Authors: Mike Eichenwald and Jan Stanley
Stop by most compliance conferences these days and you’ll likely hear a few common keys to building an ethical culture within your organization. Sure, tone at the top (or even in the middle) matters, as does role modeling. But can the challenge of inculcating an organization with a true sense of ethics be reduced to these directives? As skilled, powerful or charismatic as any executive or middle manager might be, can anyone really just set a tone and expect elevated behavior to follow?
Excellence is “not an act but a habit,” Aristotle famously said. “We are what we repeatedly do.” As with anything worthwhile in life and in business, excellence in ethics takes practice, vigilance and hard work. Organizational cultures truly animated by ethics, such that employees who are faced with ethical moments of truth can be counted upon to do the right thing for the right reasons at the right moment, need to be built brick by brick, leadership act by leadership act.
So what types of leadership acts constitute the building blocks of ethical organizations? Here are three suggestions.
Practice #1: Make ethics bigger than misconduct
In a recent interview, Apple CEO Tim Cook observed, “When many people in business think of ethics, they think of accounting fraud, they think of insider trading.” Cook added, “This is not what I think of. I think of leaving things better than you found them.”
Indeed, ethics covers a much broader landscape than simply what can go wrong. It’s not just about preventing law-breaking or regulatory rule-bending, but about finding meaning for our teams and organizations. It’s about providing opportunities for everyone to do what’s right. This means that the individuals who make up organizations need a clear, shared construct of what right is.
To help your employees make the right decision in that difficult moment, begin at the beginning. Clearly articulate the ways in which your company makes a positive difference in people’s lives, and help employees connect the dots to their own daily work. In doing this, you’ll help employees understand specifically how they contribute to the larger mission. This line of sight helps employees understand the impact of their decisions on what matters most. In this way, you will provide a challenge to employees to make the best use of the firm’s assets to leave the world better than the way they found it.
Practice #2: Make ethics personal
If we want our teams to make the ethical choice, we need to explain our own decisions, along with the values underlying them. What are the stories from our own lives that helped us find our moral compass? Who are the leaders we look up to, and what is the wisdom they’ve brought to tasks and challenges? What values do we hold most sacred, and how do they contribute to a culture of ethical excellence?
Values aren’t for the easy things. They are for the hard things: when we’re not sure what to do, when we’re afraid of the consequences, when the shortcuts we could take look so easy and all that’s holding us back is ourselves. It takes a lifetime of experiences to gird ourselves for these situations, and we need to share our own experiences and perspectives with our teams.
Ethical leadership isn’t only about declaring ourselves and our values, of course, it’s also about inviting others to join in. For some this might not come naturally. Employees might not know how to give voice to what they feel to be true and right, or how to describe their values systems. They may be reticent to share the stories that give meaning to their values systems, seeing them as private. Helping others find their voices, helps to forge stronger and deeper connections.
How to begin? First, reflect on the people, places and experiences that helped shape your values system and ethical compass. This might include a leader you admire for their ethical excellence or a story that helped shape your moral compass at an early age. Reflect on what you’ve learned, and set aside time to declare yourself with your team. Invite others to declare themselves, and listen hard to what they share. Ask good questions, and reduce the risks for others to speak out.
Declarations aren’t a “one and done.” They need to become a practice. You’ll build stronger relationships as you go along, and the relationships will be built on the trust extended when people share what’s deeply important to them.
Practice #3: Internalize ethical behavior
While misconduct can be viewed as binary, we either followed the rule or we didn’t, ethical conduct is behavior of a higher order. Ethical behavior is not as much about following rules as it is about understanding the next right and best action to be taken in any set of circumstances. Ethical conduct goes beyond the rulebook and, as such, comes with its own shades of gray. To behave with our highest ethics always in mind, this often murky, shifting territory needs to be explored. In a world of increasingly complex challenges, we must not only build a culture where employees make the right call in a moment, but build our capacity to make the right next call.
Just like athletes review tape with their coaches to understand why they did what they did and what they could have done differently, great ethical leaders create space for teams to think things through together and learn from one another. This requires asking difficult questions around integrity, justice and fairness and evaluating behaviors and outcomes in that light. It also requires a willingness to change your mind, acknowledge failings and make amends when you get it wrong.
Evaluation is important, but the goal is not to find fault or to place blame. The goal is to internalize ethical conduct or right action. The goal is to learn from what we did this time to make it even better, achieve an even higher ethical standard, next time. To create an environment where teams reflect on what they did, and what they might do differently going forward, effective praise is absolutely critical. Most leaders, most humans, are experts at critiques. We can see immediately where someone went wrong and what they should do differently. These critiques can be helpful, especially in the business of preventing misconduct. Effective praise, however, or providing specific positive feedback on what an associate did well, is a key to an ethos of excellence. While praise may seem like a reward or an incentive (we all like to receive compliments), effective praise is much more strategic, highlighting specific actions taken by an associate that should be replicated or amplified in future efforts. When leaders cultivate growth mindsets in others and offer specific positive feedback on what to repeat, associates respond by moving toward excellence.
Ethical leadership is really about helping others develop the will and capacity to make ethical decisions. This means making it big, making it personal and making sure to practice.
Good luck in 2018!