By Wes Ball. Wes is a strategic innovation consultant and author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success (Westlyn Publishing, 2008) and writes for Leadership Turn every Tuesday. See all his posts here. Wes can be reached at www.ballgroup.com.Diana Ross’s old hit song saying that the world just needs “love” may not be the answer, but there is indeed a universal need out there that would help us overcome our current economic dilemma.  What the world really needs now is a little honest leadership.  And I mean that literally.

The “con games” that have been played upon investors (and the American public) in this current financial debacle are just the latest in thousands of years of dishonest dealing in order to gain something.  In the mortgage fiasco, the potential losses from giving mortgages to high-risk individuals was supposedly “spread around” by selling them as part of larger packages of mortgages to unsuspecting investors.  The idea was to pass along the risk to others (in other words: be able to put the blame and consequences on someone else).  But the dishonesty of this caught up to everyone involved, including both the innocent and the guilty.

One of the things I learned in researching for my book, The Alpha Factor, was that Alpha companies don’t have to market themselves with such dishonesty.  That’s not to say that they don’t have selfish humans working in the company who make bad and occasionally dishonest decisions, but their sales are not based upon such dishonesty.  Their longevity and sustainability is only possible because of the honesty of what they offer and provide.

Leadership by its definition requires honesty.  Without honesty a leader cannot last long, because the trust that will sustain him will evaporate as soon as the lies are discovered.  Without honesty, the foundation of the organization being led will be compromised and everything built upon it will be vulnerable.  A few may be able to maintain their leadership for some time through sheer effort, but that effort must increase over time to overcome the increasing resistance that will naturally occur due to the false foundation upon which it is built.  Much like an aircraft where air resistance increases at the square of speed (which is the limitation to top speed), an organization built upon faulty, dishonest leadership must work geometrically harder to maintain itself when built upon dishonest foundations.

Here are five simple tests that we all learned in grade school, but that have largely been forgotten:

1. If it’s too good to be true, then it probably is.  (This is probably the oldest one, but how often have we all slipped on that, believing that the “easy” way we believe so many people make money is true and possible for us?)
2. If it contradicts what mom said, it is probably a lie.  (Now I know there are many untrustworthy moms out there, but I got into far more trouble by not believing my mom than I ever did by trusting her.)
3. Everything will cost you something.  (Nothing comes without cost — especially, when we are told that someone else will have the burden of all the cost or risk, and we will only get the gain.)
4. If it’s a “favor,” it probably isn’t.  (The person who offers “favors” usually has more to gain than you do; you just can’t see it until it is too late.)
5. Two faces are one too many.  (If the person making the offer has a history of contradicting himself or of doing things that don’t match with his words, then don’t believe him – no matter how sincere he sounds).

I’ve been around long enough to have been caught in far too many crazy schemes for me to admit.  But in each case, when I looked back at it, the warning signs were there.  If I had used the five tests above, I would have said “no.”  Instead, I wanted to believe that perhaps I had been wrong in how I thought things worked.  Perhaps I could actually get that thing that seemed too good to be true, that contradicted what my mom had told me, that had no cost to me and only gain, that was being offered by someone who was doing me a big “favor” or who had suddenly changed the way he operates.  I never won any of those.

As the CEO of a company, there have been many times I was tempted to “push the truth,” but I was lucky enough to learn that every time I did, I paid a terrible price.  I always saw that honest leadership led to far greater gains than any shortcuts I momentarily thought might get me there quicker.  I also learned that the people I led were far more willing to give their respect and loyalty to me when we were being honest, no matter what the short-term consequences were of that choice.

As long as humans are on this planet, there will be a need for leadership.  But the secret to leadership is that it can only exist with the consent of those being led.  If we refuse to accept dishonest leadership, then it cannot be leadership. But, if we choose to believe that we can gain something that contradicts those five tests, we deserve everything we lose.

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