fooling yourself.
Because people cannot see their out-of-integrity behavior, it is
impossible for them to see the actual cause of the
unworkability in their lives and organizations — the direct
result of their own attempts to violate the Law of Integrity.

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28

Eleven Factors that Contribute to the Veil of Invisibility

5. Integrity Is Keeping One’s Word
The belief that integrity is keeping one’s word – period –
leaves no way to maintain integrity when it is not possible, or
when it is inappropriate, or one simply chooses not to keep
one’s word.
And that leads to concealing not keeping one’s word which
adds to the veil of invisibility about the impact of attempts to
violate the Law of Integrity.

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29

Eleven Factors that Contribute to the Veil of Invisibility

6. FEAR of acknowledging you are not going to keep your
word
When maintaining your integrity (by acknowledging that you
are not going to keep your word and cleaning up the mess that
results) occurs for you as a threat to be avoided (like it was
when you were a child), rather than simply a challenge to be
dealt with, then you will find it difficult to maintain your
integrity.
When not keeping their word, most people fear the possibility
of looking bad and the consequent loss of power and respect.
They choose the apparent short-term gain of avoiding the fear
by hiding that they will not keep their word. This conceals the
long-term loss caused by attempts to violate the Law of
Integrity.
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30

Eleven Factors that Contribute to the Veil of Invisibility

6. FEAR of acknowledging you are not going to keep your
word
Thus out of fear we are blinded to (and therefore mistakenly
forfeit) the power and respect that accrues from
acknowledging that one will not keep one’s word or that one
has not kept one’s word.
When maintaining your integrity (by acknowledging that you
are not going to keep your word and cleaning up the mess that
results) occurs for you as a threat to be avoided, rather than
simply a challenge to be dealt with, then you will find it difficult
to maintain your integrity

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31

Eleven Factors that Contribute to the Veil of Invisibility

7. Integrity is not seen as a factor of production.
Leading people to make up false causes and unfounded
rationalizations as the source(s) of failure.
Which in turn conceals the attempted violations of the Law of
Integrity as the source of the reduction in the opportunity for
performance that results in failure.
No one would ignore that human and physical capital are
critical components of a well-functioning enterprise. Yet
integrity is at least as important to success as human and
physical capital and we are almost universally blind to that
fact..

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32

Eleven Factors that Contribute to the Veil of Invisibility

8. NOT Doing a Cost/Benefit Analysis on GIVING One’s
Word
When giving their word, most people do not consider fully what
it will take to keep that word. That is, people do not do a cost/
benefit analysis on giving their word.
In effect, when giving their word, most people are merely
SINCERE (well-meaning) or placating someone, and don’t
even think about what it will take to keep their word. This
failure to do a cost/benefit analysis on giving one’s word is
IRRESPONSIBLE.
Such irresponsible giving of one’s word is a major source of
the mess left in the lives of people and organizations. Indeed
people often do not even KNOW they HAVE given their word.

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33

Eleven Factors that Contribute to the Veil of Invisibility-8

8. NOT Doing Cost/Benefit Analysis on GIVING One’s
Word
People generally do not see the giving of their word as:
“I AM going to MAKE this happen”
If you are not doing this you will be out of integrity.
Generally people give their word INTENDING to keep it. That
is, they are merely sincere.
If anything makes it difficult or even inconvenient to deliver,
then they provide REASONS instead of results and they do
not clean up the mess.

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34

Eleven Factors that Contribute to the Veil of Invisibility

9. DOING Cost/Benefit Analysis on HONORING One’s
Word
Integrity, Trust and the Economic Principle of Cost/Benefit
Analysis -- If I apply cost/benefit analysis to honoring my word,
I am either out of integrity to start with because I have not
stated the cost/benefit contingency that is in fact part of my
word (I lied), or to have integrity when I give my word, I must
say something like the following:
“I will honor my word when it comes time for me to honor my
word if the costs of doing so are less than the benefits.”
Such a statement, while leaving me with integrity is unlikely to
engender trust.
In effect I just told you that I am an unmitigated
opportunist.
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35

Eleven Factors that Contribute to the Veil of Invisibility

9. DOING Cost/Benefit Analysis on HONORING One’s
Word
In fact, I have given you my word that you cannot trust me to
honor my word.
At best you are left guessing what costs and benefits I will be
facing when it comes time for me to honor my word.
And if the costs are greater than the benefits (as I see them) I
will not honor my word.
Therefore I would be for you an untrustworthy person. My
word means nothing.
The Bottom Line: If you choose to be a person of integrity, you
have no choice when it comes time to honor your word.

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36

Eleven Factors that Contribute to the Veil of Invisibility

9. DOING Cost/Benefit Analysis on HONORING One’s
Word
Nevertheless, the following economic prediction is highly likely
to be consistent with observed behavior: As the apparent or
immediate costs of being in integrity rise, more people or
organizations will be out of integrity (and vice versa).
The problems in education and business thinking arise when
we do not hammer home the personal and organizational
dangers of applying cost/benefit thinking to honoring one’s
word.
We then inadvertently teach or induce students, employees
and managers to NOT see the costly consequences of out of
integrity behavior.

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37

Eleven Factors that Contribute to the Veil of Invisibility

9. DOING Cost/Benefit Analysis on HONORING One’s
Word
To Repeat: In order to be in integrity you must apply cost/
benefit analysis to giving your word.
If I take on integrity as who I am, then I should and will think
carefully before I give my word, and I will recognize I am
putting myself at risk when I do so.
And I will never give my word to two or more things that are
mutually inconsistent.

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38

Eleven Factors that Contribute to the Veil of Invisibility

9. DOING Cost/Benefit Analysis on HONORING One’s
Word
In a very real sense being a person of integrity starts with me
giving my word to myself: My word to myself that I am a
person of integrity.
And when I actually give my word I say to myself: “I am going
to make this happen”, not: “I am going to try to make this
happen” or “I hope this will happen”.
As Yoda says in “Star Wars”: “DO or DO NOT, there is no
TRY.”

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39

Eleven Factors that Contribute to the Veil of Invisibility

10. Integrity is a Mountain with No Top
People systematically believe that they are in integrity, or if at
any given moment they are aware of being out of integrity,
they believe that they will soon get back into integrity.
In fact integrity is a mountain with no top. However, the
combination of 1) generally not seeing our own out-of-integrity
behavior, 2) believing that we are persons of integrity, and 3)
even when we get a glimpse of our own out-of-integrity
behavior, assuaging ourselves with the notion that we will
soon restore ourselves to being a person of integrity keeps us
from seeing that in fact integrity is a mountain with no top.
To be a person of integrity requires that we recognize this and
“learn to enjoy climbing”.

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40

Eleven Factors that Contribute to the Veil of Invisibility

10. Integrity is a Mountain with No Top
One would have to be in integrity with respect to every
instance of Words 1 through 6 at every moment in time.
• W-1: What You Said
• W-2: What You Know to do or not to do
• W-3: What Is Expected of you (unexpressed requests of
you) by each of those with whom you wish to have a
workable relationship (unless you have explicitly declined
that expectation)
• W-4: What You Say Is So
• W-5: What You Stand For
• W-6: The Moral, Ethical and Legal Standards of each
society, group, and governmental entity of which I am a
member
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41

Eleven Factors that Contribute to the Veil of Invisibility

10. Integrity is a Mountain with No Top
Thus, we had better enjoy climbing because this truly is a
mountain with no top.
Notice that every time we put something into integrity in our
lives or organizations, workability and the opportunity for
performance increase.
The effect is huge, and yet we will never get it all done.
Therefore, to repeat, we better learn to enjoy climbing.

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42

Eleven Factors that Contribute to the Veil of Invisibility

10. Integrity is a Mountain with No Top
Knowing that integrity is a mountain with no top, and being
joyfully engaged in the climb, leaves us as individuals with
power, and leaves us known by others as authentic, and as
men or women of integrity.
Knowing that we will never “get there” also opens us up to
tolerance of (and an ability to see and deal productively with)
our own out-of-integrity behavior as well as that of others.

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43

Eleven Factors that Contribute to the Veil of Invisibility

11. Not having your word in existence when it comes time
to keep your word
“A major source of people saying, ‘Talk is cheap’, is that when
it comes time for most people to keep their word, their word
exists in a place that does not give them a reliable opportunity
for keeping their word and on time.
“Most people have never given any thought to where their
word went after they closed their mouth, that is to say, where
their word is when it comes time for them to keep their word.
This is a major source of out-of-integrity behavior for
individuals, groups and organizations”.

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44

Eleven Factors that Contribute to the Veil of Invisibility

11. Not having your word in existence when it comes time
to keep your word

• If you don’t have an extraordinarily powerful answer to the

question, “Where Is My Word When It Comes Time For Me
To Keep My Word?”, you can forget about being a person of
integrity, much less a leader and realizing a created future.

• In order to realize the created future, you will need a way to

keep the word you gave regarding the created future in
existence.

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45

Eleven Factors that Contribute to the Veil of Invisibility

11. Not having your word in existence when it comes time
to keep your word

• What is the first step (next action) you are going to take
after you have given your word?

• By when will you take this first step (next action)?

• Create a “now” in which to do it.

• Finally, ensure the “now” exists for you in such a way that
you will reliably take that first step.

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46
XXX
Leading the Realization of a Created Future
Realizing a future that wasn’t going to happen anyhow
(therefore a created future) is central to leadership.
Commitment alone is not going to realize a created future.
Once the created future is articulated, what it takes to realize
that future is action. Without action, nothing happens. The
source of performance is action – nothing more, nothing less.
For action to take place, you need 1) an opportunity for action
and 2) a method for managing the integrity of the execution of
the required actions. In order to realize the created future,
what is now required is managing with integrity the opportunity
for and the execution of the accepted requests for action and
promises for action. To do so, each person who must act
needs a powerful answer to the question,
Where Is My Word When It Comes Time For Me To Keep
My Word?
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47
XXX
Where is My Word When it Comes Time for Me
to Keep My Word?
“We all know that when we give our word, our word is so to
speak in our mouths (and if we are awake, then also in our
ears in being aware that we have just given our word). When
one is giving one’s word, one’s word exists in one’s mouth, but
exists there only for the duration one is speaking.
“The question is where does your word go – where does your
word exist – after you have closed your mouth? More
critically, the question is where is your word when it comes
time for you to keep your word? ”
To be a person or organization of integrity one must create a
system to ensure your word is visibly in existence when the
time comes to keep that word.

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48 THE GOLDEN RULE AND INTEGRITY

The Golden Rule and Integrity

The Golden Rule:
“Do unto others as you would have them do unto you.”
A world in which everyone followed the golden rule would be
wonderful. However, one is left depending on the good will of
others to benefit personally.

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49 THE GOLDEN RULE AND INTEGRITY

The Golden Rule and Integrity

In contrast integrity is something one does for oneself. It is
actionable and does not require the cooperation of others.
It pays one to behave with integrity even if those around you
do not, because those around you will trust you and that is
valuable to you.
Integrity is privately optimal and does not make one into a
Pollyanna that can be preyed upon.
Just because you behave with integrity does not mean that
you trust those around you who do not behave with integrity.
You are not a Pollyanna.
Integrity leads to workability, greater performance, greater
value and joy; and in the equilibrium that results something
close to the Golden Rule will be realized.
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50

REVIEW: What Is It Like To Be a Person of Integrity –

To Be Whole and Complete As A Person?
As we said, at least in the matter of integrity, who you are is
your word, nothing more and nothing less. However, in a very
real sense, who you are period is your word.
You have very little dominion over your mental state,
emotional state, physical state, or even what you think or
remember (what comes to mind), but you do have something
to say about what comes out of your mouth.
Given that your word is that over which you do have dominion,
it is, as we said, not too much to say that who you are is your
word.
Perhaps the most important aspect of being out-of-integrity is
the loss of self, or if that is too much for you to take in, then
the loss of power.
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51

What Is It Like To Be Whole and Complete

As A Person?
In a very real sense you are your word. When you are out-of-
integrity as a person, you are as a person less than whole,
complete, unbroken, unimpaired, sound, in perfect condition.
Instead of being a person of power, because you have lost
your power, you are left being a person of force.

When you honor your word to yourself and others:

You are at peace with yourself, and therefore act from a place
where you are at peace with others and the world, even those
who disagree with or who you might ordinarily feel threatened
by.
You live without fear for your self, that is who you are as a
person. There is no fear of losing the admiration of others.
You do not have to be right; you act with humility. © Copyright 2008-2015 W. Erhard, M. Jensen. All rights reserved.

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52

What Is It Like To Be Whole and

Complete As A Person?
Everything or anything that someone else might say is OK for
consideration, no need to defend or explain yourself, or
rationalize yourself, you are able to learn.
This state is often mistaken as mere self-confidence rather
than the true courage that comes from being whole and
complete – that is, comes from being a man or woman of
integrity. This is a critically important element of being a
leader.

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53

Review: A Picture of Integrity

What would your life be like, and what would your
performance be, if it were true that:
• You have done what you said you would do and you did it
on time.
• You have done what you know to do, you did it the way it
was meant to be done, and you did it on time.
• You have done what others would expect you to do, even if
you never said you would do it, and you did it on time, or
about this or that expectation of theirs, you have informed
them that you will not meet this or that expectation.
• And you have informed others of your expectations of them
and have made explicit requests to those others.

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54

Review: A Picture of Integrity

And, whenever you realized that you were not going to do any
of the foregoing, or not going to do it on time:
• You have said so to everyone who might be impacted, and
you did so as soon as you realized that you wouldn't be
doing it, or wouldn't be doing it on time, and
• If you were going to do it in the future you have said by
when you would do it, and
• You have dealt with the consequences of your not doing it
on time, or not doing it at all, for all those who are impacted
by your not doing it on time, or not doing it at all.

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55

Review: A Picture of Integrity

In a sentence, you have done what you said you would do, or
you have said you are not doing it; you have nothing hidden,
you are truthful, forthright, straight and honest. And you have
cleaned up any mess you have caused for those depending
on your word.
And Almost Unimaginable:
What if others operated in this way with you?

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Learn more at www.BeingALeader.net

Or visit us at the ‘Being A Leader’ booth

in the lobby.

Being A Leader And The Effective

Exercise Of Leadership:
An Ontological / Phenomenological Model

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57

References
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Dennett, Daniel C. 1987. The Intentional Stance. Cambridge, MA: MIT Press, p. 6
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Accessed 6 March, 2015. http://edge.org/conversation/life-is-the-way-the-animal-is-in-the-world.
Erhard, Werner, Michael C. Jensen, Kari Granger. 2011. “Creating Leaders: An Ontological/
Phenomenological Model”. In The Handbook for Teaching Leadership : Knowing, Doing, and Being,
edited by S. Snook, N. Nohria, and R. Khurana. Thousand Oaks: Sage Publications. The revised
and up-to-date Chapter 16 is available at http://ssrn.com/abstract=1681682
Erhard, Werner, Michael C. Jensen, Steve Zaffron, Kari L. Granger, Course Materials for: Being a
Leader and the Effective Exercise of Leadership - An Ontological / Phenomenological Model
(October 14, 2010). Harvard Business School NOM Working Paper No. 09-038; Simon School
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http://ssrn.com/abstract=1263835
Erhard, Werner, Michael C. Jensen, Steve Zaffron. (2008). “Integrity: A Positive Model that
Incorporates the Normative Phenomena of Morality, Ethics and Legality”.
http://ssrn.com/abstract=920625
Kuhn, Thomas S. 2012. (originally published 1962). The Structure of Scientific Revolutions.
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Sadat, Anwar. 1978. Anwar el-Sadat: In Search of Identity an Autobiography. New York, NY: Harper
and Row, p. 303.

© Copyright 2008-2015 W. Erhard, M. Jensen. All rights reserved.

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