Building a Business: Don’t expect loyalty if you don’t give it

First installment in leader series explores how to build allegiance

(Editor’s Note: This is Part 1 of a 10- part series examining the building blocks of effective L.E.A.D.E.R.S.H.I.P. First up? L = Loyalty.)

"You've got to give loyalty down, if you want loyalty up." -- Donald T. Regan

Isn't there something almost magical about having a loyal friend? They know when we need help and even better, offer their help without our asking. They're committed to a lasting relationship with us and they inspire us with their loyalty. They don't judge us, they overlook our shortcomings, and they expect nothing in return. We have no trouble understanding that kind of loyalty.

But there are others we know as "fair weather friends,” good friends even. We enjoy their company, they're responsive when their help is sought, but they wouldn’t be our first choice to join us in a foxhole.

What is loyalty and how important is it to successful leadership? Some philosophers think loyalty is only a sentiment; others argue that it’s more of a test of conduct than an intensity of feeling. Some argue that it’s a virtue; some claim that disloyalty is a greater vice than loyalty is a virtue. Others argue that we must set aside good judgment to be loyal; I contend that while steadfast loyalty is a welcome quality, no individual or company should expect mindless fealty.

In a serendipitous moment compliments of a recent downsizing, I recently stumbled across an Industry Week article written by a college friend, Charles Day, who went on to become its editor. It was written in 1978 (I guess I can’t claim to be 39 anymore), and I kept it because he interviewed me, among others, for their cover story entitled Is Job Loyalty a Worthless Virtue. (My friend usually had higher standards for interviewees but was trying to help out his old friend, I guess.)

In that article, I commented on the mutuality of the loyalty contract between employer and employees. Others observers disagreed, insisting that performance was the only standard and loyal employees who didn’t perform should be summarily dismissed. Yet, it turns out that mutuality is a feature of most of our loyalties, particularly as it extends to the strongest form of loyalty … to “my” groups of families, friends, organizations, countries and religions.

True loyalty is measured by our conduct not by our feelings. Loyalty is the fuel of commitment and the bedrock of the diligence and hard work we expect from our employees. It should be calibrated by our commitment to remain loyal in the face of hardship even when it is costly or disadvantageous to us to be loyal.  We may be powerfully attracted to a concept, individual or group, but one’s loyalty must be tested by adversity or may be illusory.

For businesses, there’s tremendous loyalty associated with a common purpose. Such loyalty was the cornerstone of our own fight for liberty and equality some 235 years ago, creating a powerful bond of patriotism that inspired the vastly inferior forces of American revolutionaries. By way of a more current example, “No man left behind”, the Special Forces mantra, likewise underlies an unforgiving emotional bond that defines individual loyalty and commitment in a team environment.

We’re often torn by the hierarchy of loyalties that persist in our lives. We know, too, that loyalty can be a treacherous slope, as the Nuremberg trials following World War II demonstrated. Whistle-blowing is yet another example where loyalties are overcome by reckless, immoral or illegal behavior.

Work over family? God over country? Patriotism or anti-war protests? It turns out that loyalty is about values and the order in which we place them. Divided loyalties often represent our struggle over conflicting loyalties, and the shifting sands of our commitments as well as the commitment of others.

For leaders, a defined purpose offers tremendous power to inspire employee fidelity that transcends all obstacles. Often, you’ll see those purposes captured in vision and mission statements, and if done thoughtfully, they’ll ignite unrivaled enthusiasm and success. The Container Store is proud that it did not layoff a single person during the recession. While some benefits were deferred, their philosophy of “employees first” achieved a deeply rooted loyalty between the company and its employees. They “walked the walk” and received the allegiance of their employees by directly setting the example.

After all, that’s the root of loyalty programs that so many companies use to reward loyal shoppers with exclusive experiences, points programs and other benefits. Why not establish a loyalty program for your employees that rivals what’s offered to your customers?

In the end, you can’t expect loyalty if you don’t give it. By fostering reciprocal loyalty, business leaders bear witness to the transforming power that comes from a loyal work force inspired to reach higher and dig deeper. That kind of loyalty can’t be bought but it’s hard to build a great company without it.


Lary Kirchenbauer is the President of Exkalibur Advisors, providing practical business strategies for middle market businesses. Exkalibur works closely with senior executives and their businesses at the intersection of leadership, finance and business strategy. You can subscribe to his newsletter at the Exkalibur website at You’ll also find a library of valuable resources, including a new video and podcast library as well as articles and insights related to middle market businesses.

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