Building Trust 45 Trust and Ethics

November 11, 2021

There is a direct link between trust and ethics that is intuitively obvious. Naturally, when we find an organization that is highly ethical, we usually find a group that has achieved high trust. The reason is obvious.  Highly ethical organizations are open and honest at all times. These actions tend to build trust over time.

There is another very interesting relationship between these two concepts that is not all that obvious. It has to do with protection from making ethical blunders.

Recognizing Ethical Dilemmas

I have studied ethics for roughly 30 years and taught it in business schools at two different universities.  I am the chairman of the Board of Directors of an organization called Elevate Rochester, an organization that gives out “ETHIE” Awards to companies in our region that have outstanding ethical programs. My relationship with the topic of ethics is intense and constant.

One thing I have noticed is that a tricky part of trying to maintain an ethical culture is recognizing when you are facing an ethical dilemma. The reason is that leaders tend to rationalize a marginal situation and talk themselves into an unethical decision as being the right thing to do “under these circumstances.”

Many individuals and organizations have gotten themselves into significant ethical peril by this rationalization process. The leaders make a decision that is not consistent with what they have done in the past but is perfectly legal.  What they have really done is taken a baby step toward the ethical edge without realizing it. 

The next time a similar issue comes up, they have the prior action as an OK precedent, so this time they add some additional unconventional actions, still being perfectly legal. That is another baby step. It is the process of excusing somewhat shady things in an escalating fashion that leads to perfectly wrong actions over time.

That is how the Enron situation unfolded that led to its bankruptcy in 2006. They started out making small compromises that were legal but unconventional.  Many months later, they were doing things that were totally illegal. They got there through a series of baby steps that nobody called out.

How Trust Protects You

If you have invested in a culture of high trust, you are protected from deceiving yourself into thinking a marginal call is OK.  Let’s say an organization has 500 workers.  The leaders are contemplating showing the earnings numbers with a slightly different timing from the usual because it will make them look better.

If there is high trust, all 500 employees know it is safe to voice a concern about what is going on and not get punished for it. So, if a slightly shady practice is contemplated, some of the employees are going to speak up and say, “That may not be illegal, but it could easily lead to further compromises that might lead to an unethical decision in the future. I don’t think it is right to do it.”  

Conclusion

Leaders make tough calls all the time, and sometimes they cannot see where they are making compromises because of the “under the circumstances” logic.   By investing in psychological safety and trust within the workforce, it protects the leaders from rationalizing themselves into truly ethical problems.

Build a culture where it is safe to voice a concern, and you will have the blessing of people unafraid to tell you a contemplated action might be stepping closer to the unethical line.

 

Bob Whipple is CEO of Leadergrow, Inc. an organization dedicated to growing leaders. Website www.leadergrow.com   BLOG www.thetrustambassador.com He is author of the following books: The Trust Factor: Advanced Leadership for Professionals,  Understanding E-Body Language: Building Trust Online, and Leading with Trust is Like Sailing Downwind

Leave a Comment » | Building Higher Trust | Tagged: , | Permalink
Posted by trustambassador

Leadership Barometer 71 Demonstrate Integrity

November 11, 2020

There are hundreds of assessments for leaders. The content and quality of these assessments vary greatly. You can spend a lot of time and money taking surveys to tell you the quality of your leadership.

There are a few leading indicators that can be used to give a pretty good picture of the overall quality of your leadership. These are not good for diagnosing problems or specifying corrective action, but they can tell you where you stand quickly. Here is one of my favorite measures.

Demonstrate Integrity

Lou Holtz, the famous football coach had a remarkably simple philosophy of doing business. It consisted of three simple little rules: 1) Do Right, 2) Do the best you can, and 3) Treat other people like you would like to be treated.

The basic Do Right Rule means acting with integrity. If doing what is right is such a basic and easy thing, why am I even bothering to write about it?

It’s simple; most leaders have a hard time figuring out what the right thing is. That is a stunning indictment to make, but I really believe it is true on occasion. Reason: in the melee of everyday challenges, it is so easy to make a judgment that seems right under the circumstances, but when extrapolated to its logical conclusion it is really not ethical, or moral, or it is just plain dumb.

Rationalization

For a leader, it is easy to rationalize the particular situation and convince yourself that something marginal is really OK to do “all things considered.” There must be a safeguard for this common problem. There is, and I will reveal it later in this article.

The Problem Escalation

I believe that most of the huge organizational scandals of the past started out as subtle value judgments by leaders in their organizations. There was a decision point where they could have taken path A or path B. While path B was “squeaky clean” in terms of the ethics involved, path A was also perfectly logical and acceptable based on the rules in place at the time and was also somewhat more profitable than Path B.

The problem is that if path A was acceptable today, then A+ would be fine the next day, and A++ the next. Other people would get involved, and the practice would get more embedded into the culture.

Eventually, after a few years, it was clear that rules were being bent all over the place in order for the organization to look good to investors. There was no convenient way to roll back the ethical clock, nor was there any impetus. They seemed to be “getting away with it.”

Ultimately the practice, whether it was Enron’s disappearing assets or Bernie Madoff’s Ponzi Scheme, became too big to hide and things blew up.

My contention is that these people were not intending to do bad things originally, they just got caught up in what Alan Greenspan called irrational exuberance and had no way to quit the abuse. Of course, by that time they really were evil people doing evil things, but I believe it did not start out with those intentions.

At the start I believe these leaders were truly blind to the origin of corruption that brought down their empires and bankrupt thousands of individuals in the process.

The Antidote

How can leaders protect themselves from getting caught up in a web of deception if they were originally blind to the problem? It’s simple; they needed to create a culture of transparency and trust whereby being whistle blower was considered good because it protected the organization from going down the wrong path.

Imagine if the culture in an organization was such that when someone (anyone) in the company was concerned about the ethics of current practice and he or she brought that concern to light, there would have been a reward rather than punishment.

To accomplish this, leaders need to reinforce candor, in every phase of operations. It has to be a recognized policy that seeing something amiss brings with it an obligation to speak up, but that is OK because speaking up will bring rewards.

When leaders at all levels reward the whistle blower, it sets up a culture of high trust because it drives out fear. One of my favorite quotes is, “The absence of fear is the incubator of trust.”

The concept or rewarding candor creates opportunities for leaders to see things that would otherwise be hidden and take corrective action before the tsunami gets started.

It also allows leaders to be fallible human beings and make mistakes without having them become a reason for them to spend the rest of their life in jail.

So here is a good test of your leadership ability. How transparent is your organization? Do you truly reward employees when they bring up things that do not seem right to them, or are they put down and punished?


Bob Whipple is CEO of Leadergrow Inc., a company dedicated to growing leaders. He speaks and conducts seminars on building trust in organizations.

Leave a Comment » | Candor creates trust, Communications, Enabling Actions, HR, leadership, Organization, Table stakes, Transparency, Trust, Trust and breach of trust, Trust and fear | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Permalink
Posted by trustambassador

Leadership Barometer 11 Demonstrate Integrity

August 5, 2019

One great measure of the quality of a leader is how much that person demonstrates integrity.

That is an easy thing to say, but it is a bit harder to accomplish. Let’s pick apart the concept of integrity and see if we can find some usable handles.

First of all, integrity is easy to demonstrate when things are going well or according to plan.  It is a simple matter of doing the right thing, and the right thing is obvious.

Integrity is most important when it is difficult to do or the right path is hard to define.  It is in these moments when leaders have the ability to stand tall and radiate their integrity or duck the issue and do what seems expedient at the moment.

I call these times “Leadership moments of truth.”

Demonstrate Integrity

Lou Holtz, the famous football coach had a remarkably simple philosophy of doing business. It consisted of three simple little rules: 1) Do Right, 2) Do the best you can, and 3) Treat others the way you would like to be treated.

The basic Do Right Rule means acting with integrity. If doing what is right is such a basic and easy thing, why am I even bothering to write about it? It’s simple.

Most leaders have a hard time figuring out what the right thing is. That is a stunning indictment to make, but I really believe it is true.

Reason: in the melee of everyday challenges, it is so easy to make a judgment that seems right under the circumstances, but when extrapolated to its logical conclusion it is really not ethical, or moral, or it is just plain dumb.

Leaders tend to rationalize.

I believe that most of the huge organizational scandals of the past started out as subtle value judgments by leaders in their organizations. There was a decision point where they could have taken path A or path B.

While path B was “squeaky clean” in terms of the ethics involved, path A was also perfectly logical and acceptable based on the rules in place at the time and was also somewhat more profitable than Path B.

The problem is that if path A was acceptable today, then A+ would be fine the next day, and A++ the next. Other people would get involved, and the practice would get more embedded into the culture.

Eventually, after a few years, it was clear that rules were being bent all over the place in order for the organization to look good to investors. There was no convenient way to roll back the ethical clock, nor was there any impetus.

Ultimately the practice, whether it was Enron’s disappearing assets or Bernie Madoff’s Ponzi Scheme, became too big to hide and things blew up. My contention is that these people were not intending to do bad things originally, they just got caught up in what Alan Greenspan called irrational exuberance and had no way to quit the abuse.

Of course, by the time things surfaced, they really were evil people doing evil things, but I believe it did not start out with those intentions. At the start I believe these leaders were truly blind to the origin of corruption that brought down their empires and bankrupt thousands of individuals in the process.

How can leaders protect themselves from getting caught up in a web of deception if they were originally blind to the problem? It’s simple, they needed to create a culture of transparency and trust whereby being a whistle blower was considered good.

Imagine if the culture in an organization was such that when someone (anyone) in the company was concerned about the ethics of current practice and he or she brought that concern to light, there would have been a reward rather than punishment.

To accomplish this, leaders need to reinforce candor, in every phase of operations. It has to be a recognized policy that seeing something amiss brings with it an obligation to speak up, but that is OK because speaking up will bring rewards.

If you doubt that whistle blowers are routinely punished, take the time to view this brief video by Bill Lloyd. He blew the whistle at his company and paid a heavy price for it.

Bill said, “Sometimes it’s going to hurt, but it says everything about who you are as a person.”

The concept or rewarding candor creates opportunities for leaders to see things that would otherwise be hidden and take corrective action before the tsunami gets started.

It also allows leaders to be fallible human beings and make mistakes without having them become a reason for them to spend the rest of their life in jail.

So here is a good test of your leadership ability. How transparent is your organization? Do you truly reward employees when they bring up things that do not seem right to them, or are they put down and punished?

Bob Whipple is CEO of Leadergrow Inc., a company dedicated to growing leaders. He speaks and conducts seminars on building trust in organizations. He can be reached at bwhipple@leadergrow.com or 585-392-7763.

Leave a Comment » | Candor creates trust, Communications, Enabling Actions, HR, leadership, Organization, Table stakes, Transparency, Trust, Trust and breach of trust, Trust and fear, Trust and motivation, Trust and respect | Tagged: , , , , , , , , , , , , , , | Permalink
Posted by trustambassador