“In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you.” — Warren Buffet, CEO, Berkshire Hathaway

It hasn’t been a good week for convincing the public of morality within business. With Sports Direct, BHS and other fraud cases in the press, one might gain the impression that all business leaders are evil monsters. But of course that isn’t the case. As in any other field there are some leaders who are greedy, callous and thoughtless but there are some bad apples in every sector. One bad doctor, such as Dr Harold Shipman, does not signify that all doctors are bad any more than one greedy banker means that all bankers are greedy. This is erroneous and irrational thinking.

But of course the problem is that you don’t hear about those organisations that are behaving ethically and paying their taxes, as this is not news. There is a trend by the media and the mob to consider that if you are in business you are a cut-throat person who cares only about money and will, if you deem it necessary, treat your employees harshly and do anything for profit. Certainly some people behave badly but it is important not to generalise.

However, business owners and leaders do need to do more to put their houses in order and communicate what they are doing to ensure ethical practice within their organisations. Senior managers have to make difficult moral decisions. They have to be honest about their ability to provide a service, whether to make one member of staff redundant in order to be able to save other jobs, try to manage market dips, consider whether to close some stores in order to save others, take a risk and invest in diversification or taking on new expertise without certainty of success, manage staff contracts. As was clear in the case of Sports Direct, the company had developed a seemingly exploitative culture, adopting practices that were, in the founder Mike Ashley’s own words, not fair.  It seems that the company had grown so fast that he had become detached from everyday systems and was not taking the time to analyse whether these were ethical.

At a conference last week Professor Lennart Levi described an initiative to train young adults in Sweden in the area of Critical Ethical Thinking with the aim to increase ethical competency in those entering the workplace. In a world where young people are often receiving less moral guidance in education than in previous years, organisations would surely benefit from helping new recruits to develop the reflective skills to enable them to address complex business decisions from an ethical perspective

A Grammar for civilised organisational life

Ethical thinking needs to become a habit of mind within business so that leaders and managers make values-based decisions rather than decisions based solely on short-term profit or targets. This requires an individual to learn how to step back and ask “what is the right thing to do here” rather than what is the expedient thing to do. If individuals have not been taught these skills in their schools or homes, then it does not necessarily come naturally but it can be learnt. But that doesn’t mean senior managers paying lip service to values or sticking a poster in the elevator or on mouse mats issued to employees: it is about role-modelling everyday behaviours.

Many professional bodies, especially in the financial world, already have strict codes of conduct by which employees are expected to abide. These relate to money laundering, insider trading and bribes and are specific as to how much client entertaining a member of staff can accept before there is a hint of corruption. There are annual review sessions so as to integrate the thinking required to shape responses to everyday situations. There are also legal consequences for Directors who do not achieve good governance or who wrongfully or fraudulently trade. But alongside the regulations there are grey areas such as what you might get away with – for example in terms of where you legally pay tax – versus what might be considered moral.

Some time ago a colleague, Bruce Abrahams, and I started to write a book on manners and ethics in the 21st century. We based the book on the principles of The Penney Idea. These represented the statement of mission and values of the J C Penney company, adopted in 1913. The aim was to provide a moral framework for business and I list these below:

  • Delivering Satisfaction: To serve the public
  • Making Fair Profits: To Expect for the service we render a fair remuneration and not all the profit the traffic will bear
  • Delivering Value for Money: To do all in our power to pack the customer’s dollar full of value, quality and satisfaction
  • Creating Intelligent Performance: To continue to train ourselves and our associates so the service we give will be more and more intelligently performed
  • Getting the best out of people: To improve constantly the human factor in our business
  • Sharing Profits is Profitable: To reward men and women in our organisation through participation in what the business produces
  • Doing the Right Thing Right: To test our every policy, method and act in this wise: ‘Does it square with what is right and just?’

These represent guiding principles for a way of doing business – not stripping the business of more than is required, ensuring that you provide a decent service or product for a reasonable price, taking care of staff and customers and sharing success. The organisational culture needs to support these values-based practices. Leaders don’t have to be “Father Christmas” but surely do need to treat everyone, staff, customers and stakeholders, with respect and humanity.

Of course people will make mistakes and perspectives will differ – there’s no imposition of a rigid moral regime as problems can be extremely complex and people take different views. But the key would be that the focus of thinking would be to endeavour to find a wise solution. In my experience of working within business over the last 26 years it is easy to find people who are very clever, with MBAs and professional qualifications, but cleverness does not always equate to wisdom.

Global Network organisations

Developing ethical competence

“He is not wise to me who is wise in words only, but he who is wise in deeds.” — St. Gregory

The development of ethical competence is surely more essential now than at any other time in organisational history as in today’s global network environments many more individuals make decisions that impact the business and its reputation than was the case within the past hierarchical model. Each person therefore needs to be taught the habit of mind to stop and consider problems through a moral lens.

So how do we in the UK ensure young people enter the workplace with the skill of making ethical decisions based on morals? Professor Iordanis Kavathatzopolous at Uppsala University, Sweden, argues that our automatic response to solving a problem is an emotional reaction. It can also be an unquestioning obedience to a specific set of guidelines or an authority figure. He explains that to be critical, self-critical, systematic or dialectic is not something most people do easily but they have to learn through training programmes to philosophize, by questioning beliefs and responses critically through Socratic dialogue. The result is twofold: the disciplined overcoming of attachments to beliefs so as to challenge automatic behaviours plus a willingness to analyse intuitive messages. The combination to reflect on head and heart, reason and intuition is more likely – but not guaranteed, as humans are fallible – to encapsulate some wisdom.

“Integrity is doing the right thing even when no one is watching” – C S Lewis

The majority of people I have encountered in the business world have been principled individuals doing their best. Like anyone else they get things wrong and external developments can blind them to the changes they need to make. Organisations are hugely complex systems in a global environment and the reality is that we are all finding our way through constantly shifting situations. But one or two buccaneer capitalists do not make business wholly bad.

I do believe that initiating programmes to provide employees with a system of methods that guide them to take ethics into consideration could transform behaviours and enable individuals to take decisions within a moral framework.  At the same time, talking about what is going well could go some way to stopping the constantly negative rhetoric about capitalism, management and business.

 

Helen-Whitten-1Helen Whitten is founder of Positiveworks, a training and coaching consultancy that is now part of Sixth Sense Consulting www.sixthsenseconsulting.co.uk . She is a Fellow of the International Stress Management Association and an accredited coach with the Association for Coaching. She has written five books on personal and professional development Cognitive-Behavioural Coaching Techniques for Dummies, Emotional Healing for Dummies with Dr David Beales, Your Mind at Work, Developing Self Knowledge for Business Success with Richard Israel and Cliff Shaffran, Future Directions, Developing Confidence and Emotional Intelligence in Young People with Diane Carrington and Age Matters, Employing and Motivating the Older Workforce with Keren Smedley. She has recently published her first collection of poetry The Alchemist’s Box. Her blog Thinking Aloud can be found on www.helenwhitten.com [email protected]