When you hear the words “ethical culture,” what’s the first thing that comes to mind? Maybe it’s your company’s Code of Conduct or a fellow employee who exemplifies honesty and integrity. If your negativity bias is strong, you might think instead of unscrupulous companies or individuals - the likes of Enron or Bernie Madoff. Even if you can’t quite put it into words, you know the look and feel of right and wrong action. 

But for many companies, there is a glaring blind spot when it comes to ethics and organizational leadership. Ethical teams and ethical companies don’t just happen by accident. They are created in one of two ways: inadvertently or on purpose. 

There are many factors that influence people’s behavior and cause them to take ethical shortcuts. But when all relevant organizational systems are nudging people in the same direction, wrongdoing becomes much less likely. 

In this three part blog series, we will explore what it takes to intentionally cultivate an ethical workplace. (Hint: It goes far beyond punitive compliance programs.) 

The Business Case for Ethics

Ethics is commonly thought of as a personal matter. Something between an individual and his or her own conscience.  

Seeing ethics in isolation overlooks the critical role organizations plays in shaping ethical (or unethical) behavior. Ethics isn’t just about fairness, respect, honesty, and trustworthiness at the level of individuals; rather it has everything to do with leadership, management, and culture. 

Ignoring or sidestepping ethics puts a company at great risk of criminal liability, penalties and fines, and damage to reputation. On the flip side, having a strong ethical culture can further a company’s success by creating a productive and supportive work environment that taps into peoples’ personal sense of moral responsibility. Research finds that in these positive environments, employees are healthier, more engaged, and more loyal, and companies have greater customer trust and are more financially successful.

Less Bad Does Not Equal More Good

In many cases, organizations go through the back door of what they don’t want (unethical behavior), rather than going through the front door of what they do want (ethical behavior). We’ll delve deeper into this concept in Part Two of this blog series.

While the “do no harm” approach may bring a company to neutral, it will not move beyond this point so long as the framing is reactionary and compliance-based. Avoiding harm only gets you halfway to doing good.  A lack of corruption does not, on its own, lead to moral excellence. 

Here’s an example:  Imagine you’re a psychologist with a patient who suffers from severe depression. You want to help the person find happiness, but as long as you’re operating within the deficit or treatment paradigm (i.e., making him or her less depressed) your patient will only become less miserable. Your efforts to help the person become happier will be difficult, if not impossible, unless you move north of neutral. 

This fundamentally different approach focuses on an individual’s strengths, not their weaknesses, and is illustrated by the illness-wellness continuum shown in the graphic below.

The same holds true for ethics. The absence of unethical behavior does not produce ethical behavior. They are not even on the same continuum!

In the end, building an ethical culture – one that promotes exemplary behavior – may be the best way to prevent unethical conduct. In Part 3 of this blog series, we suggest ideas and tips for how to do this within your own organization. Stay tuned for more!

Categorized as: Governance