Barclays, Google, Volkswagen, Tesco and Uber.
No, it’s not a consortium of global companies poised to launch a new ‘ride & shop’ hailing app.
These seemingly unrelated companies have something much less innocent in common. Any guesses?
Here’s a clue - what two words strike fear into even the most hardened of business leaders whilst helping the public relations industry thrive?
If you guessed corporate scandal, give yourself a pat on the back!
All five companies mentioned above have made global headlines in recent years for bad behaviour. Behaviour resulting in emotional apologies, involuntary resignations and enormous fines. Not to mention the significant negative impact on financial performance, brand value and employee morale.
They are not alone, and we are not trying to single any one out.
The long list of companies mired in scandals does not reflect well on the state of ethics in business. It also underscores the need for a serious discussion about ethics in any form of “leadership learning.”
Putting Behavior Before Brand
A permanent fixture of our core curriculum is our take on business ethics. We call the session: Behaviour Before Brand. It offers a platform for participants to share, listen and explore (rather than be told) how to think about the essence of ethical leadership.
This exploration inevitably results in asking some hard questions:
- Do we need to redefine business objectives?
- Are obligations to stakeholders secondary to shareholders?
- Does responsibility to society extend beyond laws and regulations?
- Are the values of business different from those of other human activity?
Brilliant Shades of Grey
Over the past decade, we’ve challenged leaders from dozens of countries and companies and hundreds of local teams to think critically about ethics in global business and to consider different interpretations.
A highlight is when participants from very different backgrounds step into the role of a management team faced with a particular ethical dilemma. They analyse, debate and seek consensus, often elusive. They then present their solution or the outcomes from their discussion for resolving the issue to the wider group.
Unsurprisingly, given the diversity of these cohorts, it often proves impossible to reach consensus. Final decisions are almost never unanimous. Perceptions of “Right” or “Wrong” differ based on one’s background, culture, worldview and function within their organisation.
Individuals working for the same company, serving the same brand, and supposedly following the same corporate code of conduct, often have divergent views.
Sample scenarios follow below.
Remember, in the exercise participants are acting as a management team and thus the buck stops with them. Sitting on the fence is not an option!
You are negotiating an order from an overseas customer. He says that he is prepared to place more orders in the future but he wants a significant discount and exclusive dealership in his country.
In stating so, he suggests that he has a family member who is looking for a job, and requests a meeting in a holiday resort with his family.
What do you do?
Those in Sales will broadly agree that the first part of the scenario is quite innocuous. Negotiations around discounts and distribution rights are part and parcel of doing business and shouldn’t be cause for alarm (unless you are a bad negotiator!)
The second and third elements however – the customer’s relative looking for a job and the request for a meeting in a holiday resort – yield very different opinions on what is acceptable behaviour.
For some (usually western-based executives) it couldn’t be simpler:
- Politely suggest the customer’s relative apply through the company website, assuring him if they are qualified they will be given a fair look.
- Flatly refuse the request for a family junket, making it clear that would be against company policy.
- Proceed to explain that as a firm based in country X one is held to the high ethical standards of that country.
- Although cocktails on the beach sounds fantastic, your hands are unfortunately tied.
For others, especially those working in Asia (even for western MNCs) things are not so black and white. When personal and professional relationships are regarded as one and the same your well-meaning colleague’s approach may be construed as disrespectful at best. It could indeed even damage your reputation and lose the company other customers. One has to tread carefully to strike a balance between keeping the customer satisfied and not breaking company policies (or the law!).
Perhaps the most extreme example of this was when one young executive whose company and nationality shall remain unnamed, devised an elaborate plan to keep everybody (even the compliance manager at HQ) happy. Details aside, it involved a multi-day “family festival” for employees, suppliers and customers hosted by the company at a local beach resort. It just so happened that the only family who showed up was the customer in question and during the festivities his job-hunting relative was able to meet one or two company managers who were hiring - wasn’t that lucky!
You have just hired an executive from a rival company.
Your company is in the process of an important government tender and the new executive tells you that he has knowledge of your competitor’s bid details which could give you a key advantage.
What would you do?
When discussing this scenario responses range from “Why else would we have hired the guy in the first place?!” at one end of the spectrum, to “It’s only a matter of time before he does the same thing to us. Fire him!” at the other.
Those who prefer the middle way might suggest thanking the new hire for the offer but “ring-fencing” him so that he has no contact with those involved in the bid. Or asking him not to cross the line into unethical behaviour by only sharing the information he deems not too sensitive!
And there are always those for whom the bottom line trumps all. An honest participant once said: “Ethics go out the window” when a deal is on the line. Furthermore, and rather worryingly, he said that was understood throughout the chain of command, regardless of company policy.
What many overlook in this particular case is that in a government tender even a whiff of foul play can result in the whole bidding process being restarted, with all parties incurring major losses of time and money.
Do you exhibit dangerous behaviour?
Empathy and Ethical Leadership
Is it logical to assume that a decades-old company code of ethical conduct written in Europe or the US can be imported into markets like India or Indonesia, where cultural norms and concepts of right and wrong have been forged over thousands of years?
In an era of unprecedented globalisation how are leaders to cultivate a more intimate awareness of the cultural connotations that impact business ethics?
This is not to suggest that individuals or companies should compromise the values they hold most dear. Instead the development of ethical guidelines should be an inclusive process. Leaders should seek inputs from the different markets where their company operates and contemplate them openly and honestly.
Such a process can yield a greater appreciation of the myriad interpretations of what constitutes acceptable behaviour in business. It may just generate greater empathy for others who look, think and act differently.
Indeed, this is perhaps the greatest and most under-appreciated value.
Contact us to learn more about this session and our full range of executive education programmes.