Wells Fargo. Turing Pharmaceuticals. Uber. Facebook. Equifax. These are all very well-known corporations within their respective industries. Though very different in nature, in recent years, all have gained attention for the same reason – a lack of ethical organizational practices. Authors Max Bazerman and Ann Tenbrunsel of Blind Spots: Why We Fail to Do What’s Right and What to Do About It, maintain that such scandals lessen the public’s confidence in business leaders.
It is no secret that most organizational leaders face difficult decisions on an almost daily basis, but it is how leaders approach and deal with these situations that affect long-term organizational success. Character-based leadership can no longer be a buzzword in today’s world where unethical decision-making, corruption and eye-brow raising behavior makes news headlines more often than ever before. It has become a necessity, as the effects of such decision-making range from small issues to those that can be far-reaching, even catastrophic.
Leadership and ethics expert, Dr. Joanne Ciulla, notes that it is impossible to talk about leadership without talking about ethics. It finds its roots in the leader’s character, integrity and authenticity – the inward conviction one has – in which the desire to do the right thing, results in doing the right thing. It must be about how to lead, the place from which one leads and embedded in the decisions leaders make. In other words, the focus of ethics is on matters of the heart, character and right intention. As such, ethics play a crucial role in modern day organizations. But, to what end? As a starting point: to cultivate positive organizational culture and strong workplace relationships.
- Creates a Values-Based Culture. The success of any organization is dependent on its culture. One of an organization’s strongest assets, culture serves as a guide for how things should be done. Generally, culture is crafted by the organization’s leadership. As Dr. Ciulla notes in her book, Ethics the Heart of Leadership, leader behavior helps to set the tone, develop the vision, and shape follower behavior. As such, ethics, and more specifically, ethical leadership, can assist with the creation of a values-based culture. Research suggests that ethical leadership encourages ethical followership. In this way, a more ethical work environment is created.
In this way, ethics not only set the stage for the type of culture an organization creates, but it must also be at the forefront of the decision-making process, from the practices and policies the organization employs to the personnel it selects. Leaders must consider not just their moral values, but the values of those they hire to ensure there is person-organization value alignment. Such shared beliefs work in combination with an organization’s strategy to provide a structure for how its goals should be met. A positive organizational culture based on values such as honesty, transparency and compassion offers many benefits. Chief among them are increased productivity, communication, trust and collaboration.
- Cultivates Strong Relationships. An organization is only as strong as its relationships. Given this, it is imperative that leaders build strong professional relationships through demonstrated ethical interactions and principles. Employees, investors and consumers are all key stakeholders, and each of these relationships must be carefully managed. Trust, then, is a critical component in the management of the relationship building process.
For example, if employees see those in leadership hold themselves to a high standard of ethics, they are more likely to feel comfortable that the decisions that are made have considered their needs. Similarly, investors and other funders must also be confident in the decisions of organizational leaders and their ability to ensure the welfare of the consumer. An organization’s ability to reap financial gain must take a backseat to the wellbeing of the organization and its people. In other words, leaders must be responsible and act as good stewards over that which has been entrusted to them. Such trust is cultivated through intentional relationship-building.
How then does a leader go about achieving these desired outcomes within their organization? As a starting point, consider these five steps:
- Practice inclusion and shared leadership when confronted with significant decisions. This increases accountability and decreases the risk of promoting self-serving interests.
- Implement clear ethical policies that align with the organization’s mission and values. Use these policies and guidelines as a measure by which to conduct an internal gauge of the organization’s adherence and commitment to the values listed. Adjust often and accordingly.
- Create a culture that encourages employees to share and welcomes open and honest dialogue about expectations.
- Provide access to ethics training for new hires as well as on-going ethics development courses that promote shared learning.
- Facilitate intentional and transparent relationship development with all stakeholders outside of the walls of the organization. Engage and participate in community-based programs that align with organizational goals and values.
The goal of ethical leadership within organizations should be to lead in ways that create significant impact and change through influence. As those charged with the responsibility of stewarding organizations and its people, organizational leaders must behave in a manner worth imitating. As such, leaders must stand firm in the face of opportunities that only result in short-term gains at the expense of long-term organizational stability. Ethical leadership requires a continuous commitment to modeling for followers consistently what we know to be right, true and good.
