Ethics: The beating heart of leadership

August 23, 2017

Leaders are more and more being defined not by what they do, but rather by the way they do it.

The way that a leader guides, influences, manages and moulds their organisation, department or team towards the achievement of its goals is as important – if not more important – than the achievement of the goal itself. Or at least it should be.

Increasingly, organisations are realising that the days when productivity improvement above all else and ‘profit at any cost’ are coming to an end. The end no longer justifies the means.

Of course, the pressures facing organisations, and leaders inside those organisations, are as strong today as they always have been. We all face making difficult business decisions while under economic or social pressures that frequently bring into focus our ethical values.

Being an ethical leader and making ethical decisions isn’t always easy. So, what has changed? Why is ethical leadership becoming a hot topic – the hot topic – in organisations and in broader society?

There are perhaps two explanations for the gradual creep of ethics into boardrooms, meeting rooms and lunch rooms:


Ethics & Culture

The first is what might best be referred to as a crisis of culture. Since the GFC corporate culture has found itself increasingly in the spotlight. The sub-prime crisis that began in the US and spread quickly across the world brought corporate culture out of the shadows and onto the main stage.

The public in general – and the media specifically – is much less forgiving than perhaps it once was. The days when culture was squashed by strategy (and results) are gone. In the words of Curt Coffman and Kathie Sorensen, “Culture eats Strategy for lunch” and that lunch will absolutely no longer be held in a less than salubrious venue.


Ethics & Transparency

The second reason is something that I like to call the Snapchat Syndrome. When Snapchat was first launched is was hailed as the being unique because users could share things – photographs initially – privately. After a few seconds these photos would disappear and your secrets – or photos of last night’s dinner – would remain secret. Of course, that was the idea. The reality turned out to be a little different.

And so it is with organisations; secrets are almost impossible to keep. There are too many outlets for information and too many interconnected parts. The leaders at Volkswagon obviously thought that when they rigged the emissions software on the company’s vehicles their actions would stay secret. They obviously didn’t anticipate a curious expert in the field of emissions testing taking a closer look at their dodgy data.

In short, there are fewer hiding places. Companies – and leaders – must ensure that they look in all the corporate nooks and crannies, before somebody else looks there. Turning a blind eye, hoping the issue goes away or gets buried or magically disappears after a few seconds isn’t good enough.


Ethics & Trust

As leaders, we have a responsibility for creating and maintaining trust. One of the biggest lessons to be taken from recent ethical scandals involving previously reputable institutions such as Volkswagen is the level of trust that consumers – and society more broadly – had placed on these organisations to do the right thing.

Perhaps most common failing of organisations and of leaders is to consider profit to be the number one priority. Surely for any organisation the top priority is longevity of brand and reputation. It is this that ensures its survival.

In today’s increasingly connected world unethical business practice is a sure-fire way of ensuring an organisation’s – and a leader’s – demise. One wonders how long it will take an organisation like VW or FIFA to recover? (In the case of FIFA it is unlikely that it will survive at all – at least not in its current form).


Ethics & Leadership

Of course, the ethical compass of an organisation trickles down from the top. Leadership matters because ultimately the buck stops with the Board, with the CEO and with the leadership team. But the reality is that the question of ethics is not simply a leadership issue, it’s a personal issue.

As leaders we must set the example by leading with integrity. If ethical decision making is the beating heart of leadership we must recognise that personal responsibility lies at the heart of every decision we make at work. It isn’t good enough to blame the culture or the organisation, the targets we have to achieve or the limited time we have to achieve them. None of these things cause us to act unethically. We choose to act in that way. We should choose not to.

As leaders we need to foster an environment where personal responsibility is encouraged and rewarded. An environment where people feel safe to say they aren’t comfortable with something they see and are empowered to raise ethical issues and to call out unethical behaviours.

As leaders we need to walk the talk when it comes to ethics.


About the author:

David PichDavid Pich is Chief Executive of the Institute of Managers and Leaders, Australia and New Zealand.

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