“Doing what’s right” lies at the heart of ethical leadership. In business there’s always room for debate about what this means in practice.
Often it comes down to personal judgement. This must be combined with: using the norms of what’s acceptable in society; and staying consistent with company and personal values.
To justify or explain a decision it is seldom good enough to claim: “I did what I thought was right”. This usually turns out to be more complex than saying one acted authentically.
The report eviscerates his excuse “I did what is right at the time” as an answer for poor judgement. He failed to respond to unwanted advice. He also made a unilateral decision that should have been a collective one.
“Plans were not shared with senior ministers, for fear they would leak. The full legal reasoning of the attorney general was not made available to the cabinet. Official papers were not circulated.
Robin Butler, former cabinet secretary at the Chilcot debate, July 2016
Blair also ignored the information on WMD from Hans Blix, who had been searching for these weapons in Iraq.
In business, the stakes are seldom as high as starting a war. Yet there have been many occasions where business managers have acted like Blair. They have ignored important evidence that contradicted their views. They too have hidden behind the claim: “I did what I thought was right” to explain their bad choices.
In the Ford Pinto fiasco for example, any data that threatened the car’s sales was anathema. The then boss Lee Iaccoca refused to listen to any feedback on the dangers posed by the car being a fire hazard.
Likewise in the GM ‘s starter scandal, managers used a spurious cost benefit calculation. Their approach reduced an important ethical choice of removing a dangerous car part to a mere accounting procedure.
VW managers too convinced themselves that hiding adverse emissions data benefited the company. For example, the then CEO knew about the cheating more than a year before the company admitted it was systematically cheating on US regulators tests. But he did nothing about it.
Two clear problems emerge with making sense of “doing what’s right.” First, it’s often hard to appreciate every business decision has an ethical dimension.
Second, what’s “right” varies across different societies. There’s no universal “norm” for what is the right ethical choice. It’s hardly surprising business leaders sometime struggle with this. A useful guide for deciding what’s right consists of four simple test questions about the choices:
- The Kid test: would you do it if your children were watching?
- Newspaper test: would you like to see this decision published on the front page of a major newspaper
- Golden rule test: would you be happy to be on the receiving end of the decision
- Universal test: would it be alright if everyone did it?
If you could say yes to all these it’s likely the decision is ethical.
For example, Shell’s now intends to dispose of a North Sea Oil rig. It wants to avoid another Brent Spar fiasco when the “right decision” then proved to be the exact opposite.
So Shell is spending millions lifting the current 23,500 tonne steel superstructure for disposal. That will still leave the huge subsea structure. It weighs 300,000 tonnes and is as large as the Empire State Building. It would take thousands of years to erode if left in place. To abandon the rig would therefore not “be alright if everyone did it.”
From studying business decisions for their ethical dimension, leaving it to the leader to decide “I did what I thought was right” is a recipe for disaster. Most large scale situations require a collective approach, best tackled by a group of people, not just one.
Not a moveable feast
Since even the definition of ethics can be vague, how does a business ensure its choices are ethical? Sticking to what’s legal is not enough. Something may be legal yet still be morally wrong.
What matters is having leaders who lead ethically. That is, how they treat people in every day situations. In their attitudes and how they encourage others to make ethical choices.
Ethical leadership is both visible and invisible. The visible part is how a leader works with others, communicates values and acts as a role model. The invisible part lies in the leader’s own character. Does he or she have a process for making decisions, using personal values?
1) Consistent—the principles fit together and don’t contradict each other
2) Action based—there’s a clear basis for what to do and what not to do
3) Adaptable—reviewed often and adjusted as ethical thinking develops.
Finally, does anyone in the organisation actually talk about ethics? In our discussions with half a dozen international organisations the senior management nearly all claimed that “ethics” was alive and well, and people regularly talked about this.
The best leaders encourage discussions of ethics in general and of the ethical choices involved in specific situations. This needs to be part of the ongoing culture of the organisation.