Culture reinforces ethical behavior

Compass Pointing the Way to Integrity in BusinessA recent guest column in the Washington Post titled “Can you teach businessmen to be ethical?” caught my attention this morning. It’s worth reading what the author, Jonathan Haidt, a professor at New York University Stern School of Business, has to say about teaching ethics in business school.

Haidt writes: “But after much searching, I have yet to find any evidence that a single ethics class, on its own, can improve ethical behavior after the course has ended. So what more can be done?”

My experience tells me that ethics is not a business school issue. It is a corporate governance and company culture issue. And what his article got me thinking about was: “How do we reinforce ethical behavior in our organizations?”  

Assuming, of course, that we believe ethical behavior does really matter — and I do. Productivity, excellence and value ultimately derive from trust, and that trust is built on the confidence that those with whom and for whom we work “will do the right thing.” (If you haven’t yet done so, I recommend you read Stephen M. R. Covey’s The Speed of Trust. It’s a required reading assignment for executives who choose to work with me.)

Ethical behavior in our organizations comes from the top: the CEO and the board set the expectations. But, simply publishing a Code of Conduct or Core Values statement is not going to make it happen. Ethical behavior comes from demonstrating that behavior, from having executives who walk-it every day, from demonstrating it every time a decision is made. People always watch what we do, not just what we say.

In one company in which I worked, the standard was very simple: “We will do the right thing.” What did that mean? As the long-term CEO described it: “When I make a decision, or when this company makes a decision, and that decision appears in an article of the front page of the local newspaper, I want my mother to be proud of what we have done.” Is that too simplistic? I don’t think so. For this company, that worked. It worked because 1) the CEO and the executive team modeled the behavior and 2) people who didn’t model the behavior were quickly invited to leave.

For this company, part of “We will do the right thing” also meant that “We will do what we say.” This quickly became very real for me as a young aspiring manager when I told an employee in the course of a merger integration that I would do something the employee had asked. As I went about trying to accomplish this something, I was told by my boss that the “something” did not fit within company policy. When I said I’d go back and tell the employee that I was mistaken and we couldn’t do what I’d promised, I was pulled up quickly by my boss. Once she understood that I’d already told the employee we’d do it, there was no further conversation needed. We would do it because I’d told the employee we would do it: “We will do what we say.” Even though I was wrong to have made the commitment without checking first, I’d made it and the company would honor what I’d said we’d do. To me, that was an important, if somewhat embarrassing-to-me, lesson about my company’s ethical standards. This company walked the talk.

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