Memo to: CEOs

Nothing reveals the corruption of leadership more clearly than the record of executive compensation. According to one recent survey of executive compensation during the 1990s, your pay rose by 570%. Profits rose by 114%. Average worker pay rose 37%, barely ahead of inflation, which went up by 32%. In 1999, while median shareholders' returns fell by 3.9%, CEO direct compensation rose another 10.8%. Perhaps the real reason that we are so obsessed with leadership today is that we see so little of it from CEOs.

4. Companies need to be lean and mean. "Lean and mean" is back in fashion these days.It's a mantra for getting in shape after the recession, just in time for the recovery. "Lean" certainly sounds good -- better than "fat." But the fact that "mean" sounds good is a sad sign of the times.

There is nothing clever about firing large numbers of people. CEOs who have pursued slash-and-burn tactics -- the fastest way to create shareholder value! -- have produced companies that are skinny and just plain mean. "Chainsaw" Al Dunlap, the master of slash and burn (who eventually slashed-and-burned himself), wasn't an aberration; he was an extreme example of a popular trend. In 2000, before the recession even hit, employers cut 1.2 million workers, ending the year with the highest number of layoffs since the Bureau of Labor Statistics resumed calculating them in 1995.

Of course, lean and mean offers the same half-promises as the other half-truths: Embrace it, and you'll get lower costs, higher productivity, flatter structures, empowered workers, and delighted customers! You'll get -- in those glib phrases of the day -- "more for less" and a "win win" situation.

Well, maybe. Or maybe you'll get burned-out managers, angry workers, quality losses under the guise of productivity gains, and bad service that alienates customers. In other words, you'll get "less for less" and a "lose lose" situation.

But the biggest loss of all may be the sense of betrayal that workers have come to feel toward their employers. One recent study reported that only 34% of employees worldwide felt a strong sense of loyalty to their employers. In the United States, only 47% of employees saw the leaders of their companies as people of high personal integrity. And that was before Enron, Andersen, or Global Crossing. In other words, that was before some of your fellow CEOs gave their workers more evidence that they were right to be distrustful.

5. A rising tide lifts all boats. This last half-truth helps knit together the first four. In order for the focus on personal gain, shareholder value, heroic management, and lean and increasingly mean organizations to work, we must find a way to rationalize what otherwise looks like self-serving behavior. The solution: "A rising tide lifts all boats" fits.

It's hard to argue against prosperity. And we'd all rather see the economy flowing rather than ebbing. But even as a metaphor, the idea that a rising tide lifts all boats doesn't hold water. What we've really been observing is a tidal wave. If you've ever lived along a coastline, then you know that a tidal wave lifts only those boats that aren't moored to anything. The boats that are connected to real things get swamped. For those who live on land, a tidal wave can turn into a flood. The ordinary folks who live in the lowlands get flooded out, while the wealthy few who live in high places escape. So much for the "win win" benefits.

But what about the facts of business and economics? In 1989, there were 66 billionaires and 31.5 million people in the United States living below the official poverty line. In 1999, the number of billionaires had increased to 268 -- and the number of people living below the poverty line had increased to 34.5 million. A recent UN survey of the world's wealthiest countries ranked the United States highest both in gross domestic product and in poverty rates.

And what about the stock market and all of the shareholder value that you helped create? Here again, the rising tide only lifted the yachts. Between 1989 and 1998, the wealthiest 10% of American households saw their stock-market holdings increase by more than 72%, while those in the bottom 60% saw their holdings increase by less than 4%. Yes, stock ownership has been up by about 16% during the past 10 years. But more than 50% of all Americans don't own stocks or mutual funds, and only 33% of all households with stocks have holdings worth $5,000 or more. The bottom line: In 1999, at the height of a decadelong economic boom, one in six American children was officially poor, and 26% of the workforce was subsisting on poverty-level wages. More than 30% of U.S. households have a net worth (including homes and investments) of less than $10,000.