Article originally published by the Philadelphia Business Journal on December 13, 2021.
Tone at the top and organizational culture are two prime determinants of long-term success in any business. Tone at the top espoused by a leader reflects the ethical values of an organization. Culture reflects the climate within an organization – how the leader interacts with the organization’s staff and how staff members interact with each other.
On Nov. 29, Moshe Porat, the former dean of the Temple University Fox School of Business, was found guilty of conspiracy and wire fraud for his role in submitting erroneous data to U.S. News and World Report from 2014 through 2017, boosting the ranking of the Fox school’s online MBA program to number one in the nation. The improved stature of the school resulted in an increase in enrollment and donor support. Two Fox School employees had previously pleaded guilty for participating in the conspiracy and await sentencing.
News reports since the fraud became public in 2018 and the testimony of witnesses during Porat’s trial paint a troubling picture of Porat’s tone at the top and the culture within the Fox School organization.
A news release from the Department of Justice on Nov. 29 stated, “Porat boasted about these rankings in marketing materials directed at potential Fox students and donors. Enrollment in Fox’s OMBA (Online MBA) and PMBA (Part-Time MBA) programs grew dramatically in a few short years, which led to millions of dollars a year in increased tuition revenues. … Porat misrepresented information about Fox’s application and acceptance process, and therefore about the student-body itself, in order to defraud the rankings system, potential students, and donors.”
As reported in a Nov. 11 article in Poets and Quants, Christine Kiely, a vice dean at the Fox School, testified during Porat’s trial, “He was an intimidating man, and he managed through fear and intimidation. I think most people would say that.”
Kiely described sending Porat an email in which she wrote, “I am not comfortable with being associated with the [ranking] submission.” Kiely testified that Porat’s response was, “If this is the way you feel, maybe this isn’t the right place for you.”
Leaders who place importance on their tone at the top would never criticize an employee for stating that they are uncomfortable reporting erroneous data. Rather, they would thank the employee for pointing out the issue so it could be corrected.
Temple University commissioned the law firm of Jones Day to conduct an independent investigation of the rankings submitted to U.S. News. An excerpt of their report, issued in July 2018 stated:
(Excerpt is edited to improve readability)
Fox leadership and other employees bore responsibility for creating or promoting conditions that contributed to the reporting of inaccurate information to U.S. News and/or for the misreporting itself. Pressure to improve and maintain rankings contributed to the reporting of inaccurate information.
[Porat’s] focus on rankings, coupled with his personal management style, caused Fox personnel who interacted with the dean on ranking-related matters to feel pressure to perform in this regard.
In approximately mid-2013, at [Porat’s] initiative, Fox ceased use of a committee whose members had been meeting regularly to review, and collectively approve, draft responses to rankings surveys. [Subsequently], the controls that existed within Fox were inadequate to ensure the accuracy of information reported to U.S. News.
If something is mission-critical, it must be checked and double checked by individuals who understand the importance of getting it right. This is especially important if an error could severely impact the reputation of the organization and expose it to significant financial liability, as occurred at Temple.
Every business school is responsible for teaching future leaders the importance of ethics, integrity and the right tone at the top. It’s ironic that the Fox Business School rankings scandal could be a business school case study.
In an October 1998 speech to University of Florida MBA students, highly regarded investor and chairman of Berkshire Hathway, Warren Buffett, said, “In determining whether you succeed, there is more to it than intellect and energy. …There are three things in hiring people [that you] should look for: integrity, intelligence, and energy. If the person doesn’t have the first … the latter two will kill [you].
All leaders should remember Buffet’s comment and conduct ourselves with the highest levels of ethics and integrity. It should guide the tone we set at the top and the culture we nurture within our organizations, as well as the traits we look for in people we hire.
Stan Silverman is founder and CEO of Silverman Leadership and author of “Be Different! The Key to Business and Career Success.” He is also a speaker, advisor and widely read nationally syndicated columnist on leadership, entrepreneurship and corporate governance. He can be reached at Stan@SilvermanLeadership.com.