Ethical leaders – your people (and our planet) need you!
I wrote a post a few weeks back about an experience I’d had earlier this year, pitching to a group of C-suites in the financial services industry. They basically set me up to fail, pinched my programme ideas and design, and left me feeling a bit exploited.
The experience has bothered me for a while, and has made me reflect on the nature of leadership, how we treat each other, how we’re influenced, and leadership accountability.
Leaders behaving badly
Ethics and business have a chequered history. It’s not news to anyone that confidence in business leaders is consistently low. We can all easily rattle off a list of scandals that have tainted big corporations over the years: financial and sexual misconduct, non-compliance, tax evasion and avoidance, safeguarding issues. There are a plethora of shadowy, faceless empires that are far from squeaky clean: Walmart, Nestle, Shell, Coca-Cola, McDonalds… We could be here all day listing them.
To most of us, those tight-knit, big business, leadership circles can seem like a dark, murky underworld. The Occupy movement protested for social, racial and economic justice, but anti-corporate messages were at the forefront, and are testament to the public rage that unethical corporate leadership evokes.
The way we absorb these stories of corruption through the media can, I think, sometimes have the effect of anonymising the people who are responsible. These businesses are so enormous, so powerful, so multifaceted and impenetrable, it’s easy to forget that they are run by human beings who are making truly unjust, awful, self-serving decisions.
So, with this as our backdrop, is it any wonder that we feel angry, disenfranchised, and like the business world has lost its moral compass (if it ever even had one?) Moreover, if you’re directly on the receiving end of shady decisions and processes (as I felt I was), we’re much more exposed to the people we’re dealing with on a personal level: their values and behaviour are laid bare. I’m tough – I can handle these knocks, it’s part of life. But it still makes me angry!
‘The common good’
What’s going on then? An interesting angle to approach this from is ‘courage’. It’s absolutely possible to run a successful, ethical business, if you have the courage to take a longer term view. The Centre for Ethical leadership backs this up, and defines ethical leadership is ‘knowing your core values and having the courage to live them in all parts of your life in service of the common good.’
When we’re working with clients on culture change programmes, we see that profit and ethics can happily co-exist – it’s not a utopian dream! Of course, for any business leader, profit is the bottom line and clearly, without it things fall apart. But short term gains will always come at a price, if you forget the wider context. Contemporary leadership best practice advocates building a strategy and vision with environment, social and governance (ESG) themes at its core.
I think we need to be bolder, and more specific: ethical leadership is about focusing on your PEOPLE, PURPOSE, PROFIT and the PLANET.
Your greatest asset
Your people are everything. Behaving ethically is undoubtedly good for business – and there is much heavyweight research to back this up. For example, diverse boardrooms mean more robust decision making and an avoidance of highly damaging ‘groupthink’. If employees feel they can speak up, challenge, and are allowed to be an individual in the most holistic sense, we’re more likely to see fair, just, compassionate leadership.
What really makes me excited for the future, is Gen Z and the millennials who are more focused on ethical leadership than any other generation. In our book, Building a Culture of Innovation, we explore these future leaders as powerful drivers of change. They’re more entrepreneurial, and hyper aware about the impact were having on the planet. ‘So different are Generation Z …that it will take a concerted leap for organisations to successfully integrate them into the world of business’. They are also the DIY generation and more inclined to think outside the box.
This can only be a good thing, especially at a time when society appears more divided than ever.
Countries are choosing to elect populist leaders who condemn and offend large groups of people, and make whimsical decisions based on short-term interests. They make rules for the masses, but fail to adhere to them themselves, and are self-serving in the extreme. Many will be looking to a new generation of leaders to reinvent the wheel – it’s long overdue.
According to a CIPD report our ‘contemporary business practice emphasises the rational and the compliant’. We comply with rules that are there to protect against people – gender pay gap reporting, and equality, inclusion, fairness and transparency are the cornerstones of business best practice. Why? Because it’s right to protect people and treat them fairly.
When an organisation forgets this, it spells disaster and results in dysfunctional management, low performing teams, terrible customer service and, if the company is big enough (and ugly enough) – untold reputational damage (hello Philip Green, Mike Ashley, Jeff Bezos…)
It could be argued that in recent decades we’ve tacitly accepted that leaders play by a different set of rules. However, that game is up. Business leaders need to get with the programme: adopt a person-centred approach or simply get left behind whilst Gen Z get on with running the game-changing businesses of the future.
We’ve worked with clients who have developed dysfunctional cultures as a result of having no clear purpose. If leaders understand their purpose – that is, why do they exist? What do they want to achieve?– then it gives the individuals within that organisation a sense of belonging, and alignment to a way of working. Without that driving force towards a shared goal, a business can quickly become fragmented. Successful, ethical leaders will be leading by example.
Having a clear, meaningful purpose for your business is lucrative. Ethics and money don’t have to be mutually exclusive. A report by Salesforce found that:
- 93% of consumers say companies have a responsibility to look beyond profit and make a positive impact on the world
- 88% believe businesses are responsible for fostering positive social change
- 87% of consumers say companies are responsible for advocating for human rights.
Our wonderful planet
Our planet might not seem an obvious pillar of ethical leadership, but it should be. We’re facing a climate change crisis, the consequences of which will be catastrophic for us all. We have less than 7 years left until we reach a tipping point from which we cannot return. Any purposeful, ambitious leader who is out to be successful should be horizon scanning right now, and changing how they operate, looking at every facet of their enterprise and not just exploring what could be done differently – but actually doing it. If our business communities don’t change the way they operate, EVERYTHING will be affected. Global supply chains, goods shortages, displaced workers, increased likelihood of pandemics…
Short-term thinking isn’t good enough. Research shows that CEO’s are apparently more than aware that climate change offers a significant economic and humanitarian threat over the coming decades, and that there is a need to rebuild organizations in a way that supports a new and sustainable economy. But we need action alongside that awareness. The clock is ticking.
A new era of ethical leadership?
There are reasons for cautious optimism, but our leaders have got to take the initiative, be courageous, and connect with the real humanitarian and environmental issues that we’re facing. Organisations will be future proofed, more profitable, successful, and innovative, if their C-Suites are equipped with the tools needed to be the type of leader the world needs today.