CIO Leadership, IT Performance

Seven Questions for Examining the Ethics of a Business Decision

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“Ethics is knowing the difference between what you have a right to do and what is right to do.” – Potter Stewart

 

One of the things I quickly learned as I advanced in my career was that the higher I climbed, the more complex the decisions I was asked to make became.  Sometimes the potential financial implications of the decision necessitated my involvement, but frequently the decisions that came to me did so because the issues were not “black and white” but were instead shades of grey.  If you have hired good people and delegated responsibly, the easy decisions will get made at lower levels.  The ones that come to you will be the ones with many complex issues.  In fact, sometimes it seems that there is no one “right” decision but a choice between several ones, each with both upside and downside potential.  The issues frequently contain many variables.  Some are technical, some financial, and many, if not most, will have at least some ethical components.  

Over the years I have compiled a list of seven questions that can be asked to assess the ethical implications of a business (or personal for that matter) decision.  I found that it is important not only to use these but, as a leader, to both model and teach these to those who worked for me and with me.  Here they are.

1. Have you defined the problem or issue accurately?  All too often our egos prevent us from asking the “dumb” or obvious questions.  We assume that we already understand all of the issues when in fact we really don’t.  Ask plenty of clarifying questions to make sure that you really understand all of the facts and issues as well as possible.  Play back your understanding to the folks closest to the issues to make sure that you have it right. Making the right decision about the wrong thing can lead to disaster. 

2. Would you view the situation differently if the roles were reversed? Put yourself in the other party’s place and ask how you would feel and react of you were in their place.  Would you be angry, defensive or feel cheated?  If so, rethink your position.  Applying the “Golden Rule” can be an effective test for the fairness of your actions.

3. Could your decision or action harm or damage anyone in any way? In some industries a wrong or negligent decision can literally inflict bodily harm.  In other situations the harm could be financial or reputational. Will anyone or any institution or organization be harmed by the consequences of your decision? Never forget that when it comes to “grey area” decisions, the law of unintended consequences looms large.

4. Will your decision stand the test of time? How will your decision look a month from now or a year from now?  We are frequently pressured to make decisions and take actions designed to mitigate an immediate situation without thought to the long-term consequences.  Don’t trade short-term gain for long-term pain.

5. Are you violating your conscience or personal values in any way? This may sound obvious but it can be easy to separate our personal values from business priorities in the heat of the moment.  Take a minute to pause and examine what you are deciding in light of who you are and what you value.  Never violate your conscience. If you do, your conscience will not let you forget it!

6. How would the decision look as a news headline? This question isn’t about pragmatism, it is about context.  Pragmatism says do what is most expedient and a good headline is certainly expedient.  Context is about how the decision could be viewed from various perspectives.  News headlines are frequently sensational and highlight some aspect of the story, frequently a minor one, that is designed to seduce the reader into reading the story in full. In the context of a business decision the question is,  “How can this decision be interpreted and in what ways can it be misinterpreted?” Understanding the various ways the decision and subsequent actions could be misinterpreted, either accidently or intentionally, will help you to further understand the potential outcomes and to prepare for them in advance if necessary.

7. Would you tell your mother? Those who have worked for me over the years are familiar with what I call the “Momma Test,” momma, of course, being a common southern term for mother. The momma test has two parts. First, can you explain the issue clearly and succinctly enough so that your mother, who we assume isn’t intimately familiar with the details of your line of work, could easily understand it. It has been my experience that if you can’t explain something clearly and concisely to someone who isn’t familiar with the subject then you really don’t understand it yourself. The second part is,  “Would you tell her?” If you wouldn’t then you probably are ashamed of the action you are taking which should immediately tell you to stop, rethink, and take another path.

Making tough decisions is one of the most important roles a leader is asked to play. Most of the good decisions you make will pass unnoticed, but the bad ones usually do not. We will all make decisions from time to time that don’t work out well.  This is to be expected.  We learn from failure and move on.  Ethical mistakes, however, are different.  These damage or even destroy our reputations and the reputations of our organization and may harm innocent people.  Pausing to carefully assess the ethical consequences of decisions can save a lot of pain later on. 

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Discussion
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pcalento
Paul Calento 256 Points | Wed, 08/22/2012 - 21:51

Corporate values and the role of personal integrity have been downplayed for too long. I roll my eyes whenever I hear someone say "its just business". Good decisions aren't always popular.

Even companies with sound and well-defined company cultures are prone to a potential loss of values, especially when a downturn depletes a team which historically operated a certain way.

Key to changing the tides ... and ethical decision making ... is rewarding or at least respecting the hard decisions. One place to start is what you described in January as "leading when you are not in control."

--Paul Calento

(note: I work on projects sponsored by EnterpriseCIOForum.com and HP)

 

jdobbs
Joel Dobbs 322 Points | Thu, 08/23/2012 - 13:03

So true Paul.  Martin Luther King Jr once said, “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” 

 

Joel

adelineylin
adelineylin adelineylin 1 Point | Wed, 08/15/2012 - 05:41

I'm here to network, advise and gain contacts and friends. Thanks for hearing me out.

myles.suer
Myles Suer 138 Points | Tue, 08/14/2012 - 15:20

Sorry about that,

 

I should have written John. I could not find a way to edit this.

 

Myles

myles.suer
Myles Suer 138 Points | Tue, 08/14/2012 - 15:18

Joel,

I guess what I am saying is that we ask lots of questions in the interview process. Why don't we try and get a sense of the person also from an enthical perspective? And as important why don't we train people on our company's ethical values--we do at HP. At WorkersCount, they recently asked their users about whether their company lives by its ethical standards. 75% said their companies frequently do. But 17% said their company rarely do. It has been suggested that professions including business professions develop codes of conduct. I am just worried there is another Enron buried in that 17% that responded rarely.

 

myles.suer
Myles Suer 138 Points | Mon, 08/13/2012 - 21:18

Joel,

Great response. I would add that it is important to have what I call a culture of ethics--think of the J&J credo. This includes no penalty for asking and reporting. And lastly is hiring the right people. We spend too little time inspecting people's values before hiring.

 

jdodge
John Dodge 1387 Points | Tue, 08/14/2012 - 01:16

It depends what you mean by "....inspecting people's values." Values can be all over the map and get into some pretty personal things. I guess I'd say values that directly contribute to the mission would be relevant. 

I always tried to hire the most qualified reporters when I was an editor, but that might have been naive. I hired some emminently qualified people who failed. Assuming all your hires are ethical is a mistake. I was surprised on several occasions.

You need people who fit well into the team and embrace ethos, ones who understand the mission and have fire in their belly to accomplish it and grow.   

jdobbs
Joel Dobbs 322 Points | Tue, 08/14/2012 - 22:48

We did something in an organization I worked for several years ago to attempt to link our values to hiring, evaluations and promotions.  We developed a set of values for the organization (an IT organization).  The values were:

Business Partnership

Customer Service Orientation

Leadership

Open Communication

Teamwork, and

Technical Excellence

We worked with a small consulting firm (which was later acquired by Gartner) to develop competencies for each of these.   We then developed a set of interview questions to assist in testing applicant’s fit with our stated values.  It actually worked pretty well.

 

myles.suer
Myles Suer 138 Points | Sat, 08/11/2012 - 06:11

Interesting discussion. I have gotten to teach several ethics classes at the University of Phoenix. I personally find them difficult because they are so practical but yet so theorical. As you probably know, there are schools of ethics. Some say ethics should be clear cut, but in so many cases, they can be complex. I remember a situation when I started my career where somebody did something and I asked how they could do it. They gave me a great answer that seemed apprropirate at the moment. They later went to jail. So many situations are so messy today. I am coming to believe that stakeholder analysis is the best way to pop out the answer when things are complex. 

jdobbs
Joel Dobbs 322 Points | Sun, 08/12/2012 - 19:00

Myles & Pearl,

Thanks for your comments. 

Several years ago I gave a keynote address for a large pharmaceutical/biotechnology industry meeting which I titled "Why universities can't teach ethics."  My basic premise was that, in the politically correct world of today's universities, many are unwilling to discuss absolutes of right and wrong for fear of offending someone or committing the fatal sin in politically correct cultures of appearing "intolerant.'  The simple reality is that one cannot teach ethics unless one acknowledges absolutes of right and wrong.  We humans have an amazing ability to rationalize our behavior and, Myles, I suspect that is what your former colleague did.  I suspect that their rationalization sounded good. Unfortunately it didn't pass the test or right and wrong and they paid dearly. 

pearl
Pearl Zhu 89 Points | Wed, 08/01/2012 - 15:31

Hi, Joel, as usual, both enjoy your blog and the quote you put there: Ethics is knowing the difference between what you have a right to do and what is right to do.”, also read another good article recently regarding Status vs. Power, well articulate, fairness is very important at working environment to motivate;  in the case you put here for decision making, to ensure doing the right things, empathy, dig deeper than the surface, to practice fairness in management and execution. thanks.