Monday, 25 June 2012

The Plumb Line


In Jane Austen’s book ‘Pride and Prejudice’, her Mr. Darcy proclaims “…my good opinion, once lost, is lost forever…”

For the inspirational leader there is no such thing as ‘situational ethics’.  That is, right or wrong is not a reflection of the circumstances.  Right is right and wrong is wrong. Truth is not relative.

People on your team must know that there is always a moral compass guiding decisions.  They must know that the response to any situation is not dependent upon who is more senior, or more favoured or more fortunate.  They must know that the situation does not dictate the response but rather the ethical, moral or legal imperative is that which has priority.

Situational ethics are used only by those for whom ‘doing the right thing’ is an optional exercise rather than an obligation.  It is for those who see truth as an inconvenience and a potential obstacle to the achievement of the goal.

Quite apart from disrupting the inspirational leadership model, the fact of the matter is that situational ethics creates a dilemma throughout the organization.

There are no longer any standards that cannot be compromised.  Whether that is dealing with company assets, company finances or company information, where does one draw the line?   When a bribe paid to a foreign nation in order to secure an order and generate business because that is ‘business as usual’ in that country, what’s the issue?  A recent PBS documentary highlighted that much of our current economic malaise associated with the US housing market can be traced back to the practice of derivative trading conducted by major US banks.  The documentary showed that the practice would have violated US law had the banks not sold these financial instruments to European banks and non-bank companies in the US.  The bottom line was that the US banks found a way around the law and in doing so they created a market for mortgages where non would have otherwise existed.  Situational ethics in action!

The list is endless when everyone gets to interpret truth for themselves.  No definitions are valid any longer.  If I see performance one way and you see it differently, who is right.  Or for that matter, is there a ‘wrong’ any more.

Leaders set the standard.  And the standard must be unambiguous.

Expectations must be codified.  And they must be applicable across all levels of the organization.  As we saw with the issue of accountability, there can be no exceptions.  Too many people are impacted by the failure to abide by the standards that are established.

The impact of situational ethics extends beyond the borders of your team or your company.  It really extends to all your business partners, whether they are suppliers or clients. 

All the stakeholders that touch your firm need to know and understand the principles by which you operate.  They are looking for the same unambiguous standards that you promote for interaction within the company.

At the same time, your employees need to understand that the standards are applicable externally as well as internally.  There should never be a question in their minds about the need to compromise their personal integrity or the company’s standards.  No client, no supplier, no opportunity is ever so important as to require you to defer to a situational ethics decision.  As tempting as it may be in the short term, the consequences that follow will NEVER justify the decision.

The consequences may not be immediate. You may be able to rationalize the decision based on any number of factors.  But as well intentioned as you think your motivation, you move away from your standards at your peril.  RESIST the temptation.  Deal in truth, not in abstract.  Everyone wins when you set the standard and then abide by it.

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