Two issues ago I wrote about human capital management, offering some practical tips on how to get the right people in the right place at the right time, doing the right things — and keeping them there. Those are tough issues, and the tasks required are often abstract and hard to get your arms around.

Good human resource management not only includes hiring, training, evaluating performance and getting people off the bus when needed, but also involves harder-to-define issues like culture, organizational behavior and organizational design. You often feel like you're trying to get to your destination pushing a wheelbarrow full of frogs.

In this issue we'll talk about the most important frog in the wheelbarrow. If this frog is not on board you could find yourself looking down a gun barrel.

That frog represents the character, integrity and ethical standards of your employees, partners, team members and suppliers.

ITS IMPORTANCE

The late management guru and author Peter Drucker once said, “Character and integrity by itself accomplish nothing, but its absence faults everything.”

How many times after a bad experience with someone or an organization could you attest to that? The best product in the world is no better than the people who deliver, service, repair or account for it.

Good character is important but how do we define it? And more importantly, how do we determine whether people have high character and integrity and high ethical standards?

DEFINING IT

Ethical standards are difficult to define. However, I've discovered they are communicated in two ways. First by observing those standards practiced and second by observing corrective action taken against those who don't. Both are the responsibility of the leader or owner of the business.

DETERMINING IF PEOPLE HAVE IT

Two ways I've found to determine if people possess a high degree of character, ethics and integrity are the following:

  1. Observe their behavior when they admit they're wrong. It will tell you much about their character. On the other side of the coin, some people can't admit they're wrong. In those cases, get them off the bus. Everyone is wrong about something, sometime and if someone is constantly blaming someone else, it tells you a lot about his or her character and integrity.

  2. Observe how people treat people they don't need. I recently observed a good example in action. Wayne Morgan, former head basketball coach at Iowa State University, started two seniors for their last Big 12 regular season home game — two players who normally weren't starters. The special way he treated them told me a lot about Morgan.

Evaluating Ethics

Evaluating character, integrity and ethical standards needs to be done every day as you build a team to help you reach your goals and get what you want. This not only includes the people you employ, but your customers, vendors, suppliers and dealers.

Recall, too, that these people are constantly evaluating you — your character, integrity and ethical standards.

Over the years I've noticed something about someone I do business with and have a lot of respect for. He is younger than I, started with nothing and is likely worth tens of millions of dollars. Whenever there is a disagreement over an obligation, in writing or not, he always does more than he legally would have to do. I think that has contributed to his success.

Lastly, and probably the best way I've found to evaluate people's character, is to observe them and place them in one of two categories. The first are those who love people and use things. The second are those who love things and use people. You decide which group you want to be around and keep in mind that you and your employees have choices.

Moe Russell is president of Russell Consulting Group, Panora, IA. Russell provides risk management advice to clients in 24 states. For more risk management tips, check his Web site (www.russellconsultinggroup.net) or call toll-free 877-333-6135.