In today’s episode of the Referral Secrets (4/20/2021) Curtis interviews Rob Chesnut, Chief Ethics Officer at Airbnb, and author the book Intentional Integrity.
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Thank you so much for joining us and sharing your wisdom around this topic. So do you mind sharing the science of integrity to start?
Sure. You know, it’s interesting. When I started writing the book, I didn’t know much about the science behind this, but there are people who study this. There’s a guy at Duke University by the name of Dan Arielli, who I went and spent some time with.
Before I met Dan, I was a federal prosecutor. I thought that there were good people and bad people, right? There were people who had integrity and people who didn’t have integrity, and all you gotta do is figure out who’s got integrity, and those are the people you want to hire and deal with. Dan told me that it’s a lot more complicated than that. I think all of us face integrity challenges every day.
That really resonated with me. We all face integrity issues, and I think we’re all tempted to resolve them in a way that’s favorable to us, right? We all want to come up with an answer that works well for us. The key is, can we come up with that answer and still feel good about ourselves? A lot of times what ends up happening is, we rationalize our behavior. Because, you know, Curtis, we all want to feel good about ourselves.
That’s why I think companies with a lot of creative people actually have more challenges with integrity, because creative people are really good at coming up with rationalizations for behaviors. The science behind integrity is we are deeply influenced by our own desire to feel good about ourselves. We’re also really influenced by our immediate surroundings.
So what do I mean by that? If we see our boss, for example, not acting with integrity, doing things that we know are wrong, it becomes much easier for us to do it too. But if we are in an environment where others are acting with integrity, and doing the right thing is encouraged, then that feeds the integrity inside of us. We can’t therefore act in a dishonest way and still feel good about ourselves because everyone around us values integrity. So integrity is influenced quite a bit by our surroundings. Integrity is contagious, but so is a lack of integrity.
So tell us some more about Intentional Integrity, a term that I believe that you coined.
Intentional Integrity – How Smart Companies Can Lead an Ethical Revolution
Intentional Integrity is the idea that, if you want integrity, you need to be intentional about it; and so many companies aren’t. So most companies look at integrity as a code of ethics they get from their law department, right? Or worse; they went online and copied somebody else’s code of ethics. Then they put their own logo at the top and email it out to everybody and say, check this box saying that you’ve read it. What’s the irony of stealing a code of ethics from somebody else? Truth is, it doesn’t really impact the work culture, because everybody knows that you’re just literally checking a box, covering yourself and taking care of a legal requirement for the lawyers.
And, you see compliance posters in the break room, right? You know what I’m talking about? It’s off in the dark corner by the pipes that are dripping. And the font on these things is tiny. It’s three or four point font. It’s got everything you need to know about following the law. Problem is, no one reads those posters.
Then there’s the sexual harassment video, another great example, right? The email goes out, everybody’s got to watch this video. It’s required by law. It’s created by some third party and everybody just clicks through it.
If you want to make an impact on a company’s culture and you want to drive integrity into a culture, these things don’t work. Bottom line, Curtis, you can’t outsource integrity. Integrity has to be a fundamental job requirement of the leader(s) in a company. That means you’ve actually got to talk about it. You’ve actually got to talk about doing the right thing, but more importantly, you’ve got to demonstrate it with your own behavior. You can’t depend on a third party poster, or a silly video.
You’ve got to step up and own it, because integrity is contagious. Too often, though, courtesy becomes integrity. It’s the topic nobody talks about, it’s uncomfortable, right? I think some leaders are afraid to talk about it because others will say, “Hey you, what are you talking about?” None of us are perfect, but integrity isn’t perfection. If it was, then no one would have integrity. Integrity is about intentionally committing to a journey. It’s doing the right thing, right? It’s about talking to others about that journey. It’s about having the self-awareness to realize that you may get off track. You’ve got to candidly face it, admit that you got off track and made a mistake, and get back to the right behavior again, because you know it is the right thing to do. Without intentionality, though, it’s a very difficult path. It becomes silence, and silence and ambiguity are the enemies of integrity. When no one talks about integrity, everyone’s free to interpret for themselves what integrity means. That’s when you get the rationalizations and the problems.
It’s the company that’s growing and wants to attract customers, the company everybody wants to be, and people want to be a part of. Obviously one or two little slip-ups can really damage a company. What are some of the things that you’ve seen? Do you mind sharing what things they created to be able to come out on the other end, you know, a better organization?
Well, you know, everybody’s got integrity challenges, and the more successful you are as a company, the more the world gets out it’s microscope and starts examining your behavior. I remember the very early internet days. I was an employee at eBay. Everybody loved the internet, right? Everybody thought the internet companies were the darlings of the world. They were going to save the world.
Well, after a while, people got tired of writing nice things and they start looking at it more critically. Now the knives are out. Tech companies are the root of all evil and they are being constantly scrutinized; in many cases, by the way, rightly so.
When I was at Airbnb as their general counsel, things started popping up online about discrimination, about hosts that were discriminating and not accepting guests because of the color of their skin. There was a hashtag Airbnb wall; it was painful for the company. I trot off to be the good lawyer and do my research on the law around it. Right? Can an Airbnb host refuse a guest they don’t want in their home? Does the law cover Airbnb hosts?
So I got my materials together and met with Brian Chesky, who’s the founder and CEO of Airbnb. I started going through the law with him, and Brian holds up his hand and says, “Stop. I don’t care”. I said, “What do you mean you don’t care?” And he said, “Rob, Airbnb’s mission is to connect people as human beings, to help people get out from behind computers, to go places, and get to know others in a human way”. He said, “We’re about belonging. And if this sort of thing is happening on our platform, we’re failing as a company, we’re simply failing”.
He said, “So I don’t really care what the law is because regardless of what the law says, we’re going to fix it. We’re going to take this on. I don’t care what it costs, because ultimately our mission is what matters and we’re failing in our mission”.
So the company embarked on a journey to change the way consumers interacted with the site, to reduce, or as best we could, eliminate, discrimination on the platform. We required everyone who came to the site to agree, right up front, that they would treat everyone with respect and accept all, regardless of skin color, religion, nationality, or the like. This still isn’t the law in a lot of places where Airbnb does business, but everyone around the globe who came to Airbnb had to accept this pledge.
If you didn’t accept this pledge, you could not use the platform anymore. Airbnb lost a little over 1% of its users because of this. But, Brian said, “I don’t care because, you know, ultimately we have to make decisions based upon our mission”. The civil rights groups partnered with us, governments partnered with us, and I think we are on the right side of history and doing the right thing. That was a valuable lesson for us. The world wants you to act with integrity. The world wants you to step up and do more than just the bare minimum. I think that has served Airbnb well and will continue to serve the company.
What are a few things that leaders can do to start driving more intentional integrity within the organization?
You know, like it or not, as a leader, you’re a role model and everybody’s watching you. For example, a CEO who stomps around and says, “We’ve got to hit this number no matter what, I don’t care what it takes to get it done; don’t come back to me until you figured out a way to do this”. That’s how companies like Volkswagen and Boeing got off course, right? They got directives from leaders to hit a deadline, hit a number, no matter what. The problem is when you say those sorts of things as a leader, people hear that you are to do whatever it takes, even if you cut ethical corners.
Let me contrast that with a story Ben Horowitz told me. Ben Horowitz, when he was a CEO, would sit down quarterly with his CFO personnel and look at numbers. He would always look the CFO in the eye. This was part of his ritual. And he would say, “Is there anything in these numbers that makes you uncomfortable? Is there anything in here that could mislead people? Is there anything in here that you felt pressured to do?” Then he would say, “We might miss a number, a stock might go down. I might even lose my job, but I’m not going to go to jail”. Right? You can’t ever send a message as a leader that there’s something more important than doing the right thing. As a leader, what you’ve got to be willing to talk about integrity.
You’ve got to stand up in front of the company and talk about your company’s mission. What’s the north star? Why is the company good for the world? You’ve got to make decisions consistent with that. Profit is not the north star, right? Profit is a by-product of running a good business. It’s a necessary product of running a business, but it can’t be the fundamental basis for your decisions. That has to be your North star. When you talk about that north star, you will inspire both your employees and your customers. When you make decisions consistent with that north star, that will actually inspire and drive your company forward.
You can’t ignore it, you can’t remain silent because integrity is part of your job description. As a leader, you are the thermostat for integrity. Not the thermometer, right? A thermometer just takes the temperature of the room; a thermostat sets it. By your words, and your actions, you are setting that ethical thermostat. You’re creating an environment, a temperature where everyone in the company lives and works. That’s on you. You have to own that.
So, with the media and everything that’s going on, seems like every week, like Boeing, and Facebook; things are under the microscope. I mean, it’s crazy. Is it the pressure, like with hitting numbers; what is going on?
You know, a number of years ago, there was a guy by the name of Milton Friedman. Milton Friedman, along with a professor, came up with this notion, that companies aren’t there to exist. They operate to drive shareholder value and that’s all that matters.
That became almost an ethical mandate as a leader. You are only to be thinking about one thing: driving up shareholder value. What does that mean? That means the stock price goes up. Right? What a coincidence! And who actually holds a lot of stock? The leaders!
So what Milton Friedman did was create an ethical justification or rationalization for selfish behavior. Drive the stock price up, make yourself rich and hey, everything’s good. That’s actually your moral imperative to do it. And if you’ve got to cut some ethical corners, if you’ve got to put some carbon into the air or pollute a stream, or you’ve got to close your eyes to the working conditions of your supplier on the other side of the world, that’s not any of your responsibility, your moral duty is to shareholders.
Things like climate change, and other matters got people thinking, Hey, wait a minute. Why shareholders? Why shareholders? Certainly shareholders are important and should matter, but aren’t there other important stakeholders that should be considered? The world started asking these questions, especially as we became more connected globally, and complete visibility was possible into the inner workings of companies.
I think all of us, Curtis, want to do good. When we go to work in the morning, we want to feel that we’re doing something that’s positive and having a positive impact. I think a lot of people started looking at this and saying, “I don’t feel good about what’s going on in my workplace”. In the old days, they couldn’t do anything about it. We had three news stations on television. Now everybody’s their own news station. Everybody’s got a blog, everybody’s a newsperson. Employees don’t sit on their hands anymore. They talk to each other on social media. They blog, they tweet. If they don’t like something, they walk out. They’re demanding something deeper than just this idea of shareholder value.
This is something now accepted, at least in principle, by businesses; the rejection of shareholder value and the adoption of something called stakeholder principles. In other words, companies have multiple stakeholders and need to make decisions by taking all of their stakeholders into account. Let’s take Airbnb. Airbnb of course has its shareholders, but it also has its employees, guests, and hosts. Airbnb recognizes the communities where it operates. Leadership’s more complicated than in the old days. All you had to do was just drive up that stock price and cash the checks. Well, now you gotta be profitable, but you’ve also got to be thinking about all your stakeholders. The world really got tired of the selfish behavior of companies and the way that the selfish behavior was negatively impacting everyone.
What are some things that you have seen within an organization that have blown up, like maybe a romantic relationship? Like you said before, addressing this stuff head on is super important from the leader.
There are a number of things you can almost predict companies will ask. “Rob, I want to adapt. I want to be intentional”. The first thing we should do is figure out where the most likely problems will be. Take romantic relationships, right? How many times have you seen a headline where a CEO or leader at a company has had their career derailed by unethical behavior? Or an employee, a junior person at a company has gone through hell over a romantic relationship with a senior person? So let’s talk about intentionality. How do you prevent that kind of a problem?
Well, the wrong way is the way the companies have been doing it for a long time. They might say something like, “Don’t engage in inappropriate relationships”. Well, what does that mean? Right? That’s exactly the kind of ambiguity that creates ethical issues, right? Don’t engage in non-consensual relationships. Well, what’s a non-consensual relationship? If you’re a CEO and you propose something romantic to a junior person, that junior person may feel compelled to go along. What they’re going to think–because I’ve talked to these people– they think, what happens if I say no? Right? So it affects their career. So is it really consensual? We’ve got to get away from that vague language.
So what I did at Airbnb, I walked into an executive team meeting and there were about a dozen of us that ran the company there. I began talking about romantic relationships involving senior leaders, and I pointed to examples of how it really derailed companies.
I proposed that the group of us, the 12 of us, should agree that we would not engage in any romantic encounter of any kind with any employee, supplier or vendor, even if “consensual”. We should all agree to simply forego it, because it would cause nothing but problems, and it really can’t be consensual. There was silence in the room for a minute. Then one person said, “Oh, Rob, we’re all married or in relationships anyway, so it really shouldn’t matter”. And I said, “Well, you’re right. It shouldn’t matter. But based on what I’m reading online, being married doesn’t stop anybody. So let’s talk about it”. And we did. We went around the room, looked each other in the eye and each person said “I’m in”.
So now we could go to the company and establish our code of ethics; executive team members will not engage in any romantic relationship of any kind with any employee, consensual or not. That’s it.
Now, I don’t think we broke a lot of hearts in the company, to be honest with you. But we sent a message that we are going to put the company’s interest and mission first, and we’re not going to put anybody in an uncomfortable position in the workplace because our employees really matter. Now if anything like that were to happen with a senior leader at Airbnb, it will be quite easy to resolve, because not only have you broken a rule, but you broke your pledge to everyone else in the room. Because we went about it with such intentionality and we talked about it, we weren’t ambiguous and the rules and code were clear.
Don’t let it be the elephant in the room, talk about it, talk about it often and bring things up, have your team be involved with the conversation.
Sure. Because you can’t make a rule like that unless the senior leaders agree to follow it. I would talk to the senior leaders from time to time, just as a little reminder, so that no one would forget about our responsibilities and what we agreed upon. That’s intentionality and that’s how you avoid problems.
So with the pandemic going on right now, you updated some parts of your book. Do you mind sharing some of the intentional integrity in light of COVID-19 and the pandemic?
I think the pandemic poses special challenges, simply because there’s so much courtesy, you know, people are worried about losing their jobs. They’re dealing with relatives that may be sick and far away, or the loss of family members and friends. In an environment like this, leaders need to start by recognizing the fear and giving straight talk. Let me give an example of straight talk. When the pandemic first hit, business had been going great. Then it tanked. The CEO, Brian Chesky, wanted to address the employees. A lot of executives in this circumstance would be tempted to say things like, “don’t worry, we’re all in this together. It’s going to be fine”.
What if it’s not fine, right? If you’ve got to do a layoff, you really weren’t “all in it together”, were you? People want it straight, what’s going on? So Brian came and said, “here’s what’s happening to the business. Obviously we can’t continue to operate with thousands and thousands of employees around the world and no revenue. We may need to take some steps, and I don’t know what all the steps are going to be yet, but we’re discussing it actively. I’m going to let you know, as soon as we figure out what the right thing to do is”. Brian started by all executives taking a substantial pay cut, because as a leader, you can’t expect others to sacrifice if you’re not willing to sacrifice first.
I’m very critical of companies, where leaders lay off thousands and thousands of people, and then continue to cash full paychecks and take bonuses. I think that’s wrong. You’ve got to lead by sacrificing first, and you have to lead with straight talk, not happy talk. You have to communicate on a regular basis. There’s a lot of fear, and the best way to address fears is with good, straight, honest communication about exactly what’s going on. I think you also need to demonstrate empathy. Airbnb did have to lay people off, but even the way you lay people off matters.
Airbnb was generous with its severance. It provided health benefits for a year, which was critical in the pandemic. Another thing that the company did, was allow employees to keep their computers. Why would we need to get their computers back? We can, from a security perspective, wipe off our information remotely, and in a pandemic, employees may need a computer at home. They may have no computer themselves, or they may only have one computer that’s needed by a child who’s doing remote school.
So little acts like that, I think send a message that we care about people as human beings. As leaders, you’ve gotta be thinking, again, not just about your shareholders. You need to be thinking about all of your stakeholders and what you can do for them. My mom used to tell me, “tough times really reveal character”. How you treat people, how you treat your stakeholders is something that will be long remembered after the pandemic is over.
Wow, that’s powerful stuff. And you have a process around culture and integrity. Do you mind sharing that?
I wrote the book basically to share what I had learned at Airbnb and eBay and from a number of other leaders, former Attorney General Eric Holder, Reid Hoffman, and the like. You need a roadmap, a code of ethics. Not just something that you stole online, but one that you create yourself, a custom code of ethics. I talk in the book about how you put together a diverse team of people to help create one, in your own companies words, and language. One that reflects the values of people. Everybody looks at ethics a little differently. We’ve got our own background, our own culture, our own life experiences.
One common mistake is what I call the Moses Effect, when one person goes off to the mountaintop, creates the code of ethics, then comes back down and says, “here it is, here are the new rules, everybody”. You need to get broad buy-in and input. So, creating that custom code of ethics is a critical first step. You’ve got to communicate. A lot of companies take their code of ethics and they send it out and tell people to check a box in an email. That doesn’t send much of a message.
So what we did at Airbnb was all employees had to go through orientation. We actually talked about the code of ethics in a separate session as part of orientation. You know, when I first went to the orientation team and told them that I wanted to do this, they said, “Oh, Rob, come on. You want to talk about ethics for an hour, with new employees, we’ll drive them away”. I said, “I think we can do this in a way that will engage people. I’ll teach it myself live, and in-person, no video, no third-party consultant, no mid-level HR person”. And they said, “wow, you’re going to do that as the general counsel?” I said, “Yeah, I’d rather spend an hour every week preventing a problem, than dealing with a huge problem down the line”.
What a reception I got! Wow. We talked specifically about ethical problems that employees had faced at Airbnb, everything from romantic relationships, access to alcohol, gifts from vendors. People love to learn from stories. We talked about practical stories for an hour, and people came up to me afterwards and said, “Rob, I’ve never worked at a company where they actually talked about this stuff. You have no idea what it means to have a company leader come in and actually talk about integrity”. It made a powerful impact.
And it must’ve been easier for you to do it, knowing where Brian’s heart is and where his mind is on the organization.
It would do no good for me to go in and talk about integrity if the other top leaders in the company weren’t bought in, because then they’d looked like hypocrites, right? So you’ve got to have that buy-in from all the leaders as part of creating that custom code.
Another thing you’ve got to do is create a way where people can report violations, because people don’t want to be a whistleblower, right? Nobody wants to go to legal. You’ve got to make people feel welcome to talk about problems. It has to be okay to raise your hand and say, “Hey, I see something over here that doesn’t look quite right”. You’ve got to really put out the welcome mat for it and be willing to have the conversation.
I’ll give you a small example of a way a leader could put out the welcome mat and create an environment where people feel comfortable talking about problems. At Airbnb, we had open desking, which means I had a standing desk in a room where there were dozens of people. I’m standing at my desk one day, and somebody comes up to me, and introduces himself. He’s a mid-level IT manager. He said, “I couldn’t help but notice when you left your desk a minute ago, you didn’t log off your computer. You didn’t close off your screen.
So basically he kinda caught me on a security violation. Now I think most people would get defensive, right? Like, “Oh, come on. I just went to the restroom… I was gone for less than five minutes…. There was nothing confidential on the screen… come on, give me a break”. But I didn’t say that. My next thought was how great it was that a mid-level manager would feel comfortable walking up to an executive team member and raising an issue like this. Right?
People knowing it’s okay to say “I see something that’s not right”.
So, you know what? I looked at him and I said, “You’re absolutely right. I screwed up. By the way, as the general counsel, I ought to be the one setting the example here. I really appreciate you bringing this to my attention. That took a lot of courage. Thank you”. And then what we did, we have a little award that we gave out at Airbnb. We called it the “IntegrityYeti”, you know, those really great Yeti water bottles, right? We put the Airbnb logo on it with our integrity slogan, and we would give it to somebody who had the courage to raise a question or make a good point related to integrity. So at the next big company gathering, I stood up and I told the story of my security violation. I asked the young man who had come up to me to stand up and I gave him an “IntegrityYeti” in front of a large group of people. Everybody gave him a huge round of applause. He wrote me an email a few months later, and told me that that was the most rewarding moment he had in his entire six year career at Airbnb. Just a $30 water bottle. Wow. It’s powerful. Leaders need to recognize and reward behavior like that, as opposed to brushing it off, right. That’s where things get buried and that’s where the fear comes.
That’s one of the things we talk about in ReferralsSecrets; behavior rewarded is behavior repeated, right? So you’re rewarding that behavior in front of everybody, like you’re telling the story about yourself.
A $30 water bottle. And I was able to drive a point home to a large audience of people. That’s what you’re looking for. Right? You’re looking for ways to reinforce that behavior. Those are some examples of things that you can do to drive this forward in a workplace.
Now we’re getting up on 45 minutes here and I’m going to wrap up in just a minute. Before we do, do you have any kind of parting wisdom for leaders of organizations, small or big? We covered a lot here and you touched on a lot of different things.
I’ll leave you with this. When I was growing up, I heard that business was a dog-eat-dog world, with no time for nice guys, you know? The data actually shows something different, Curtis. It shows that companies that act with integrity, actually outperform their competitors and outperform the stock market. What’s really interesting is companies that think about doing the right thing, engage employees, and attract employees, also attract customers. We are in an age of conscious consumerism. Consumers want to do business with companies that they feel are trying to do the right thing and have values similar to their own. So, for those people that are thinking that, I’m here, I’ve got to make money, that’s my primary goal. My response is yes. And integrity. Integrity is something that can actually be wind at your back. It can actually drive your business. And of course it can prevent a catastrophic problem. So I think focusing on integrity is something that needs to be a fundamental part of your playbook.
And people can find your book on Amazon.
They can find it everywhere. Bookstores everywhere, including Amazon, Walmart. I love local bookstores. You can also find more information at wwwdotintentionalintegrity.com, or reach out to me on LinkedIn. I usually post about integrity, almost every day on LinkedIn and would welcome you reaching out to me.
And you do consulting with other companies as well.
I do. I work with companies that genuinely want to drive integrity to their culture.
Awesome. Well, thank you so much for being our guest. So much wisdom here. Thank you so much for taking the time to be here with us. Thank you.
Links:
https://www.linkedin.com/in/robchesnut/
https://www.intentionalintegrity.com/
About Rob Chesnut:
Rob Chesnut was most recently the Chief Ethics Officer of Airbnb, Inc., a role he took on in late 2019 after almost four years as Airbnb’s General Counsel. He previously led eBay’s North America legal team, where he founded the Internet’s first e-commerce person to person platform Trust and Safety team. He was the general counsel at Chegg, Inc. for nearly 6 years, and he served 14 years with the U.S. Justice Department, where he prosecuted CIA employee Aldrich Ames for espionage. He is the author of Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution (St Martin’s Press, 2020).