The crises that have unfolded at Wells Fargo and Volkswagen are high-profile examples underscoring leadership failure to model appropriate behavior and stand accountable for fostering ethical organizational cultures. On Oct. 28, at the University of Southern California in Los Angeles, I led a discussion on these very topics, at the DECIDE Center for Interdisciplinary Decisions and Ethics’ inaugural NEXT Generation Ethics Symposium. With opening remarks by USC’s Viterbi School of Engineering Dean Yanis Yortsos, this convergence of thought leaders and world-renowned experts included discussions on topics ranging from medical ethics to business ethics and leadership. Ethics, security versus privacy and cyber issues were also spotlighted topics, including next-generation drones and the ethics of surveillance.
At the invitation of DECIDE Center Director, Dr. Ali Abbas, I participated on an interdisciplinary panel on “Business, Healthcare, and Privacy Ethics.” My presentation provided a corporate lens into business and enterprise ethics, framed around the era of behavior, citing research from LRN’s Program Effectiveness Index and The HOW Report. The audience learned about incentives that drive decision making, including how “what gets measured gets done” and how to find true balance between recognition, incentives and creating a sustainable ethical organization. In other words, where does process end and the human factor step in?
Importantly, I highlighted the crucial role of leaders in modeling behavior and being accountable for fostering ethical organizational cultures, using Wells Fargo and Volkswagen as examples. I commend higher education institutions like USC on their investment in programs and forward thinking curriculum to develop next generation leaders. In fact, a panelist from USC’s Neely Center for Ethical Leadership shared that a critical skill and success factor for future students will be their ability to recognize values-based decision making as a metric that drives greater ROI, connecting the concept of profits to behavior.
Several key takeaways include:
- A critical need for greater development and self-awareness of leaders.
- Ethical relativism as a root cause of high-profile leader ethical lapses.
- Leaders need to recognize that speaking out is not just centered around employees raising concerns, but is a channel to open doors to greater collaboration and innovation.
- Modeling the message: Employees take cues from leader behavior to recognize openness to change, growth, and innovation.
- Fear of making the wrong decision often precludes leaders from making any decision. Research shows that this can impact the bottom line. Leaders much beware that inaction can create ambiguity and fatigue.