Nice guys! Time to finish first.

The headline from last Monday’s HBR Daily Stat offered a grim assessment: “Male Professionals with Higher Ethical Standards Earn Less.”  According to research by Andrew Hussey of the University of Memphis, “Male business professionals who self-report high ethical character earn, on average, 3.4% less than their peers who don’t report having such standards.” Women suffer no such penalty.  Furthermore, men who report that their MBA education raised their ethical standards earn 6.5% lower wages than men who do not so report.  By contrast, women who report that their MBA program raised their ethical standards earned an average of 5.5% more than those who did not so report.

What to make of this?

I’m not going to make the broader case for moral motivation.  If you care only about commercial outcomes, then ELA is not likely to be of service to you.  If you do chose to lead a work life that is both successful and honorable, however, then we have much to discuss, and this research should be of interest to you, as it is to me.

We might be tempted to see this finding as just another example of “nice guys finishing last.”  That would be a mistake.  If we take the research at face value, then men who see themselves as having high ethical standards, and especially those who feel that their business education bolstered those standards, are earning somewhat less than those who don’t feel that way.   This doesn’t mean that moral apathy pays.  It means that those who are morally motivated ought to develop the capabilities to monetize that motivation.   Being a “nice guy” – or, “an intentionally good person” – represents an investment, and recognizing its return requires both will and skills.

Understood in this way, the research reveals a tremendous opportunity: many morally motivated leaders can learn to turn those good intentions into better business performance.  Moral motivation can be monetized primarily by building trust-based relationships, and by igniting engagement in employees and other stakeholders.  Trust creates efficiencies, starting with reduced contracting and compliance costs.  It also creates an environment for innovation and creativity, supported by sensible, shared risk-taking and open discussion of mutual opportunities and needs.  When we trust one another, we seek to do better, together.  Engagement, likewise, represents the difference between employees who comply with orders, and those who cooperate in pursuit of shared goals.  The difference, like its payoff, should be obvious.

Consider the following as starting points:

• Invest in trust-based relationships with customers and vendors.  Establish clear, reasonable ground rules for all.  Then seek specific opportunities to turn arms-length, transactional relationships into shared-destiny, strategic partnerships.   Understand the needs of your trading partners, and look for the synergies, along with innovation opportunities.
• Pay particular attention to employees, creating environments that promote cooperation rather than mere compliance.  Driving engagement isn’t magic, but with the right efforts, it can work like magic, especially where customer service, productivity and innovation are concerned.  Supervisors can start to reap these benefits by establishing clear performance expectations, and by showing that they genuinely care, for all team members.
• Don’t forget the “blocking and tackling” of leadership: sound communication techniques such as active listening, giving direction that focuses on intent and outcomes rather than tasks, and constructive feedback that demonstrates concern.

In this light, the gender difference revealed by the research is especially interesting.  Perhaps, on average, women who believe that their ethical sensibilities are honed through education are better than others – and better than men – at building trust-based relationships.   Maybe they are more adept at stimulating and engaging teammates.

What do you think?

(Thank you, Ben Metzler, for bringing this Daily Stat to my attention!)