Creating and Leading Ethical Organizations

One can hardly pick up a newspaper or flick on the television without quickly learning about some new ethics breach in corporate America. The damage to a company’s reputation, employees and bottom line can be huge. Executives at The Boeing Company have recently experienced the collective potential affects of its various major scandals. Unethical practices have led to billions of dollars in lost defense contracts, lawsuits by competitors and potential indictments by U.S. attorneys on both coasts. In a recent speech to the company’s executives, Doug Bain, Boeing’s general counsel painted a bleak picture, “There are some within the prosecutor’s office that believe we are rotten to the core. The bottom line is we just cannot stand another major scandal. And all it takes for there to be a next time is one misstep by one employee, and it doesn’t really matter whether that employee is a rank-and-file person or somebody in this room.”

Every company faces the same potential damage and challenge that Boeing faces.  How does a company ensure it doesn’t appear as ugly front page news over some ethical issue? The answer lies, as Doug Bain pointed out, with the company’s employees, all of them. For you see corporate entities do not violate ethical and legal standards, its people do. With that thought in mind the following information provides specific actions that company leaders can take to help ensure they and their employees remain on solid ethical ground.

Review The "Rules of The Road."

Don't assume that employees know all the laws, rules and procedures that pertain to their jobs. MAKE SURE they know them! Give each person copies of all relevant guidelines, and review the information with them. And be sure to update your people, yourself and your guidelines as new information becomes available. Eliminate "ignorance of the rules" and you'll minimize the chances of - and excuses for - unethical actions.

Accept A Few Wrong Turns.
Let people know that mistakes can be made and careers can be built in spite of them - as long as the errors are infrequent, unintentional and low in negative impact. When fear of failure is minimized, employees become less likely to engage in "cover-up" activities, which can lead to serious ethical problems.

Establish Core Values.
Involve your work group in identifying core values that everyone can commit to, such as: "Honoring all commitments." "Respecting others' time." "Helping each other be successful." Write them down and give everyone a copy. Use them to guide and evaluate decisions and behaviors.

Ensure Employee Competency.
One of the indicators of an ethical organization is highly competent employee job performance - which equates to quality products and services. And, as a leader, you play a big role in making all of those happen. You must provide the four elements that each employee needs to perform at his or her best:

• Knowledge of job duties, requirements, and expectations.
• Information (ongoing) about your organization, your customers, your products and services, and your industry.
• Skills necessary to perform all aspects of the job.
• Support from management required to get the job done.

Talk It Up!
Keep ethics "in front of people" by making it a regular topic of conversation. Add something about ethics (e.g., discuss an article you read in a magazine or newspaper, share a "best practice" from your organization), to the agenda of each staff meeting that you conduct. And periodically check your pulse by asking "How are we doing" and soliciting ideas on what the team can do more of, do less of, and do differently to make business ethics a way of life.

Teach With "What If's."
Use hypothetical situations to address the "gray areas" that employees may sometimes face. Create scenarios that have no obvious right responses, discuss them with your people, and work together to identify the best courses of action. Need help coming up with realistic "what if's?" Ask your employees!

Provide "Places To Go."
Make sure there are people within your organization to whom employees can turn for guidance and help with ethical issues and for reporting suspected ethics violations. Look to establish alternative resources (more than just YOU) that employees trust and will use whenever the need is felt. And make sure everyone knows what assistance is available - and how to access it.

Make It SAFE To Be Ethical.
Make sure that employees face no negative consequences for doing what they feel is right, for questioning the decisions and actions of others (including yours), and for reporting suspected ethics violations. You may not always agree with people after all the facts are weighed, but no one should be afraid to surface concerns they perceive as legitimate.

Watch What You Measure.
Employees tend to judge what's truly important by looking at what is monitored and measured, and what isn't. If you only track quantity, quality will be viewed as secondary; pay attention mostly to sales, and service will drop in priority. Take a moment to examine your "scorecards." Are you collecting data on all the things you say are important, or are you just targeting the bottom line - and sending mixed messages?

Celebrate Integrity.
Look for every way possible to make a big deal out of performing with honor and integrity. Publicize positive behaviors and results. Have parties. Put up banners. Create recognition certificates and special awards. Establish a "Wall of Fame" bulletin board. Establish a "Heroes Club." Get creative.

Include Ethics In Your Selection Processes.
Only hire and promote people who have demonstrated a commitment to business ethics. Make it known that to work and advance here, you've got to perform with the highest integrity.

Pick Your Partners Carefully.
Work only with vendors and suppliers who share your commitment to ethical business practices. These people are your partners; they are extensions of your business. The way they operate can have a spillover affect on your people, your overall effectiveness, and your reputation.

Get Out and See What's Going On.
Stay aware of what's happening in your organization by wandering around, observing, and visiting with your employees and customers. If you have an office or designated work area, schedule time away from it on a regular basis. Keep up with what your people are working on, the problems they're facing, and the behaviors they're exhibiting. If you keep your eyes and ears open for ethics-related activities, you'll eliminate most "I had no idea that was happening" negative surprises.

Take Immediate Action.
Respond quickly and thoroughly to all unethical behaviors you see or hear about. Take immediate steps to stop any inappropriate activity and correct the situation. Then, conduct an investigation - collecting all the facts. Finally, deal with the offender(s) according to your organizational procedures and guidelines. Demonstrate by your actions that you have zero tolerance for ethics violations.

Be A Student Of Ethical Leadership.
Commit to ongoing self-development. Keep up with values-based management techniques by reading books, watching and listening to tapes, attending workshops, scanning the internet, and "picking the brain" of a trusted mentor. Remember that the ethical make-up of your organization is comprised of many factors - including how employees are treated, managed, and led.

Here is one more way to be ethical in your life. It is one of the most important if you are a leader in your company or business:

Set The Ethical Example.
The ultimate leadership responsibility is modeling the behaviors you expect from others. To a large degree, you operate in a fishbowl. Employees are constantly watching you and learning from you. They rightfully assume that it's okay to do whatever you do. Regardless of what's written or said elsewhere in the organization, your behavior is the performance standard employee's will follow. That's an awesome "comes with the territory" responsibility. But it's also an awesome opportunity to influence the ethics of your work unit and the entire organization.

10 Reasons Why Leaders Should Model Ethical Behavior:

• Reduces pressure on employees to compromise ethical standards.
• Increases employee willingness to report misconduct.
• Improves trust and respect at all levels.
• Protects the positive reputation of the organization.
• Encourages early detection of problem areas and ethics violations.
• Fosters a positive work culture and improved customer service.
• Provides an incentive and framework for ethical decision making.
• Increases pride, professionalism, and productivity.
• Enhances your ability to attract and retain high-quality employees.
• It helps ensure the long-term viability of the enterprise.

 Bonus reason ... It is purely and simply the right thing to do!

Adapted from More Guides to Acting Ethically, George S. May Company