Ethical Leadership

We've seen some high profile ethical failures hit the headlines in recent times – the Volkswagen emissions scandal and the controversies surrounding rideshare giant Uber spring to mind.

These, and other, examples show what can happen when people at the top of an organization make poor ethical choices, and end up in the news or in the courts.

There are, however, many other leaders who "raise the bar," and inspire their teams to do the same.

These ethical leaders do the right thing, at the right time, for the right reasons. They put their ethics before the bottom line – and research shows that this makes it more likely their teams will be loyal, dedicated and ethical, in return.

In this article, we'll explore how you, too, can raise the bar for yourself, your team, and your organization.

What Causes Ethical Failures?

Before looking at how to be an ethical leader, it is useful to consider what might lead you to an ethical failure.

Author and ethical leadership expert Linda Fisher Thornton points to a number of connected factors that can lead to ethical failures by individual leaders and by organizations.

Individual causes include ignoring boundaries such as organizational values or industry codes, following the crowd ("everyone else is doing it, so why not me?"), and lack of self-control.

Organizational causes include lack of positive role models, lack of codified standards of behavior and training, and lack of accountability.

You can explore more reasons behind organizations' unethical behavior, with our article, Jennings' Seven Signs of Ethical Collapse   .

How to Be an Ethical Leader

Now, let's walk through six steps you can take to define ethical standards, and to start putting those high standards into practice.

1. Define Your Organization's Values

Your people likely look to you, as their manager or leader, to set an example in ethical leadership. But to do this, you first need to know your organization's values   , so that you can embody them in your day-to-day business.

Machinery manufacturer Deere & Co., for example, was recognized in 2018 as one of most ethical companies in the world. Why? Because it is committed to upholding the highest standards of honor and integrity, and because everyone from the C-suite to the shop floor does business in alignment with Deere's core values.

Hopefully, like Deere, your company has clear rules about the behavior it expects of its people. These rules usually flow from the organization's mission and vision statements   .

You need to communicate these rules clearly to your team members. When people understand why ethical behavior matters, they will more likely behave accordingly. Our article, Why the Rules Are There   , can help you with this.

2. Know Your Personal Values

Good leaders follow their personal values   as well as their organizational values.

To see if that's the case for you, ask yourself these questions:

• What standards of behavior are really important to my company?
• What specific values do I admire in certain leaders? Do I identify with those values?
• Would I still live by those values, even if they put me at a competitive disadvantage?

3. Set the Tone

When you're sure of your organizational and personal values, you can begin to create the right environment for your team and your organization.

Again, being a good role model   is the best way to do this. People will model their behavior on yours and they will, in turn, set an example for others to follow. The "ripple effect" can be wide reaching.

If, for example, your company values honesty above all else, then be sure to demonstrate it by being transparent with everyone around you. And if your company values free speech, make a point of allowing your team members to openly communicate their ideas.

Next, be sure that your people know the consequences of behavior that doesn't live up to your corporate values, or which breaks the rules on ethical behavior. These consequences don't have to be punitive, but they should remind people of the standards of behavior that you expect of them.

Positive consequences are important, too. Consider rewarding team members who consistently act according to the company values. Even a simple "thank you" note will likely be appreciated. And sharing examples of team members who did the right thing in challenging situations can reinforce and communicate values powerfully. You can find out how to create such "positive narratives" in our article, here   .

4. Recognize Ethical Dilemmas

Imagine this scenario: you're in a meeting with other top executives, and one of your colleagues is grossly exaggerating his team's performance. Instead of saying that its project will increase company earnings by 4 percent, as he told you, he's promising a 12 percent increase.

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What would you do? He's a close colleague and a personal friend, but, on the other hand, he's being dishonest. Should you support him, or tell the truth to the other executives?

We're often faced with tough choices in the workplace, but most ethical dilemmas aren't this obvious. So, how do you recognize them?

• Identify "trigger" situations. Certain situations, such as purchasing, hiring, firing, promoting, and calculating bonuses, seem to attract ethical dilemmas, so be wary when you're involved.

  And a threat to your image or income could skew your judgment. What if you make a mistake, for example – will you admit to it or try to cover it up?

  By recognizing when ethical dilemmas are most likely to occur, you can be more attuned to the risk.

• Listen to your "inner voice." Your conscience likely tells you when something isn't right, creating a feeling of uneasiness. If a situation makes you uncomfortable, or goes against one of your core values or beliefs, stop and think things through rationally before proceeding.

5. Deal With Ethical Dilemmas

Recognizing ethical dilemmas is one thing. But, often, deciding what to do about them is quite another. And even when you know what you ought to do, actually doing it can be very difficult.

There are several ways to respond to an ethical dilemma:

• Prepare in advance. Visualizing theoretical scenarios can help you to work through your feelings and to decide what to do in reality. In a crisis, you may only have seconds to reach a decision, so rehearsing can be a great help.
  
  What would you do, for example, if you knew that a colleague was about to be fired, but you weren't legally allowed to tell him? How would you choose to act?

  You can also conduct this exercise with your team members, to help them to recognize and prepare for ethical dilemmas of their own.

• Weigh up the evidence. In the example of your colleague presenting different information to executives than he gave to you, is there a chance that the figures changed legitimately?

  Wherever possible, take the time to investigate and assess whether someone has behaved unethically, before taking action.

• Reevaluate your decision before you act. If you're in a difficult situation and you're unsure what to do, try out making a decision   . But, before you act on it, ask yourself how you would feel if your actions were made public. Would you be proud of what you did? If not, reconsider your decision.
• Get advice. Getting input from others can help you to assess a situation more rationally, and lead to a better-quality decision. After all, even the most senior leaders take advice in difficult situations. Just be sure to avoid Groupthink   .

6. Be Courageous

Sometimes, you'll act on a decision but wonder if you did the right thing. And even when you're certain that you were right, there can still be unpleasant consequences.

Consider, for example, the leader who informs an auditor about "irregular" accounting in her firm. She knows that she's been honest and correct, but the upsetting result may be that friends and colleagues lose their jobs.

So, you might be uncomfortable at times as an ethical leader, but these situations can teach you to trust yourself and your instincts. If you calm your anxiety and look logically at the situation, your instincts will often guide you in the right direction.