Showing posts with label Ethics. Show all posts
Showing posts with label Ethics. Show all posts

Trust as a Leadership Attribute


"If people like you, they'll listen to you, but if they trust you, they'll do business with you." - Zig Ziglar



We can all understand that it is easier to do business with someone you trust.  Think of why you go back to the same mechanic for your car, or like using a certain contractor for home improvements.  If you don't trust the mechanic or contractor, you will take your business elsewhere until you find someone you can trust.   In the military, all team members are mutually interdependent.  They each have a job to do, and trust each other to do that job. In that organization, trusting your coworkers and leader can mean the difference between life or death.

However, in your organization, how important is the trust that you place on your coworkers, subordinates and managers on the effectiveness of your organization?  As a leader, do you trust your people?  Or do you focus more on being trusted?  The effective manager and leader understands and appreciates trust at both the personal and the organizational levels. Trust is a two-way street.


"Trust is the glue of life. It's the most essential ingredient in effective communication. It's the foundational principle that holds all relationships."  - Stephen Covey


According to the Ethics and Policy Integration Centre, trust is one of the four key components of Ethical Leadership. The ethical leader manages with a clear Purpose, Knowledge, and Authority. To be effective in this, the ethical leader inspires TRUST in her organization. Without this, people are afraid to exercise their authority.

The best managers I have known provide clear direction on the "what' and set clear targets around this.  Then, they trust their people to execute the 'how'. These organizations are empowered to take the necessary risks to achieve their organizational objectives to be  successful. Furthermore, in challenging times, people in these organizations hang in there to make things work. Strong trusting managers attract strong leaders into their organizations, and are able to retain people. These types of organizations also provide a good mentoring environment for people; and tend to be more agile and effective in their markets.

The least effective managers I have worked with micro-manage their people, because they don't trust that their people can execute the 'how' effectively. Generally, these weak leaders are also poor at setting clear targets and in inspiring trust from their employees. These are generally leaders who depend mainly on their organizational authority and power to get things done. It is hard to retain good people in organizations like this. Successful people in these organizations have to be 'yes-men' to this type of leader.

The truth is that most managers fall somewhere between the best and the worst of what I have described above. So how to you move your organization to the more effective type where there is mutual trust?

  • Do you focus as much on trusting your subordinates or co-workers as trying to get them to trust you? 
  • How do you earn peoples' trust? 
  • As a manager, do you provide clear purpose and ensure that it is understood for your organization (even to the level of ensuring that individual objectives are aligned with this purpose)? 
  • Do you have the organizational, business and other necessary knowledge for your area that inspires trust from people? And do you actively share this knowledge? 
  • Do you have the trust from your managers to make decisions and act on them? 
  • Would your managers, subordinates and coworkers answer the above questions in the same way as you? 
If not, what can you do to change this?
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If you are in a small business, this trust that you create in your organization, and the empowerment that this generates with your employees is more easily observed by your customers than in a larger enterprise. For a small business, it is this trust with your customer that builds the customers' relationship with your organization and the connection with your brands.  This is the competitive edge that drives repeat sales and growth of your business.

Business Ethics and Philosophy

The Society of Business Ethics held their annual conference in Atlanta in August this year. Nearly 5 years since the collapse of Enron, ethicists still find their work in demand. Interestingly, most of these ethics professionals have philosophy backgrounds and more and more companies are adding ethics or compliance officers to their ranks. Pay for the top ethics officials at the biggest companies averages nearly $750,000 (according to Kieth Darcy of the Ethics & Compliance Officer Association).

In 2002, The Sarbanes Oxley Act was passed to establish new or enhanced standards for accounting in response to the corporate & accounting scandals affecting the likes of Enron, Worldcom, and Tyco International. However, these regulations have done more economic damage than it prevents (especially with smaller companies under $100Million in revenue where applying the law is particularly costly). On the other hand, some believe that SOX is essentially modest compared to the heavy rhetoric accompanying it.

Thus in 2004 the Federal Sentencing Guidelines mandated that companies "promote an organizational culture that encourages ethical conduct and committment to compliance with the law". These guidelines go beyond purely legal compliance. Companies must recognize and honor the spirit of the law. Thus, the growth in ethics training in all shapes and sizes.

According to Paul Voss, President and Founder of Ethikos, any approach to improving business ethics must be seen as a strategy and a system, and that all ethical systems require a philosophical foundation.

This gives businesses of all sizes an approach for building an ethical culture that will ultimately result in a system that will make SOX compliance easier (and less costly). And this is what I find of value for improving your compliance processes. It is all about getting to the foundational, value-added, day-to-day ethical activities that will result in compliance.

But how to you get to this? Paul Voss has a well established process around this. For the purposes of this article, I will pose his ten questions that every executive should ask about corporate ethics and ethical culture. These are questions that applies to any business executive or owner, regardless of the size of the business.
  1. What is the relationship between ethics and other performance metrics in the company?
  2. Have we, as required by the 2004 Federal Sentencing Guidelines, offered ethics training for all our employees? What should that training look like?
  3. What is the relationship between ethics and profits?
  4. Have we conducted a "risk assessment" to determine our exposure to real ethical damage?
  5. How can we be pro-active in the area of ethics, culture, and corporate citizenship?
  6. What tone should Executive Leadership set regarding ethics, integrity, and transparency?
  7. What does management need from the Board of Directors and Senior Executive Leadership to enhance and buttress corporate ethics?
  8. Who is driving ethics and compliance in the company?
  9. Do we have consistency between and among the board, the CEO, executive leadership, and associates in terms of ethics and culture?
  10. What impediments and roadbocks do we have that preclude ethical conversions and implementation of ethical practices, procedures, and protocols?

Any ethics initiative may seem "fuzzy" when compared to "harder" business process improvement initiatives. However, many business owners have learnt that SOX compliance is bigger than just changing their accounting processes. They have learnt that SOX compliance depends very much on the behavior of people as they carry out their business activities every day. THIS is where the "softer" side of ethics is key - and this is why it is important to look for solutions for driving ethics initiatives. The solution is in crafting a plan with a philosophical foundation coupled with a logical process. Ethical companies can be more profitable, competitive and sustaining.

Consulting Ethics: Stand like a rock, or swim with the current?

"In matters of principle, stand like a rock!
In matters of taste, swim with the current."
- Thomas Jefferson.
It may be easy for some people to tell the difference between principle and taste, but it's a bit more complicated in the consulting profession.
Your reputation as a consultant will be created by thousands of actions, but may be lost by only one. There are many jokes about consultants based on the actions of a few. For this reason, it is important that as a consultant, or as a client of a consultant, you are aware of the guidelines and ethical standards that set the 'rules to play by' in this game.

The Georgia Chapter of The Institute of Management Consultants has a Code of Ethics for it's members that relates to Clients, Client Engagements, Fees and the Profession in general. In computer consulting, a good resource is the Independant Computer Consultants Association Code of Ethics. Another good resource on the web for advice on the ethics of various business transactions is The Ethics Resource Center.

Large consulting firms have their own Codes of Ethics that may be valuable to look at. Two good examples of these are Price Waterhouse Coopers and Deloitte.

Consulting Ethics links:

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