More on Whistle Blowers and How to Manage Them

The following piece on this topic appeared in the Globe and Mail.

http://tinyurl.com/o4ex72r

Surprising Truths About Ethics #3

The profit motive is not to blame. There are as many unethical actions in government and the non-profit sector as there are in business. Even though the profit motive can drive people to get ahead no matter what, so can political and bureaucratic motives. Does anyone doubt that the drive for position, power and fame is as ethically deforming as the drive for profit? It is only when seeking profit means seeking profit at any cost that you are likely to find ethics issues. But seeking power or fame at any cost has the same consequence. This is discussed in more depth in my book, Make an Ethical Difference.

Surprising Truths about Ethics #2

Here is a second and important surprising truth about ethics:

Technology can undermine ethics. Our ethical instincts arose to help us cooperate in hunter-gatherer groups. When you did something that hurt another member of the group, you were to feel some of that hurt yourself – conscience. But these ethical instincts work best when you are forced to directly experience the consequences of your actions. Today technology enables us to do harm at a great distance and essentially anonymously. Consider the taunts and lies promulgated via social media just because they can be delivered anonymously. One reason that drone warfare worries us is that it detaches the act of killing from any experience of it. Our technological reach has outdistanced our ethical reach.

Surprising Ethical Facts

I have spent thirty years discussing ethical issues with business people, doctors, and lawyers. While you might imagine high-minded discussions of complex issues, it is more often a matter of someone trying to escape responsibility for what they already know to be wrong. In ethics, it is usually not a matter of not knowing what is right. It is a matter of doing what you know to be right. Over the next series of posts, I will share some surprising ethical facts starting with this one:

  1. Ethics is often simple. Most people who do wrong things are perfectly well aware they are doing wrong things. Yes, there are challenging ethical puzzles but they have little to do with the choices we make in our daily lives. Does anyone imagine that the individuals who knew about the life-threatening ignition switches in GM cars did not know that selling these cars was wrong? They knew perfectly well but chose not to do anything about it to protect their positions in the organization. The question is not one of knowing right from wrong; it is a question of what made the organization so sick that knowing right from wrong didn’t matter.

By the way, this is one of the surprising ethical facts that I explain in Make an Ethical Difference.

Ethics for Start Ups

When you are starting a company, ethics may not be the first thing on your mind. The article referenced below talks about how to build ethics into a start up company.

http://www.alleywatch.com/blog/2015/05/08/5-keys-to-raising-ethical-standards-in-your-startup/

The Ethics Strategy: AMA

Those who have enjoyed the exchanges on ethics and strategy may want to look at the unified piece in the American Management Association’s “Playbook.” It is available at http://playbook.amanet.org/5-competitive-strategies-of-successful-and-ethical-companies/

In an Ethics Crisis Find the Root Cause

In an ethics crisis, it is not enough to know what happened; you need to know why it happened. Most organizations can survive a single ethics crisis. But if the same conduct is repeated, even if by different individuals, this will fix the negative impression of the organization in cement. Organizations tend to want to keep changes to a minimum, as big changes seem to be a further admission of culpability. But you need to be sure that you have changed personnel and systems sufficiently that the same conduct does not recur.

Recognize the Crisis

The biggest mistake made in an ethics crisis is not recognizing that it is an ethics crisis. Executives tend to overestimate the protection offered by the organization’s reputation and its legal defenses. And they often reason that the organization will not be held accountable for what someone did contrary to the organization’s direction or policy. This is untrue. The sooner you own any crisis, the less newsworthy it is. Early acknowledgement of an ethics crisis is particularly effective in showing that the wrong action is not characteristic of the organization.

How to Survive an Ethics Crisis

As a life-long ethics consultant, I have been in the middle of many ethics crises. You don’t hire an ethics consultant if everything is hunky dory. I have learned that ethics crises are different, and often more severe, than other corporate crises. An ethics crisis is about who you are as an organization and not just about specific actions that have gone wrong.

An ethics crisis is a crisis in which an organization is judged to have done something wrong due to poor ethics. Many business crises – whether it is the BP oil spill or the GM ignition switch – escalate into ethics crises. An initial unwillingness to accept responsibility is what turns a business crisis into an ethics crisis. The public will judge this unwillingness to accept responsibility as a sign of poor ethics. Most organizations eventually figure out that they won’t escape responsibility by denying it. But by then their credibility is shot.

Ethics crises are almost unavoidable for the simple reason that organizations are made up of people. Some of them will do unethical things in the organization’s name. If these actions have a significant impact, you have an ethics crisis. But even if ethics crises are not completely avoidable, there are things you can do to survive them. I will provide a series of tips on surviving ethics crises in coming posts.

The Ethics Strategy #5

As part of a long-term research project, I identified five competitive strategies common to organizations that are successful and ethical on a sustained basis. None of these strategies considered alone guarantees ethical success. I have been sharing these strategies through a series of posts. Here is the final strategy in this series.

I once worked with a CEO who temporarily suspended all of his company’s significant operations in Mexico because he couldn’t find a way for his managers to uphold the company’s ethics while doing business there. This is an extreme example of an important practice, which is looking at business opportunities in terms of their ethical implications. While this is especially important internationally, there are also business opportunities domestically that are hard to pursue ethically. For example, it is particularly difficult to pursue an ethics strategy in a market in which competition is based entirely on price. The time to exercise ethical judgment is when you are considering an opportunity as opposed to when you are in the middle of regretting it.