Phenomenon of ethical blurring - do you have the solution?

Deception, organizational misconduct, and many diverse forms of unethical practice are some of the critical issues in contemporary business. Almost every day, we see in the media terrifying multi-billion-dollar cases of fraud, and this is becoming prevalent. The moral immunity of world business leaders has turned into an issue of concern since the early 2000s. Nevertheless, even more usual and widespread are cases of petty unethical conduct of staff in companies - unethical acts and misconduct committed by people who value morality and care about it on public but behave unethically when confronted with the opportunity of fraud, a kind of double-dealing, or pharisaism.

? It implies to me that one of the reasons for such misconduct is that the business operation is often built remuneration on the result base, and not for the quality of the result.

What appears, in reality, is that surprisingly often an employee makes an unethical decision that turns out to be successful and will be rewarded, on the opposite, an ethical decision that turns out to be unsuccessful and the employee will be punished. A reward is, in fact, becomes the motivation for unethical decisions that bring good results, is the key to defeat in the long race. Unfortunately, such misconduct is a massive global trend. Many managers ignore unethical behaviour, and justify its nature by delivering great results, it unwittingly serves to wreck the ethics of their organizations. In my company, for a short time, I had the best “selling” manager, who did achieve success in an exceedingly tricky way; he drew prospects for new clients that few companies in the world would fulfill his commitments.

? Company management should beware of this bias, and investigate in detail, through surveys and tests (which is often done formally, if  not at all), the behavior of their employees and encourage quality decisions, not just focus on the achieved results.

In the modern business realm, which is extremely complex and integrated with multiple social aspects, ethical actions require well-developed moral reasoning and awareness from the manager. But ethics is not mathematics. It has a certain degree of uncertainty, like all sciences relating to human behavior. There is no moral axiom that allows you to move from deductive certainty from pure “data” to moral truths. If you are looking for such data in your balance sheet, you will never find it. Beforehand, we live in societies that incorporate relatively little unified moral systems. Instead, modern societies mix different groups with complex, diverse, but interwoven history with own religious and moral practices. Competing traditions often encounter each other within the same society, battling for political and cultural superiority. Secondly, nations - again with fragile moral traditions - are increasingly in need of cooperation with each other to solve global problems. In this situation, our existing ethics and our developed emotional tendencies do not always coincide, the collide of modern trade wars is a clear example.

Again, it should also be borne in mind that not one of the existing moral systems will be adequate for the types of problems that companies face in the twenty-first century. This does not mean that we must abandon the rules that limit, say, lie, breach of promises or intentional harm to others. But we may need to develop new standards to solve corporate problems that are very different from we faced decade ago. I see a gap between modern needs (on the one hand) and general (reasonable) morality competing with complex moral systems that currently exist (on the other hand). I could call it the “moral blurring” by analogy with the “empathy deviation”.

We observe that businesses invested a bunch of effort and money into improving their ethics - they establish ethical codes, organize ethics training, create compliance programs and hire watchdogs. Such initiatives are not cheap. A recent audit of 217 large corporations revealed that for every billion dollars in revenue a company contributes an average of $ 1 million on ethical compliance initiatives. If these efforts worked, we may say that the capital was spent effectively. But this is great If. Despite all the time and money that was invested in these efforts, and all the laws and regulations maintained, unethical behavior in companies is expanding with mathematical progression. And this disappoints. Most well-intention ethical programs fail because they are static; they do not consider employee prejudices and motivations, their secret expectations and attitudes, which are often associated with unethical behavior. What can we do in this case to get rid of unethical conduct in the company?

? Avoid “imposing” ethics through systems of control and sanctions.

Instead, make sure that management and executives at all levels are perfectly aware of the prejudices and motives of employees, their secret expectations and attitudes, biases that can lead to unethical behavior. This will encourage your leaders to call for the most important question when testing all sorts of options: “what ethical consequences may appear due to this or that decision?” Initially, try to realize that you, as a leader, responsible for corporate blind spots that tolerate or encourage unethical behavior.

It is highly evident that it achieves the excellent result when the organization’s culture and the employee’s beliefs, values coincide. In this instance, a good relationship with each other, empathy and closeness in the organization are essential factors that create a satisfying environment in which a sense of belonging is well cultivated. These companies do not face difficulties in attracting and retaining employees, which indicates a high level of job satisfaction and ethical attitude.

One survey identified that similarities in over 70 countries exceed 80% for a range of values and behavioral variables, including moral attitudes and values of self-expression. And in this sense, I like Josephson’s idea where he outlines 12 ethical principles for business leaders that can be easily employed to any cultural environment: honesty and decency, keeping promises, loyalty, justice, caring (caring for others), respect for others, compliance with laws, commitment to excellence, leadership, reputation, morale, and finally responsibility.

One day I flew to the city of Yiwu, in southern China, early on Sunday morning and asked the head of the company, who supplied air fresheners for European retail chains, to meet me at the airport and make me a lift to the hotel. I brought a present for her from Prague and on the way to the center of Yiwu, I apologized for an inconvenience that I had torn her off from household duties on a weekend. To my surprise, my Chinese partner answered very sternly and discouragingly: we work on Saturday and Sunday and have no days off.

I’m talking about this with slight irony, because in recent years there are so many books written on how to properly motivate company employees so that they feel comfortable and cozy, relax and even sleep in the office, and instead of 5 days only 4 in a week to spend in dusty offices, and so on, and meanwhile, in China workers do not take days offs, which is apparently speaks for itself why the Asian economies are so competitive. Accordingly, a good deal of you may object that the burnout of staff, loss of motivation, stress and the like hit the surface, and I completely agree to extend that Yiwu examples is not the best to follow. We are all aware that in the Western world more than 70% of employees quit the job  in the first year of employment, and more than 80% of workers hate their job.

It resonates to me when figuring out the reasons that influence staff motivation, their participation in corporate activities, the adherence of ethical and moral standards in the company, or when considering not merely at how the norms and rules of conduct are spelled out, but most likely, what employees think about the company, its management, corporate processes, motivation system, disputes, and confrontations. Truly it is part of HR job to figure it out, there are HR employees who are in charge of supervising these issues. In my practice, I have never met such insightful people in the HR environment who have a 100% overview of what's happening in the company.

I will hand over a case from my practice, wherein, the national wholesaler KA manager of the largest food manufacturer, responsible for the elimination of products with expiring shelf life run a third-party company that bought up the whole these products and traded to small shops gaining bonuses and financial support from the manufacturer, earning a lot of money for 7 years tenure. It is hard to imagine that none of the colleagues knew or were informed about such a vicious scheme. A more illustrative is an example when the General manager of the global chocolate manufacturer in Eastern Europe built a factory line to produce me-copy product, which caused significant harm to the company. I bet that a few knew about his efforts, if not the entire staff of the company.

I would like to focus your attention on only one prevention method that I successfully tested in my practice and which carried out positive results both to improve the climate in the company, increase staff motivation, involve personnel in the company’s activities, and to prevent all kinds of wrecking, stealing and deceit, raising the level of ethics. I would like to ask you how regularly do you or your HR department conduct staff surveys? Once, twice a year? And what would you say if you conduct surveys every month, or moreover, every moment a problem occurs? You may suggest that there are internal boards and meetings for this. Of course, you answered precisely. Have you ever tried doing anonymous employees polls or tests? for illustration, how regularly do you anonymously ask your key executives about the main challenges your business deals with, or for example, what key issues do your managers identify as the most essential from the strategic point of view or operational development of the company, its sustainability and competitiveness? I assume you recall a mundane business case with coffee spots on a table in an aircraft. I employed this case dozens of occasions and I admit every time the answers surprised me because regularly, they did not coincide with what management board spoke about. Not surprisingly, the 1/3 + 1 rule always works more accurately than any takeaways. Do you remember when the last time you determined on the basis of anonymous testing of middle management which 3 main processes really function in the company, and which 3 do not work, or what are the 3 main objectives in their opinion? It is curious that after such surveys, my board of directors took the full weekend in order to interpret all the subjects and find out how to handle them. An even more impressive experience is when you learn through surveys how a specific department of a company functions and what hinders help to tickle your supply department. In the same surveys, intelligence usually appears related to fraud or corruption schemes or unethical conduct of employees.

Here I should mention that when managing companies in Europe, Asia or America, I have always used the services of psychometric tests, one of a kind. This is a comprehensive solution to the projective approach, which limits stylization at a conscious level. The test accurately measures and evaluates well-defined criteria in percentage terms. The objectiveness of the software is 99.6%. The results are highly professional, clear, with a simple description of the assessment criteria. The subjectivity of an individual does not affect the assessment; it is merely a perfect mathematical analysis. Very often, a test helps to determine not only how satisfactory your employee is for fulfilling the tasks, functions but further allows you to figure out how objectively disposed of theft or deception, moreover, usually, such a test made it possible to identify a corrupt manager after the misconduct.

Indeed, my message is more about how to accurately and objectively assess not exclusively the competency of the personnel but distantly its genuine motivation and mood. After all, it is extremely vital in what spirit your employees perform and how thoughtfully they are ready to advance the tasks assigned to them. Do not be afraid to experiment, challenge your personnel what they think, what motivates them to answer sincerely. Another source of insight for the development of companies is an employee’s survey about what they would want to correct or improve in terms of technology, processes, practices and so on. Pretty often, contemporary suggestions showed up from nowhere. I call up from my experience the case when I proposed to study the mood of future sergeants of the anti-terrorist unit in the educational battalion in which I performed as a coach, on my part, it was a radical proposition, and on the hands of commanders,  a discouraged arrogant behaviour, which turned to be the right choice to get an authorization to realize this project. The results of the research carried out adjustments in the crew operation procedures, which allowed the cadets to better prepare for hostilities, while taking into account their individual competences, and most importantly, enhanced stress resistance of crew and satisfaction with the service.

I would like to highlight several key issues that one way or another will guide you when conducting surveys of personnel, here are the major ones:

1. Conduct surveys on topics that affect the rational issues of the company. No one will tell you about the business’s strategy. Most likely, the staff will worry about whether the company is ready to cover part of the car loan for the 3 best employees of the company, or what are the regional representative needs to increase the% of satisfaction of his customers.

2. Surveys should be conducted on an ongoing basis; your sales, logistics, or finance staff should be aware that every third Thursday an anonymous test or survey will be conducted.

3. The results of surveys or tests should be analyzed by executives and honestly debated with the team and, accordingly, optimal decisions should be made.

4. Switch on a creative approach to the compilation of questionnaires for tests; This applies to everything that excites you as a leader and staff.

5. Usually, at the quarterly or an annual convention, we named the most creative answers that prompted the most to the company achievements and awarded the winners.

6. Remember that anonymous questioning, an employee survey is one of the powerful tools in management practice to improve the level and quality of decision making, as well as a two-way objective communication with your personnel, it allows you to adequately discover and resolve blind spots in the company and control the ethics blurring.

Explore and analyze the personalities in your team, tendencies, moods, behavior, determine their expectations, spell out their expectations, assign them with feasible targets, explain the reasons why the company may or may not meet their expectations, establish a great place to work, create a motivational culture - trust, enjoy, proud, use recognition and reward, remove the barriers between employees and management, and later maybe at the end of the day, you can declare - ‘we are a successful and ethical company’.