<p><em>When it comes to instilling ethics in the corporate environment, learning professionals have few easy options. But eliminating decision-making bias, promoting a transparent culture and circulating lessons learned can clarify the gray areas and help position the organization for success.</em></p> <p>Teaching right and wrong is not a black-or-white, yes-or-no construct. Answers to global business problems are often complicated and culturally charged, constrained by religion, setting, laws and values. Today’s leaders must be aware of any bias they may bring to a given situation, and it’s the chief learning officer’s job to provide context and help illuminate a straight path to a workable solution. </p><p>“Teaching right and wrong is really helping managers, executives and employees understand decision-making biases, how they get caught in traps,” said Mason A. Carpenter, a professor at the University of Wisconsin-Madison School of Business. “Often we look at the outcome — this is right or this is wrong — and we miss the path a manager is walking down. They thought they were doing the right thing, but they got caught up in a process that led them to a wrong outcome.”</p> <p><strong>The Partnership Between Culture and Ethics</strong></p> <p>Most employees don’t intend to cross the line; they simply may not recognize the signs that indicate they’ve moved from black and white to gray. This is why it’s important to promote cultural transparency and open communication.</p> <p>Carpenter said culture is the fabric of learning, providing new inputs that can prod someone to behave in a way that will increase the likelihood that a firm will not only survive but perform. Further, systems that are in place, such as those involving compensation or performance management, are also part of a company’s culture and should reinforce the company’s values.</p> <p>“If you’re in medical testing, and your managers and their staff are paid based on getting a drug or a protocol or something approved, as opposed to getting a drug or treatment that is safe through the process, that type of incentive is going to push people to make choices they might not make under another incentive scheme,” Carpenter said. “The challenge is how do you create incentives that match up with the outcomes you need? For for-profit companies, that’s profitability without jeopardizing credibility, but in some companies the outcome is most important, how I get there is not so important, and that creates all sorts of problems.” </p> <p>Decision making is the product of the decision maker’s experiences and upbringing. Explicitly stating an organization’s values as often as necessary is one way to deal with the conundrums that can arise between one course of action and another. Whether someone believes something is wrong or not, knowing which action the company expects one to take helps the decision maker reach the desired outcome. </p> <p>“Even if you have a different moral code, if a company says, ‘These are the things we value, and we expect you to make decisions and conduct yourself in concert with those values,’ that can have an impact,” said James W. Dean Jr., a dean for the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill.</p> <p>The same is true for expected behaviors. If the company’s culture and code of conduct prohibit certain things, it offers people guidance for their actions. But Dean said the complexities and rapid changes inherent in modern business often mean it’s impossible to write a set of rules that will cover all situations. </p> <p>“That’s why corporate learning officers and senior executives in general need to engage people at the level of principles and values as well as with specific lists of what to do and what not to do,” he said.</p> <p>The CLO should anticipate challenges and situations that members of the organization are likely to face so that any learning developed will be preventative and grounded in reality. CLOs also need to know what corporate pressures may make it difficult for individuals to always follow the best ethical practices. </p> <p>“A CLO would seem very naive if he or she put out a set of definitive practices and then found out they’re being undermined by guidance or reward systems being given by line managers throughout the organization,” Dean said. “Also, what approaches to learning are likely to be helpful to people? Is it the kind of organization where people will come to classes and sit in seminars, or is it the kind of thing where people will go to websites? Or are Twitter updates the best way to get the message out?”</p> <p><strong>From the Top Down</strong></p> <p>On-boarding and orientation processes are a couple of ways organizations can establish values and ethics for employees immediately, but to exemplify right and wrong and promote the bias-free, 360-degree decision making desired, leaders must lead by example. </p> <p>“A chief learning officer is going to be effective to the extent the CEO shares the vision of the importance of what that learning officer is doing,” Carpenter said. “People do what they see. They’ll follow what they see gets rewarded. Leaders have to practice what the chief learning officer is preaching. If there’s a disconnect between that and a chief learning officer’s credibility, the values they bring to the organization are going to be undermined.”</p> <p>Carpenter said the problem then becomes: How does the CLO prioritize who receives this type of development? Much of it starts with senior leaders, which makes sense. However, more organizations are using online learning tools to share some of it with front-line employees, thereby easing economic constraints. But Carpenter said no group should go without ethical training because any part of the organization that’s not in sync with the company’s notion of right and wrong becomes its weakest link going forward. </p> <p>“Look at Toyota and the problems they’re having with brakes and accelerators,” he said. “These are pretty fundamental parts of a car, but what we see is a failure to communicate. Toyota’s really good at getting systematic quality from Japan to the markets it serves. It’s really poor at getting that knowledge from England to the U.S. </p> <p>“A year ago, a learning organization would have realized: ‘We’ve got a problem with this vehicle in England [and] it’s the same basic configuration we have in the United States,’” Carpenter continued. “Toyota’s interests are to promote consumer well-being and make a profit, but they would have fixed this had [transparency and open communication] been part of the fabric of the organization. They have the culture to differentiate between right and wrong. They don’t have the communication systems to make that happen.”</p> <p>Noel Tichy, a professor at the University of Michigan’s Stephen M. Ross School of Business, said before any discussion of or effective development on ethics can take place, the CEO and the board must put “rules of engagement” together. These rules must be very clear because the CLO will need them to do his or her job.</p> <p>“It’s a never-ending journey, but the chief learning officer has got to be the one to give the CEO and the top team the teaching platform,” Tichy said. “They shouldn’t be hiring consultants and people like me to come in and talk to their people. That’s like hiring an outside consultant to tell your kids what your values are. The leader has a responsibility — especially in the values area — to stand up and frame it, debate it [and] help people understand it.”</p> <p><strong>The Rules of Engagement</strong></p> <p>Tichy, who began his career in the corporate world at General Electric’s Leadership Institute at Crotonville in the 1980s, said he recalls a speech that then-CEO Jack Welch once gave to more than 150 officers.</p> <p>According to Tichy, Welch said, “We’ve got 320,000 employees. Someone right now is stealing, taking drugs and cheating, so don’t kid yourself. There is dishonesty going on in any big company. The issue is what does the leadership do about it?” </p> <p>“Dealing with ethics is like religion: You’ve got to revisit it, re-discuss it, talk about it,” Tichy said.</p> <p>For example, during one of his classes for MBA students, Tichy said he brought in a team from Procter & Gamble to discuss ethical dilemmas. </p> <p>“In one example you’ve got a soap plant at a country in Africa. You’ve got to deliver this chemical to keep the plant open. You get to the border, and the border guy says, ‘Sorry, you don’t have the right paperwork. I cannot let you cross.’ If you don’t deliver the chemical, the plant closes and 300 people aren’t working. </p> <p>“The guy says, ‘For $300, I can fix the paperwork,’” Tichy continued. “What do you do? You could see the MBAs debating: ‘Well, wait a minute, 300 jobs. What [difference could be made by the] 300?’ But Procter & Gamble actually shut that plant down for a year. The CEO at the time said the minute you cross that boundary once, you’ve set a new standard globally for Procter & Gamble.” </p> <p>Presenting real-life scenarios is the best way to get people sensitized and prepared to deal with ethical issues, Tichy said. It also helps to examine one’s personal history — for which standards vary all over the world — and what role experiences and upbringing play in efforts to solve workplace problems. Further, consequences for wrongdoing should be clear and unassailable.</p> <p>“You have to get people to look in the mirror at themselves and look at the ethical dilemmas they’ve dealt with when they have crossed the line,” Tichy said. “Then you have to help them look at all the various ethical issues that a company faces. It’s not just cooking the books. It’s things like internal transfer pricing. Am I screwing another division dishonestly? Am I not dealing with my customers, my suppliers honestly? Am I doing honest appraisals? Leaders of companies have an opportunity every time someone crosses the line.”</p>
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