The Daily Recruiter

If you’ve followed the recent events involving Bernard Madoff, you know this tale is incredibly disheartening. As details of Madoff’s massive securities pyramid come to light, I’ve found myself wondering how could one person be responsible for what currently appears to be a $50 billion investment fraud? How could one man deceive so many famous investors including Director Steven Spielberg, GMAC CFO J. Ezra Merkin, DreamWorks Animation CEO Jeffrey Katzenberg (Wall Street Journal, 2008), and companies such as Banco Santander, one of Europe’s largest banks, and HSBC, Britain’s largest bank? What I find equally troubling is the fact that Madoff’s swindling would not have come to light had his son, Peter Madoff, not tipped off FBI investigators to his father’s actions (CNN.com, 2008).

While preliminary FBI investigations have verified that Bernard L. Madoff’s Investment Securities LLC have long been nothing more than a paper tiger (i.e., financially bankrupt), I’m curious at what point Madoff was morally bankrupt. How could one man perpetuate so massive a crime and yet give the appearance that everything is fine. Where is Madoff’s integrity (i.e., the truth in a person’s character and actions)?

Madoff’s story comes in stark contrast to Jack Welch’s track record at General Electric (GE). While initially rebuffed for his decisiveness, Welch’s unique blend of high standards (i.e., GE’s companies had to be 1 or 2 in their market or they were sold) and openness to innovative ideas catapulted GE’s market value to $400 billion. Most importantly, GE flourished because it reflected Welch’s character. While not liked by everyone, Welch prided himself on integrity (Welch & Byrne, 2001). Those who he worked with and accounts in his own books recount his unequivocal emphasis on honesty (Baum & Kling, 2004). Inevitably, Welch’s two decade tough-love approach translated into a stellar management tale.

So what can you take from Madoff and Welch’s stories? Take this: Integrity matters. You are only as good as your name. Ask yourself from time to time: Am I a person of integrity? Better yet, ask two or three co-workers who will be honest with you regarding this question. Then take action based on their response. Your career depends on it.