Reflections on ethical leadership

The modern leader operates in a world of conflicting interests, expectations and patterns. How does one practice the art of leadership when political and economic systems are in constant flux?

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Leadership Moral dilemas blog Norbert Biedrzycki

The times when the head of a company was the ultimate, uncontested authority are gone forever. The world in which she or he operates has become too complex, too dynamic. Instead, every day, those at the helm of organizations can expect to encounter volatile markets, demanding employees, fickle customers, impatient investors and bloggers and journalists who traffic in unrelenting skepticism. In this environment, it can be difficult for a leader to hold a steady course, guided by what he or she knows is right for the long run, as opposed to what’s expedient in the short term.  And it’s especially hard to make the quick decisions organizations need without a robust mechanism for choosing between what’s right and what’s wrong.

As the leader of a group of people, I wrestle with this. I know I have only have a very short time to sell a new idea or a business concept to my team and get its buy-in. To succeed, I must be guided by a system of values that is crystal clear, especially to me. And, most importantly, I must set an example through my actions rather than merely proclaiming a list of the organization’s values ​​in the company newsletter. I need to live the values in my own practice as I lead others.

Dollars and sense

There are some basic questions that all leaders should ask themselves and find answers for as soon as possible. The way I see it, answering such questions frees me from the dilemmas that interfere with my decision making. One of these questions concerns the extent to which charismatic leaders – those who influences others through the vitality of their personalities and the excellence of their communication skills – can allow themselves to manipulate people. While leading the charge, and inspiring people to follow, how can one remain critical of one’s own thought processes and actions and keep one’s ego in check?

Along with very personal questions like that, every leader faces business dilemmas, many of them ethical, every day. Should they cut costs (with the best interest of their companies and employees in mind) and use the cheapest available workforce without concern for the livelihoods of their subcontractors? Should they develop future technologies knowing there may be unintended and negative consequences for many people by doing so? Should they fill orders for items which they know will contribute to surveilling people? In adopting new tools that boost efficiency (automation and robotization), should they forget about those employees that will lose their jobs to robots, not to mention workers at other companies?

The market of ethical dilemmas for leaders is always growing. Whereas it is relatively easy to set KPIs (key performance indicators) that will demonstrate that an organization is operating efficiently, effectively and profitably, and meeting all its targets, it is far more challenging to determine whether the path taken to achieve these goals is morally justified. I am confident that all good leaders would agree they are engaged in a constant balancing act between what is necessary to protect their organization’s interests and what needs to be done to uphold their personal value systems. There are no KPIs to tell right from wrong. Accordingly, I believe it is a good idea to maintain a personal ethical compass, a private code of the principles and values one wishes to live by. Such a code will serve as a guideline that can be applied whenever one is confronted with moral ambiguity, allowing one to maintain both personal and organizational integrity (as the two are entwined) and steer clear of the traps laid by rapid change that can lure one into decision-making by mere expediency. Although such code of ethics will not eliminate the difficulty of decision-making, it will certainly make it easier. It will enable us reach coherent decisions based on a clear value system, allowing the organization to be consistent and base its growth on a sound, ethical foundation. The leader of such an organization can create an environment that supports its employees, appreciates them as people (thereby getting their best ideas and work), while building a brand that consumers and clients perceive as authentic, one whose aspirations go beyond merely maximizing profits. And this makes good business sense. According to a Nielsen survey of 30,000 consumers in 60 countries, a “commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. Brands that fail to take this into account will likely fall behind.”

 

Cheap ideas, apparent benefits

And speaking of good business, for years Wells Fargo was lauded for its expertise in selling innovative financial products to its customers without falling prey to some of the excesses that led to the global financial meltdown of 2007 – 2008. In relation to American banks its size, Wells Fargo survived and thrived while other similar institutions were going bankrupt or being bailed out by the federal government and U.S. taxpayers. However, this past February, the U.S. Federal Reserve hit Wells Fargo for a pattern of misbehavior including deceiving customers by opening fake accounts in their names (without their knowledge) and forcing others to purchase auto insurance policies they didn’t need. While this undoubtedly helped certain Wells Fargo managers meet their short-term revenue goals, it broke faith with their customers.

The Fed’s punishment included denying Wells Fargo the right to expand its retail business (or open new branches), or in any way add to its 2017 balance sheet. In other words, the bank’s growth was stopped dead in its tracks. (The market responded accordingly by punishing the bank’s stock.) The Fed also insisted that four directors on the bank’s 16-person board step down, charging the board as a whole – indeed, Wells Fargo’s entirely hierarchy – with lax oversight. It was a remarkable, unprecedented, and very public dressing down.

We live in a time when customer opinion, brand confidence and loyalty are invaluable – things to be built up by expending huge amounts of resources and effort – and not to be squandered by chasing short-term gains at the cost of assuming long-term reputational risk. But today’s leaders are often caught between financial objectives, spreadsheets and shareholder expectations on one hand and, on the other, empowered customers who can post their experiences on the internet, reaching millions in moments. Customers may forgive a slip-up; they will not forgive a pattern of shady dealing that shatters institutional credibility, as it has at Wells Fargo.

 

The criticality of credibility

This example highlights another problem. Increasingly, today’s leaders operate in public view. Indeed, having the media put them on a pedestal may well be an integral part of a company’s strategy. Companies want and need attention – from their investors and customers – and use multiple channels to get it, including both conventional and electronic media. Today, effective communication is worth its weight in gold. However, operating so publicly can be a double-edged sword. Customer attention spans are short.  In pursuit of advertising and ratings (they go together), the media is driven to simplify messages while looking for whatever will attract the most eyeballs. And as every journalist knows, bad news sells.

To protect the good name of an organization in this chaotic, fast-moving and hyper-competitive media environment, leaders should adhere to a clearly articulated value system that is more than a jerry-built media strategy. It is essential to be consistent and credible at all levels. PR efforts will be useless unless business partners and employees ensure that the company message is backed up by actions that reflect it: that leaders practice what they preach as they go about the day-to-day business of their organizations. Credibility in the backbone of business, and business leaders need to align their actions with the image the business projects.

 

Algorithm morality

When writing about artificial intelligence, I have repeatedly noted its great potential for good. I have often expressed my belief that technological progress, despite some immediate and unavoidable individual and social disruptions, ultimately will benefit us all. However, the artificial intelligence era will not make resolving ethical issues any simpler. Customers, citizens, people are understandably (if sometimes irrationally) anxious about new technologies. A smart home filled with electronics, battlefield drones, widely implemented facial recognition systems for crowd control, robots replacing employees, and machine-generated news all make for a world of great ethical complexity. One challenge for today’s technology leaders is make the case for progress, even when it is initially disruptive or worrisome. However, modern technological systems are not immune to prejudice and superstition.

For instance, imagine algorithms used to predict behaviors by facial image analysis. The algorithms that use such data could influence lending, legal and social decisions; in other words, algorithms could decide an individual’s future success, or lack of it. As the leader of an organization that offers technological solutions, I must bear in mind that although my programmers are unbiased, the technologies they create may fail to reflect that, or be hijacked by others and used for unethical purposes. It is the role and ethical duty of leaders to be aware of such mechanisms and ensure that their colleagues and employees are aware of them, too. This will require not rigid instruments of persuasion, but rather open debate on what is in the best interest not just of the company but also the customer and, ultimately, society at large.

 

The essential human factor

This may sound paradoxical, but as technologies get smarter the role of people in leadership gets more important. Their self-awareness, courage and ability to ask questions will become more critical to preserving the humanity of the technology we use. We live on the edge of great change, and leaders must remain open, even to criticism. Enabling the free flow of ideas, being open to discussion and debate, demonstrates respect for others and provides a guardrail that preserves the values essential to our humanness in the face of increasing automation and roboticization. Personally, I do all I can as a leader to ensure that honesty, respect for others, social engagement and openness to dialogue guides my actions.

I believe that a leadership position must be earned. One works for it by adhering to one’s principles and values. Winning a title – president, director, board member – means little, and it does not make one a leader. Living and working as an ethical, thoughtful human makes a leader, and is essential to organizational success.

 

Related articles:

– From Dictator to Partner

– Who will gain and who will lose in digital revolution?

– Can machines tell right from wrong?

Surviving in the digital age, future-proofing your business

Fall of the hierarchy. Who really rules in your company?

– A hidden social networks lurks within your company. Find it!

– Your clients are already in the future, and where are you?

 

Leave a Reply

40 comments

  1. Simon GEE

    People want to follow people who are open and honest. But that is a safe limit. Push that limit by sharing your concerns and worries, your weaknesses and your mistakes. Doing this makes you human, but doesn’t mean your team must wallow or worry. The best leaders are open and willing to grow and learn.

  2. DDonovan

    Transformation (and not transition) is an opportunity to rebuild. Start with why or your purpose, then the process (integrated digital as your backbone) and then spend lots of time on the people. Transformation is an emotional journey.

  3. Jack666

    Great impression. Thanks for sharing. I mostly agree. In case of part regarding leaders priority awareness is worthy to add that they should know mission and goals of organization. For many managers ( I mean manager = leader) is not so easy, to expressed them in communicable manner which help to recognized that goal has been achieved.
    Regarding development method preferred by leaders – I agree that push them into class room looks strange. On the other hand it depends on problem to resolve. Every method contains limitations, even coaching and – especially, on- line techniques, so we rather should search for ways appropriate to specific needs.
    Thanks

    • Tom Jonezz

      Evolution gave us the brain which has given us technologies such as flint tools, the wheel, and clothing that enabled us to extend ourselves past our biological limitations. Is an artificial eye any different? Are we any less human for using an arrow to kill a deer rather than our bare hands? Who gets to decide?

      Some critics argue that the two positions transhumanists propose, rejecting human enhancement through augmentation and implants entirely or wholeheartedly embracing everything the transhumanist movement represents is a false dichotomy.

      • Norbert Biedrzycki  

        The point I was making is that change management is useless when run by a people who a) don’t know much about technology and b) try to jam us up with red tape because it makes them look useful in their own minds. I don’t object to change management, I object to broken change management limitations.

    • TomHarber

      Leaders have long gotten away with vocally supporting policies and procedures, but their actions say otherwise. That tide will turn. With so much light being shed on unacceptable behavior in all workplaces, leaders will begin to understand they need to not only hold their teams accountable for proper behavior, but hold themselves accountable as well.

  4. ZoraBora

    This looks interesting Norbert, look forward to hearing more about it.

  5. Zidan78

    What about those darn limiting beliefs that lie dormant in the subconscious? I don’t see anything about those. Without removing them no forward motion.

  6. AndrewJo

    Well people who actually know a subject and are willing to teach what they know sure are annoying. Knowledge has a way of getting in the way of delusions and we can’t have any of that!

  7. Check Batin

    Now can we talk about what “intelligence” means? Intelligence too is a cline, not a bounded category. Every structure is intelligent in that it predicts (causes) some futures more than it predicts (causes) other futures. Now that we have a deffiniton of intelligence and one that is not domain or scale dependent, and one that is also parameterized by a gates and wires network theory of computation, we can ask practical questions such as “How does one build the most efficient and powerful intelligent…

    • Tesla29

      I had it explained to me that one of the reasons for the reluctance of companies and government to line up for policy controls is profits. This is the push and pull around making money and doing the right thing. This is the time for government and companies to do the right thing and they can feel proud stepping forward to help protect humanity.

  8. John Accural

    Once you define the foundational architecture, the bounds and limits can be formally abstracted. That is the most important aspect of any domain of science. Once you define the base as logic gates, you have accepted that the only thing that matters between those gates is discrete data channels (insulated wires for example). How those channels operate or of what they are made or what functions as data (is passed down them) or how fast or how far apart… well those become incidental factors, qualitatively…

  9. Tom299

    I really enjoyed reading your article. Your key messages resonated with me. Of all the technology initiatives to date, Digital Leadership in transformation age is absolutely the toughest. In my opinion, businesses must first understand that in Digital transformation, technology is not the end game. Disruptive technologies are business enablers. In order for an authentic and sustainable transformation to succeed, it must be a “culture-led” transformation. Thanks for sharing your thoughts.

  10. Grzegorz Wiatr

    Free flow of ideas – show me such a organisation. There is always a kind of manager/administrator who prevents

  11. TomK

    God great there are people here with the cognitive chops to have a productive conversation on this topic.

  12. TomaszK1

    Your brain is architecturally parallel. If else is a sequential concept.

    • TomCat

      Please if you don’t believe that intelligence is synonymous with prediction, please do offer a reasoned robust critique and or an alternative definition.

    • johnbuzz3

      I’m sensing you’d prefer a threshold theory, one in which intelligence is a walled territory of dynamics that starts at a particular quantity or quality of behavior. Usually when people subscribe to threshold definitions of intelligence who’s boundaries are near or equal to human measures.

      • John Accural

        With AI on hand to carry out both menial leg work and contribute to vital decision making, having a hierarchy at all could eventually become unnecessary. Many businesses have already realised that running a corporate dictatorship is not how to get the best out of their employees.

  13. Adam Spikey

    your brain could have the very same function with if else expression.

      • AdaZombie

        Yes, and all life is a pile of chemicals. Want to argue that ? Next oversimplification?

      • CaffD

        Come on, show your alternative hypothesis. Present a reasoned coherent critique that falsifies my definition of intelligence as any system of prediction.

        • CaffD

          I don’t pretend to have the answers to these questions, whatever they are. To be honest? I find what your statements pretentious and confused. I feel no need to “win the argument” 🙂

    • Mac McFisher

      Remember that all decisions are if then else. All causal interactions are the same. Every change is the result of a binary or rather, series of binary interactions. This is true no matter how complex a system or its interactions with other systems or with itself. If change is possible it’s because there are at least two possible results. The conditions that bracket such events are at this level of examination completely irrelevant.

    • SimonMcD

      Yes, and all life is a pile of chemicals. Want to argue that ? Next oversimplification?

    • Tom Jonezz

      “Now that we have a definition of intelligence” well, THAT was impressive LOL

  14. TonyHor

    Ethical leadership can also involve the management of conduct and collaboration within a team. Typically, morale is higher in the workplace when people are getting along with each other. When co-workers are working as a team, it can help build relationships in the workplace and help the overall performance of the group. Generally, strong leaders lead by example.

  15. TonyHor

    Successful ethical leaders tend to be good communicators. People communicate in different ways. Some may feel comfortable speaking in public, regardless of personnel or situation, while others may be hesitant to speak with a leader because of fear, anxiousness or simply not knowing how to articulate what they are trying to say. They might be better talking via email, rather than in person. It’s an ethical leader’s job to communicate with each member of the team, but also allow for open conversation, as some people may have questions and concerns that need addressed. It’s important for leaders to build camaraderie with their team. Quality relationships tend to be built on trust, fairness, integrity, openness, compassion and respect.

  16. JohnE3

    One role of an ethical leader is focusing on the overall importance of ethics, including ethical standards and other ethical issues, and how these factors can influence society. As an ethical leader, it’s important to teach peers about ethics, especially in cases where they are faced with an ethical issue in the workplace.

  17. DDonovan

    A noble quality of a leader is leading by example. As an ethical leader, it’s important to remember that actions often speak louder than words. People are more likely to judge someone based on how they act, rather than what they say. By practicing and demonstrating the use of ethical, honest and unselfish behavior to subordinates, ethical leaders may begin to earn the respect of their peers. People may be more likely to follow a leader who respects others and shows integrity.