Recruit the Right People: Ethics Strategy #1

This series of posts explore strategies for building an ethical organization. One of these strategies is to hire the right people.

It’s important to remember that there’s a limit to how much an organization can influence the ethical conduct of its employees. If an employee is not ethical when hired, they are unlikely to become ethical because of something that happens at work. There are different theories about the age at which a person’s ethics is set, although it is clear ethics is set in early adulthood at the latest. The idea that you can begin ethics training with employees at all stages of their careers and somehow make them turn out to be ethical is wishful thinking.

Instead, you need to hire people who are likely to be ethical. One approach is to encourage employees to self-select whether they will fit the ethics of the organization. One high-tech organization shows prospective employees a video on the organization’s ethics before it allows them to complete an employment application. They have found that some employees don’t bother to apply as a result. Interestingly, the company also attracted more of the employees it otherwise sought.

An organization can tailor any of several widely used survey and screening instruments that have some validity. While the ability of a survey instrument to pick out the most ethical employees is limited, employees who are ethically clueless are likely to stand out.

Often, just letting your recruiters know that ethics is an important consideration in your organization’s hiring process will produce results. Tell them that fit with organization’s culture will be important factor in finding the right candidate and you may at least screen some unethical candidates out – for example those who lie or exaggerate on their resumes.

3 Steps for Developing an Ethics Strategy

Suppose your organization understands the reputational and legal risks of unethical conduct — yet, the organization has no strategy to ensure that its employees support ethical conduct. Sure, there is a code of conduct, but that’s not a strategy. Organizations who want their employees to stay at the cutting edge of technology have a strategy to attract and develop such employees. Why is it, then, that organizations do little more than hope that their employees will do the right thing? Over the forthcoming series of posts we will explore three ways in which an organization can develop a practical strategy for improving the ethics of an organization.

The Truth about Ethical Organizations

I have been involved in survey research on ethics through the Council of Ethical Organizations for the past twenty years. This article in the Huffington Post identifies three factors unique to ethical organizations based on this study. See http://www.huffingtonpost.com/mark-pastin/the-truth-about-ethical_b_10548990.html

The Three Keys to Ethical Organizations

There are many ideas about the factors that contribute to the ethics of an organization. These ideas range from ethical leadership to a concern for stakeholders to having a mission beyond economic success. While these ideas seem plausible, there is little evidence to support them. More importantly, there is often little you can do to affect these factors. A company that makes coat hangers is limited in the extent to which it can make its mission inspiring.

So a team of researchers set out to isolate actionable factors that contribute to an organization’s ethics. Their research found three factors that any organization can use to improve its ethics.

The first factor is a work culture in which employees are never retaliated against for reporting concerns. Many studies show that organizations in which employees report errors do better on quality measures and our research supports this. Employees in all organizations fear retaliation to some extent, especially when reporting on their managers. This fear of speaking up allowed unethical practices to persist at GM and Volkswagen even when many employees knew better. Ethical organizations don’t pretend that fear of retaliation does not exist but instead work to create a culture in which retaliation is not tolerated and reporting is expected. More to follow.

Newsweek’s Response Re Bernie Sanders

Someone at Newsweek picked my recent piece on why the young are so excited about Bernie Sanders and dared to disagree with my analysis. You can read Newsweek‘s take on this controversy at http://www.newsweek.com/bernie-sanders-followers-socialists-fabian-george-bernard-shaw-437017.

Up Close and Personal: Why It Matters

Is there still a point to having in-person, flesh-and-blood meetings? Is there a point to such meetings when we can see and hear a person in another part of the country/world as if they were seated across from us? Is the belief that being there in-person still matters just a pre-technological bias that will pass as technology makes remote communication even more accessible? My work in ethics tells me that there is a point to in-person meetings – and we can put our finger on just what this point is. I explain this in the Huffington Post at http://www.huffingtonpost.com/mark-pastin/up-close-and-personal-why_b_9394572.html .

Practical Lessons from Ethical Leaders

If you want to know how ethical leaders drive their organizations you may wish to visit the following piece from the Globe and Mail.

http://www.theglobeandmail.com/report-on-business/careers/leadership-lab/five-practical-lessons-from-ethical-leaders/article28963439/

More on Ethical Influence

If you are interested in strategies for ethical influence, you may enjoy this piece from CEO Magazine.

http://blogs.the-ceo-magazine.com/blog/markpastin

 

A Final Trait of Ethical Leaders

We have looked at several traits of ethical leaders. The final trait has as much to do with what ethical leaders don’t do as much as it relates to what they do.

Pass on some opportunities.

There is a lot excitement in a company when a new opportunity presents itself. Despite this excitement, ethical leaders look at opportunities not only in term of what is gained, but also in terms of the ethical implications of pursuing the opportunity. The CEO of a construction supply company won the right to sell heavy equipment in Mexico. However, he asked his team how they could succeed in Mexico without paying bribes. There was no answer so he passed on the opportunity. The company which seized the opportunity was plagued by corruption charges not only in Mexico but also at home. For ethical CEOS, if you cannot pursue an opportunity ethically, you cannot pursue it at all.

More Traits of Ethical Leaders

We have discussed two traits of ethical leaders – limiting what they say to what they can say truthfully and knowing the stakeholders. In this post, we discuss two more traits of ethical leaders.

Surround yourself with truth tellers.

Many CEOs express surprise at how little they can directly know about the organizations they lead. All CEOs are dependent on their direct reports and other managers to tell them how things are really going. Ethical CEOs are always looking for direct reports who tell them the truth even when it is very uncomfortable to do so. These CEOs know that they will only be able to learn the truth if they reward managers for candidly delivering bad news. Delivering bad news does not come naturally to highly competitive individuals seeking to advance their careers. It is only by making a conscious effort to reward individuals who deliver bad news that a CEO can gain a realistic idea of what is going on in the organization.

Learn for yourself.

No matter how much effort you put into rewarding candor on the part of those who report to you, there is often no substitute for looking at things for yourself. I remember talking to the CEO of a financial services company that had just barely survived a scandal. I suggested that he visit all of the company’s field locations to tell his team what he expected of them and also to listen to how they felt about what had happened. The CEO said, “You means you want me travel around the country and sit on red plastic chairs drinking coffee out of styrofoam cups?” Exactly what I meant. By doing this, he not only put the company back on track, but he also learned how it had gotten on the wrong track.