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Everyday Ethics as a Key to Business Success: Can We Do Well by Being Good?

March 5, 2019

"Most employees who behave unethically fail to understand that their behavior is indeed unethical and can have harmful consequences."

 

Do you buy that? 

 

Yuval Feldman says so in a thoughtfully framed piece in Harvard Business Review this week ("Companies Need to Pay More Attention to Everyday Unethical Behavior", HBR, March 1, 2019) and argues that employers need to (1) draw their people's attention to what is in fact ethical vs. unethical on a regular basis; and (2) demonstrate that infractions are greeted with real consequences. Easier said than done?

 

This conversation feels quaint and even naive when considered next to the testimony in Congress last week by former Trump fixer Michael Cohen, who spoke at length about year after year of his contributions to a company with highly questionable business practices. Of course the practices Cohen detailed are gravely serious, especially next to the maddeningly common examples of stolen pads and pens that seem to permeate the business ethics literature. "Threats, Lies and Videotape" would be an appropriate title for the presentation made by this already convicted felon who is facing multiple years in prison for lying to Congress. The practices Cohen described as the normal course of business in the Trump organization surely warrant further examination and will get exactly that. One could argue that this particular business is far from the right example to use in examining whether good behavior will or will not be rewarded at work. However, things do not appear to be ending well for many of the President's men. They made their choices. It is possible that even they will conclude that resisting the pull toward conceit and deceit would have been a better career move for all. But what does this say for the rest of us and the companies we lead?

 

Researchers believe (unsurprisingly?) that ethical leadership breeds ethical behavior or at least has a chance to do so. Among the findings of an extensive 2015 study ("Organizational Culture in Corrupt Companies", Corporate Compliance Insights, May 22, 2015) of ethics in corrupt business organizations was that "[l]eadership is the most critical factor in determining whether an organizational culture is vulnerable to corruption."

 

Author of the study Alison Taylor writes that "[t]his is because employees mirror leaders’ behavior, and this leads to the creation of group norms offering “social proof” that corruption is acceptable."

 

Takeaways?

  • It falls to you as the leader of a small team or an entire company to set an example, because you and your top people will be imitated throughout the organization.

  • Experts urge you to be explicit with your people about what the company values are and what the consequences are for those who fail to embrace them.

  • Follow through or nobody will believe you.

 

Leaving aside the clear impression many were left with after the Cohen testimony that this is exactly what Trump did (only perhaps without a trace of ethics), we can all reach the same conclusion about leadership: you create the expectations and you supply motivation to adhere. Nobody said it would be easy to be in charge. But you are. And you have a chance to make it possible for your people to do well by being good. 

 

Andrew Tarsy is Principal and Founder of Emblem Strategic LLC.

 

 

 

 

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