Ethical Leadership: Baha’i Principles at Work

The Baha’i Faith promises humanity the re-creation of civilization, a new order of life on this planet, in which spiritual principles will permeate every aspect of our lives and will animate the revitalization of all institutions from the family to those of global governance.

Baha’is believe that the institutions of business as well as organizations of government and education will all gradually be guided by new principles and methods in harmony with the animating spirit of this new civilization. In this series of articles I would like to share some thoughts on how we might begin building those spiritual enterprises.

For most of humanity’s life on this planet we organized institutions of governance according to the assumption of vertical authority. The subjects obeyed the King, and sought guidance from the Priest. In this “childhood” phase of civilization, authority flowed from the top down, and we obeyed. Then, like the teenager, we declared our independence and began to abandon authoritarian governance. In this stage of independence, characterized by “doing my own thing,” we entered an historically-unprecedented period of seeking individual pleasure, self-determination and autonomy.

True maturity means something different, however. Maturation asks us to enter a period of inter-dependence, in which self-interest gives way to shared interest and collaboration becomes more important than individual control. From a Baha’i point of view, humankind is now entering this stage of maturity—which can only be attained if we agree on shared principles and a shared vision of the future.

The First Principle: Honesty, the Foundation of All Virtues

Honesty and trustworthiness underpin all virtue—and all economic activity, as well. No more self-evident, yet intricately complicated, principle exists. The business environment can serve as a great test to this capacity for the individual soul. The merchant constantly communicates a perception of value—the worth of his merchandise, the history of the car, the condition and history of a house, the potential development of a piece of land, or the likely appreciation of a stock. This communication often occurs between an expert and an amateur—between one who stands to gain and one who stands to lose. Dishonesty often seems very easy, and often in one’s apparent self-interest. To overcome the temptations of dishonesty, the merchant must detach from short-term self-interest, and focus on the lasting value of long-term relationships. The Baha’i teachings unequivocally uphold this principle:

Beautify your tongues, O people, with truthfulness, and adorn your souls with the ornament of honesty. Beware, O people, that ye deal not treacherously with any one. Be ye the trustees of God amongst His creatures, and the emblems of His generosity amidst His people. They that follow their lusts and corrupt inclinations have erred and dissipated their efforts. They, indeed, are of the lost. – Baha’u’llah, Gleanings from the Writings of Baha’u’llah, p. 297.

In today’s business environment, essential long-term customer and supplier relationships build and sustain themselves on trust. In the past, for the merchant trading in the bazaar of the Middle East—skilled at winning by getting the customer to pay as much as possible—the negotiation between customer and supplier represented a game played with cultural rules that allowed for a level of dishonesty by both parties.

But in today’s environment merchants like Wal-Mart, L.L. Bean, Home Depot and thousands of others guarantee customer satisfaction. You can return the item, no questions asked. A simple Internet search will reveal the medical success rate of hospitals, pharmaceuticals, vitamins, the performance of cars, the customer satisfaction ratings of hotels and airlines. Completely unlike the bazaars of the Middle East where the importance of the immediate “deal” trumped any concern about long term trust or reputation, the reverse has now become increasingly true. Few merchants can hide from the trust they either generate or destroy. This brand equity—which actually measures the trust the public extends to any particular brand—now supplies the most essential capital of any company.

One such example, the Toyota Production System, or what has become known as lean manufacturing, builds on the creation of long term and intricately close relationships throughout the supply chain. In this world-class manufacturing model, suppliers invest huge sums to build manufacturing plants next to their customer’s plant to provide a consistent, just-in-time flow of incoming materials and components. They also share engineering resources, invest time in co-development of component parts, and work as one close family. No legal agreement alone can adequately assure the close communications and relationships required to make this process work—instead, the relationship between supply chain customers and suppliers has evolved into a long term marriage sustainable only by trust.

A recent book by Francis Fukuyama, called Trust: The Social Virtues & The Creation of Prosperity, presents a well thought out argument that:

…one of the most important lessons we can learn from an examination of economic life is that a nation’s well-being, as well as its ability to compete, is conditioned by a single, pervasive cultural characteristic: the level of trust inherent in the society. – p. 7.

Fukuyama presents a detailed argument for individual virtues—the bedrock of social relationships—or the tendency toward fluent association, what he calls spontaneous sociability:

Spontaneous sociability is critical to economic life because virtually all economic activity is carried out by groups rather than individuals. Before wealth can be created, human beings have to learn to work together, and if there is to be subsequent progress, new forms of organization have to be developed. – Ibid., p. 47.