Posts Tagged ‘Ethics

27
Mar
11

Five Key Ethical Breakdowns

Businesspeople are facing an ethical crisis in their profession. Our public esteem is at an all-time low with no signs of rising. It will take all of us working together to fill in the hole we have made. Ethics have never been more critical – or more precarious. 

One of the issues we all face is our ability to assess ethics – our own and others – under changing conditions. In the latest issue of the Harvard Business Review, Max Mazerman and Ann Tenbrunsel show how any of us can go astray. In their article “Ethical Breakdowns,” they outline five critical factors that can trip anyone up:

  • Ill-Conceived Goals. Inadvertently setting goals that promote a negative behavior. The pressures to maximize billable hours or revenue per customer are both examples of goals that can promote negative behavior.
  • Motivated Blindness. We can overlook the ethical behavior of others when it’s in our interest to remain ignorant. Baseball officials ignoring the spread of steroid use in their game is a good example of that phenomenon.
  • Indirect Blindness. We hold others less accountable for unethical behavior when it’s carried out by a third party. A drug company licensed one of its marginally profitable specialty drugs to a third party, then raised the manufacturing price, which in turn led the licensee to raise the consumer price. The company used the licensee to impose a 1,000% price increase, deflecting attention from itself.
  • The Slippery Slope. We are less able to see others’ ethical failings when they happen over time. Auditors may fall prey to this if a company’s questionable practices accumulated over time, rather than all at once.
  • Overvaluing Outcomes. We give a pass to unethical behavior if the outcome is good. A researcher with fraudulent clinical trial entries is more likely to be given a “pass” if the drug works than if it doesn’t.

We all face examples of these conditions in our everyday business roles. The article does a great job of pointing out how these biases can cause even the most ethical person to slip into an unethical position. It’s often not the clear-cut decision between good and evil that trips us up. Rarely is it that simple, clear, or visible. 

Almost all of us aspire to high ethics and the best of behavior. If that applies to you, I encourage you to read the article. You will be surprised how our internal biases and can throw us off that high road!

 

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13
Mar
11

Changing Capitalism — (Unintended) Part 3

The OWM checked in from his den.

 

The OWM Himself!

“You made some very good points last week and I agree with most of what you wrote.” He said. “I’m just not sure what I should be doing. What must I do to be saved?”

Here are three ideas:

  • ·         Help yourself – set high standards;
  • ·         Help fellow life travelers aim high; and
  • ·         Help a kid and show them the way.

Help yourself and set a high standard. I was talking with a friend last week about a man I work with and his extraordinary high standard of ethics. My friend commented that it was much easier to maintain a high standard of ethics than a lower one. “It takes away more of the gray areas.” He said. I thought about it for awhile and tend to agree.  

That makes the case for setting an impractically high ethical standard that stretches us to new levels. Set a clear standard for yourself. Two possible standards are the “New York Times” and the “If everyone…” standards. The “New York Times” standard calls for you to act in a way that you would be proud to see it on the front page of the “New York Times.” The other standard asks “If everyone acted the same as you, would the world be a better place?” Both of them are high standards and provide a way to measure and reflect on our actions. Aim high with your ethics. It’s much easier. 

Second, help your fellow travelers in life aim high with their standards. The first step is to set a good example by your own actions. It’s a necessary, but not a sufficient condition to helping others aim high. Next, engage and encourage your friends and peers to reach for their own high standards. Make sure you understand their perspective. Gary Cohen modifies the Golden Rule a bit in order to put this into a bit of perspective. We all know the “Do unto others…” part of the rule, but Gary changes the second half to read “…as others would do unto themselves.” That change forces us into their shoes. We need to understand their position, but refuse to accept anything but the highest ethical behavior from people in our personal circles. You can show other people that ethics do matter. 

Finally, help a kid and show them the way that ethics can make a huge difference in their lives. First, provide practical help. Be a tutor. Join a reading program. Serve as a mentor. Use these times to show them the high road and teach them how to make good choices. Then, encourage those good choices. Grow where you are planted – make a difference where you are. Move and get into the game! 

OK OWM, there are three ideas to put the ideas into action. The irony is that you taught them to me!

 

 

 

06
Mar
11

Changing Capitalism – Part 2

It’s time to refresh our capitalistic system. It is the greatest economic system ever devised by mankind and it requires constant attention and vigilance to maintain its relevance and vitality. These are times that demand that leaders step forward and take a courageous stand. 

At its core, capitalism depends on trust and leadership to survive and thrive. Right now, trust in business leaders is at an all-time low. We need to change business-as-usual in order to change the tide. If we don’t raise the bar and hold our profession to a higher standard, we will cede the right to control our future to politicians and regulators. 

Unfortunately, we deserve the ratings we are receiving right now. Our leaders have been involved in numerous ethical breaches from Enron to Wall Street. We have failed to truly embrace innovation in a way that harnesses all our talents and potential. We surrendered some of the strongest parts of our economy to foreign producers. As businesspeople, we have not done a terrific job in maintaining our world leadership. 

The Great Recession only emphasized these points. The downturn left us with high unemployment and slow growth. Our traditional growth engines have stalled with little opportunity for robust recovery. It’s unclear how we will grow in the future and people are looking for leaders who can make sense out of the present situation. 

It’s time for business leaders to step up and the downturn provides many opportunities. Managers can no longer masquerade as leaders: The present situation is too important and too fertile to be left to people looking for incremental solutions or actions that worked in the past. Stress opens gaps for genuine change and opportunities to engage in a new way. 

The true challenge to refresh capitalism is to raise the bar for all participants. It’s time to demand better performance on all fronts – not just the financial metrics. All of us must live up to a higher standard of personal performance and ethical benchmarks. It starts with each one of us individually answering the challenge. 

We live up to the standards individually, but we are judged collectively. Therefore, it is no longer acceptable to just look at our own performance and the performance of our charges. We must also accept responsibility for the actions of our peers and hold them to the same level of accountability. It’s no longer acceptable to say “I’m good” and leave clean-up to someone else. We are being judged as a group and we are only as strong as our weakest link. We can no longer stand by, wring our hands, and grumble about those who let us down. 

As leaders, we must demand more from the system. That means you and it means me. How are you making yourself better this week? How are you helping your organization live up to a higher standard? What are you doing to make that standard a norm in your community? 

It’s a difficult challenge…but no hill for climbers! Our future success demands that we set the new standard.

 Are you ready for the challenge?

 

24
Oct
10

Taking Your Stand on Ethics

Everyone is for ethics. They fall in the categories of Mom, apple pie, and the American flag. No one stands up and takes a stand against high ethical standards.

Still something is amiss…

Here in Minneapolis it was another week of watching the antics of Denny Hecker, trying to convince a Federal Judge that he had no idea where $200,000 went this summer. It went on as his lawyers then tried to make the case that he should be released so that he could find the missing receipts. Let me get this straight: Hecker “misplaces” the receipts and then we should reward his shenanigans by giving him back his freedom? Good grief!

Hecker’s story is certainly not the only high-profile case in the Twin Cities. Tom Petters fraud case and Trevor Cook’s investment scam also made the headlines. Nationally, we have Bernie Madoff, Mark Hurd, and the scores of personalities around the banking crisis to serve as bad examples. Sliding ethical standards allowed each of these people the room to operate. Scarier is the willingness of other leaders to defend some of these actions as “not that serious” or “necessary evils.”

The willingness of business leaders to tolerate unethical behavior must stop. We are entrusted with the control of many of the world’s resources. Our calling is to be good stewards of these resources and we should take that calling seriously. If we fail to respond, the government believes their calling is to protect citizens from unethical businesspeople. They are already taking action and will continue to tighten their grip – not what any of us want.

It’s time to take a stand!

Adults have already formed their ethical standards and approaches. We can only have limited impact on these folks. Deterrence and prosecution are the tools we can use to limit damage. 

We do have the opportunity to influence our youth and make sure that high ethical standards become an integral part of their lives. They are the leaders of the future and can be shown and taught that ethics do matter.

It’s time to take your stand!

On November 12th, a group of concerned leaders will hold an Ethics Summit at St. Thomas. Former prosecutor Hank Shea will lead a morning of activities designed to start the discussion on how we can make ethics an integral part of our youth’s development. Join us as we explore ways to mobilize the Twin Cities to consistently bring ethical considerations to the fore. Invest twenty bucks and a morning of your time to the cause.

Register on-line (by clicking here) or contact Sara Paul at touv0001@umn.edu or (651) 338-1302 to be a part of the movement!

 

07
Aug
10

Ethical Change

We discuss change all the time in this space: Making effective change the right way. There was a great First Tuesday talk this week at the Carlson School about the need for change in the ethical approach we take as leaders.

Mark SheffertMark Sheffert’s talk was titled “Was Karl Marx Right?” Sheffert outlined the Marx thesis that capitalism would sow the seeds of its own destruction, as the elite’s greed for power and money would cause revolt. The revolt would replace capitalism with the communism – a more just economic form. Could this be happening right now?

The statistics are more than a bit frightening. In 1980, CEOs were paid 30-times more than their average employee. Today the ratio is 500 to 1. The richest 1% of the population increased their share of the pie by 7%. The top 25 hedge fund managers were paid over $25 billion – money that could have paid 600,000 teachers which could have taught over 13 million students. Oh yes…it happens in Minnesota too! Is the CEO of the state’s largest insurance company really worth the same as 1,200 nurses?

The numbers are startling and paint a damning picture of our stewardship. We have been entrusted with the resources of our society and it is our calling to make the best use of them. If we fail in our calling, our government believes it is their calling to protect the people from us.

Choice of pathsWhat is your choice? Are you part of the problem or part of the solution? There is no middle ground. All of us have a role to play in rebuilding our ethical foundations from the ground up. Sheffert suggests the following first steps:

  • Speak up about misbehavior and wrongdoing. Martin Luther King, Jr. said that at some point “silence is betrayal.” It’s as true today as when he said it.
  • Volunteer to teach our youth about values and ethical behaviors. The transformation starts at the base. We can’t lose our next generation.
  •  Resolve excess executive pay. The fish rots from the head. Our leaders must show the way and demonstrate that they understand how to do the right things. At the same time, we must hold them accountable for their actions.
  • Lead the way to redefine success in more wholesome terms. Money and power do not need to be the key metrics.

Summit MeetingAre you ready to take a personal challenge? On November 12th, join the Minnesota Ethics Summit and become part of the movement. Contact Sara T. Paul for details at (651) 338-1302 or Touv0001@umn.edu.

It’s our time to make a difference. Join in the change!

27
Mar
10

Change and Ethics (or is it Changing Ethics?)

Change is accelerating. New technologies are changing the world and the way we interact with each other; but ethical principles remain the same. Why do we have so much trouble applying these principles?

I attended a MIMA presentation last week that discussed legal and ethical aspects of social networking. It was an interesting exploration of the questions the new platforms create. There are some new situations deserving more attention. The deleting and editing of blog comments and the use of sophisticated data mining to determine preferences are two examples. Most ethical situations in social networking are merely extensions of traditional circumstances. Honesty and transparency are key elements of any approach.

Timeless Ethics

These qualities have been around for centuries, yet speed and volume are changing the game. Information flashes through the system without friction. Good news travels fast. Bad news travels even faster. Everything is visible to a world that is increasingly connected. Speed is a critical new element that changes the game.

Volume of information also makes a huge difference in the way ethics affect our circumstances. The number of players providing content continues to explode. Around 10 million unique visitors watch the three major television networks each month. In the same time frame, the three major social networking platforms welcome over 250 million unique visitors. The volume these visitors create is staggering and leverages everything – good and bad!

In this environment, small deviations can lead to big issues. The volume and speed of information creates much more visibility for everything that happens. That visibility also creates more liability:  more exposure on items that used to be “invisible.”

All of these changes make solid ethics more and more critical. Establishing a firm ethical base allows you to be proactive in difficult situations. That base makes it easier to steer clear of unnecessary trouble and puts you in position to consistently take advantage of opportunities.

Do you have the ethical base to take advantage of these times?




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