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Most leaders would claim they want the utmost ethical standards upheld by those they lead. But they might be shocked to discover that, even with the best of intentions, their own leadership may be corrupting the choices of those they lead. Ethical Systems is a non-profit research organization at New York University’s Stern School of Business, founded by Business Ethics Professor Jonathan Haidt and led by Azish Filabi. They recently held a gathering of Academic and Business luminaries to discuss “Ethics by Design.” Among the many dynamic conversations was exploring the role leadership plays in unwittingly promoting ethical misconduct in organizations.
Here are four ways you need to check your leadership choices to ensure you aren’t inadvertently encouraging misconduct.
1. You are making it psychologically unsafe to speak up. Despite saying things like, “I have an open door policy,” where employees can express even controversial issues, some leadership actions may dissuade the courage needed to raise ethical concerns . Creating a culture in which people freely speak up is vital to ensuring people don’t collude with, or incite misconduct. Elizabeth Morrison, Professor in Creative Management at New York University, says in Encouraging a Speak Up Culture, “You have to confront the two fundamental challenges preventing employees from speaking up. The first is the natural feeling of futility – feeling like speaking up isn’t worth the effort or that on one wants to hear it. The second is the natural fear that speaking up will lead to retribution or harsh reactions.” A manager’s reactions to an employee’s concerns sets the tone for whether or not people will raise future issues. If a leader reacts with even the slightest bit of annoyance, they are signaling they don’t really want to hear concerns. Says Morrison, “Leaders that are open and genuinely approachable and seen as wanting input, who demonstrate regard for the opinions of others, and model ethical behavior, are far likelier to have employees speak up when circumstances require it.”
2. You are applying excessive pressure to reach unrealistic performance targets. Significant research suggests that unfettered goal setting can encourage people to make compromising choices in order to reach targets, especially if those targets seem unrealistic. Leaders may be inviting people to cheat in two ways. They will cut corners on the way they reach a goal, or they will lie when reporting how much of the goal they actually achieved. Says Lisa Ordonez, Vice Dean and Professor of Management and Organizations at the University of Arizona, “Goals have a strong effect of causing tunnel vision, narrowly focusing people at the expense of seeing much else around them, including the potential consequences of compromised choices made to reach goals.” Once people sense the risk of failure, they go into “loss prevention” mode, fearing the loss of job, status, or at-risk incentives. The Veterans Administration learned this lesson the hard way when trying to address the 115 day wait time in their Phoenix hospital. They set a new goal of reducing the wait to 14 days, which resulted in an alleged 24-day wait. But employees said they felt compelled to manipulate performance records to give the appearance of meeting these goals. As many as 40 veterans died waiting for care at the Phoenix center, some more than a year. Leaders have to make sure that those they lead have the resources, timelines, skill and support they need to achieve targets they are given, especially ambitious stretch goals.
3. You are not making ethical behavior and integrity a routine conversation. Too many leaders assume that talking about ethics is something you do when there’s been a scandal, or as part of an organization’s compliance program. Everyone gets their “ethics flu shot” once a year by going through the mandatory review of the compliance policy , and all is well for another year. Nick Eply, Professor of Behavioral Science at the University of Chicago, says in Four Myths about Morality and Business, “It’s a myth to think, ‘Everyone is different and everything is relative.’ You actually have to teach people the relative value of principles relative to choices.” Leaders have to infuse everyday activities with ethical considerations and design policies and norms that keep ethics top of mind. And Haidt adds, “It’s important to also talk about the positive examples of ethical behavior, not just the bad ones. Focusing on the positive reasons you are in business, and reinforcing the good things people do strengthens ethical choices as ‘the norm’ of the organization.”
4. You are not setting the example. Leaders must accept they are held to higher ethical standards than others . It’s presumed they are role models of the organization’s published and implied standards. If you are leading in a “do as I say, not as I do” way, expect others will resent the double standard and find a way to extract their pound of flesh. Marc Hodak, Adjunct Professor at NYU and Founder of Hodak Value Advisors, says, “The closer you are to the top, the more ethical you believe things are.” People are naturally predisposed to think their ethics and integrity are beyond reproach. The truth is, in an environment where leaders are distrusted until proven trustworthy, leaders must be extra vigilant about not just their intentions, but how it is others might interpret their behavior. While they can’t control every possible misinterpretation of their words or actions, leaders who know their people well make careful choices in how they react to stressful situations, how they confront poor performance, how politic they are in the face of controversy, and how receptive they are to bad news.
Above all, even in what might be considered the smallest “white lie,” ethical leaders are careful not to signal that hypocrisy is OK. As an example, a leader may casually review an employee’s presentation and provide feedback like, “I think we need to take these two slides out – that data is inflammatory and we don’t want to derail the ultimate outcome which is to convince the budget committee to give us the resources we want.” While the leader might presume he has acted in the best interest of the group – going to bat for resources they need- the person building the presentation has just been told, “We can’t tell the entire truth because it could prevent us from getting what we want.” Leaders must put themselves in the shoes of those they lead and look back at their actions to see what unintended messages they may be sending.
Leaders who don’t want to find themselves or their company on the front page from a scandal that may have started under their leadership must scrutinize leadership actions to far greater degrees than they may have realized. The good news is that when followers believe leaders are genuinely open to hearing even the most difficult news, they bring their best ideas and vital feedback that takes the team to greater levels of performance.
