Value-Centered Ethics: A Proactive System to Shape Ethical Behavior

VALUE-CENTERED ETHICS A Proactive System to Shape Ethical Behavior Charles D. Kerns, Ph.D., MBA

HRD PRESS, Inc. Amherst, Massachusetts

Copyright © 2005, Charles D. Kerns. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or use in an information storage or retrieval system, without prior written permission from the author.

Published by: HRD Press 22 Amherst Road Amherst, MA 01002-9709 800-822-2801 (U.S. and Canada) 413-253-3488 413-253-3490 (Fax) www.hrdpress.com ISBN 0-87425-806-5

Editorial services by Sally Farnham Typeset by Pracharak Technologies (P) Ltd, Madras, India Cover design by Eileen Klockars

Dedication To my wife Chris, who models strength and kindness on a daily basis for all of us fortunate enough to be in her vicinity. To my children, Jason and Lauren, from whose hearts, minds, and bodies flow actions that give me hope for our future. They are on paths that make me proud. And in memory, to my parents, who taught me the values of hard work, honesty, and humility, and that education is the door to a better life.

iii

This page intentionally left blank

Table of Contents Dedication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Acknowlegments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii Chapter 1: Getting Started: The Framework and System . . . . . 1 Chapter 2: Derailers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Chapter 3: Why Should I Care? . . . . . . . . . . . . . . . . . . . . . . . . 27 Chapter 4: Getting to the Heart of the Matter . . . . . . . . . . . . . 41 Chapter 5: The Managerial Leader as Influencer . . . . . . . . . . 55 Chapter 6: The Managerial Leader as Director . . . . . . . . . . . . 81 Chapter 7: The Managerial Leader as Focuser . . . . . . . . . . . . 99 Chapter 8: The Managerial Leader as Linker . . . . . . . . . . . . 127 Chapter 9: Behavioral Standards . . . . . . . . . . . . . . . . . . . . . . 147 Chapter 10: Managing Consequences . . . . . . . . . . . . . . . . . . . 161 Chapter 11: Putting It All Together: A Self-Management Approach . . . . . . . . . . . . . . . 175 Chapter 12: Take Aways and Calls to Action . . . . . . . . . . . . . 195 References and Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

This page intentionally left blank

Foreword Ethical leadership is a central element of successful enterprise management. Yet, for too long, ethics has been the domain of philosophers and theologians. Although scholars have much to teach us about ethical behavior, what managers really need are clear, accessible guidelines that are of practical use. Unfortunately, these tools have been hard to come by, and those that do exist are typically either too academic or superficial. Scandals at Enron, Adelphia, WorldCom, and many other companies suggest that leaders are desperately in need of basic ethical guidance as they navigate the complex seas of modern management. The example set by leadership might be the single most important determinant of the existence (or absence) of ethical practices throughout the organization. Leaders and managers are eager for direction on how to establish a strong culture of ethical responsibility and accountability in their organizations. In this book, Charlie Kerns develops a system of ethical practices that leaders of organizations of all types and sizes can put to use. Kerns shows how the basic A-B-C Model of antecedents, behaviors, and consequences can be used by professional managerial leaders to have a meaningful impact on ethical behavior. He identifies critical “derailers” that can cause an otherwise ethical person to transgress, and he provides a clear description of why ethical leadership is important to leaders and their organizations, and how managers can combine virtuous values, managerial leadership practice, and behavioral standards to establish an environment conducive to ethical leadership. He goes on to describe the four roles of a managerial leader (influencer, director, focuser, and linker), and he develops managerial standards and behavioral consequences of these roles. Finally, he leaves the reader with specific action steps and “take aways” that managers can recall and use on a regular basis. vii

Value-Centered Ethics

Drawing on decades of research and studies, Kerns boils down the essentials of ethical leadership to key lessons that are both practical and accessible to any senior leader or manager. Importantly, he offers concrete advice to leadership—including that of business schools themselves—on how to immediately begin implementing ethical leadership within modern, complex organizations. This is a timely, thoughtful, and insightful book. It is sure to be widely read and discussed by established and aspiring executives and will undoubtedly result in positive change within the organizations they seek to lead. Jonathan Doh, Ph.D. Director, Center for Responsible Leadership and Governance College of Commerce and Finance Villanova University Villanova, PA 19085

viii

Preface “You played the angles too much, exaggerated the truth too much, manipulated me and others too much,” one boss writes to a key report, suggesting that he resign. “Playing the angles” in this case included running up $6.3 million in expenses over 15 months by this “power spender” according to a front-page story in the Los Angeles Times. The biggest expense, taken from an independent accountant’s report, was over $2 million for office remodeling. The story goes on to index other excessive expenditures that then President Michael Ovitz charged to the Walt Disney Company and reveals how Chairman Michael Eisner is implicated in this tale of extravagance. Assuming the facts are in order, if you were a stakeholder in The Walt Disney Company, what questions would you have for the chairman? Consider these: ✥

What virtue lies in this “power spending”?

✥

From a values perspective, what went wrong here?

✥

How did the chairman and the big spender get derailed from an ethical course?

✥

Does this type of behavior matter? Who should care? Why should you care?

✥

What is the real ethical problem?

✥

What managerial leadership roles and actions need strengthening?

✥

Have ethical behavior standards been established? Are effective consequences delivered to reinforce these standards?

✥

How can the practice of ethical managerial leadership be improved?

✥

What was learned by this ethical lapse? ix

Value-Centered Ethics

In reading this book, you will be able to answer these basic questions relating to value-centered ethical leadership. Whether you are in a position like Michael Eisner or are a leader in a small entrepreneurial firm, this book will help you develop a professional and proactive approach to managing ethics in your organization. It will help you avoid being put on the “hot seat” of ethical inquiry. Learning and applying a set of frameworks and tools that will help you confront and effectively tackle the daily ethical dilemmas that we face is a key ingredient in this book’s recipe for managerial leadership. While we continue to be dismayed by dramatic headlines of unethical misconduct, this book is not a message of ethical gloom and doom. It brings instead an optimistic and proactive approach to the practice of ethical managerial leadership. You will be offered concrete ways to shape and sustain a high-performing, ethically sound workplace culture, a culture that projects clear values, effective managerial leadership, and useful behavioral standards. If you take the journey through this book and do the work along the way, you will be able to shape an ethical culture within your organization. Along this path, your organization can be built for great success. Charles D. Kerns, Ph.D., MBA Associate Dean for Academic Affairs and Associate Professor of Applied Behavioral Science Graziadio School of Business and Management Pepperdine University Los Angeles, California

x

Acknowledgments A book represents a gathering of many resources, circumstances, and people. In putting together this guide, my gratitude goes out to many. I am grateful to the many behavioral scientists and management scholars whose work and thinking have influenced my professional career: Drs. Albert Bandura, B.F. Skinner, Aubrey Daniels, Roger McIntire, Donald Pumroy, John Krumboltz, Alan Kazdin, Tim Elsmore, Martin Seligman, David Watson, Roland Tharp, Jay Conger, Bob Fulmer, Noel Tichy, Jim Collins, Bob Nelson, James Kouzes, Barry Posner, Stephen Robbins, Jeffrey Pfeiffer, and Jack Wiley. The work of Jack Wiley on the Linkage Research Model has provided a powerful way for me to integrate value-centered managerial leadership practices with employees, customers, and business results. I am also indebted to all the colleagues I have worked with over the years who have taught me so much about human behavior in organizations and about the power of leading with virtue. On top of this is a great deal of admiration for the many MBA students who have graced my classes at Pepperdine. Their intelligence, persistence, and thirst for applied knowledge is a continuous source of inspiration to me. I would also like to thank Dean Linda Livingstone for her encouragement and support for me in completing this project. Our faculty at the Graziadio School of Business and Management is a constant reminder of the value of teaching applied business skills to practitioner-oriented students. Their work helped keep my writing on a practical and applied course. A special thanks goes to Mike Sims, Lori Putnam, and Kelly O’Connor, all members of the Graziadio School team, for their support and encouragement. Their frequent, “How’s the book coming?” or “When will it be done?” served to motivate me to the finish line. Two spiritual mentors, Joe Rokus and Maurice Hall, are xi

Value-Centered Ethics

both exemplary of what virtue is all about. Joe’s leadership in business and Maurice’s missionary work, along with their service to our faith community, illustrate the meaning of value-centered ethics. On the editorial side, I would like to thank two people at HRD Press. First, Chris Hunter for encouraging me to take on this work. Second, Bob Carkhuff for showing support, flexibility, and patience as this project unfolded. I greatly appreciate their support of me in this project. Also, the production of this book would not have been possible without the persistence, patience, and extraordinary labors of Louise Sakihama. Without her gigantic efforts, we would still be struggling to get to first base in the production process. Finally, from the bottom of my heart, I thank my family. My loving wife, Chris, offered her editorial expertise, insights, and encouragement every step of the way, and supported me through the entire process. My children, Jason and Lauren, have been so patient as I worked on this project. Their words of encouragement, feedback, and caring can never be properly measured. My family and their loving support truly are blessings.

xii

Introduction What is all the fuss about ethics? Don’t all of the really bad unethical managers go to jail? Why is this relevant to me? Why should I be ethical in my business when everyone else cheats? How can I get ahead if I am always honest? I am frequently asked questions such as these when discussing the topic of managing ethically. Sadly, there is a grave lack of understanding of the importance and impact of ethical leadership in our business organizations. Managing ethically is crucial for the longterm success of an organization, and it is necessary for the long-term survival of our society. If unethical behavior becomes the norm, our culture will break down over time. In this post Enron, Global Crossing, Arthur Andersen, WorldCom era, practicing managerial leaders such as yourself are bombarded with all types of approaches to help you understand and perhaps fine tune your ethics. The approaches to business ethics are many and varied, ranging from theoretical formulations lacking practical relevance to the overly simplistic assertion that ethics is about knowing the difference between right and wrong. Recognizing this divergent and often confusing set of perspectives on dealing with managerial ethics, I wrote this book to help the practicing managerial leader face real-world ethical dilemmas and decision points in their daily work on a very practical and pragmatic level. While rigorous theorizing and philosophical speculations might be important to advancing the esoteric study of ethics and morality, they do not readily advance the practice of ethical managerial leadership on a daily basis. On the other hand, the often simplistic popular assertions of authors on how to understand and deal with ethical situations might be appealing to practitioners who are short on time and pressured for results, but simple solutions do not provide the underpinnings for long-term professional leadership. Managers need practical frameworks, systems, and tools to use on the “firing line” to help shape and sustain ethical behavior in their xiii

Value-Centered Ethics

organizations. This book addresses this need by offering a specific framework, system, and tools to help enhance the practice of ethical managerial leadership. While the material presented is anchored in solid theory, it is written for the practicing managerial leader. References to theoretical formulations and empirical underpinnings for this book are offered in a References and Resources section at the end for those interested in learning more about this foundational material. Value-Centered Ethics will provide you with a specific framework, system, and set of practices for you to adapt to your work setting. It is packed with practical examples, self-assessment surveys, and tools to help you sort through or create your approach to managerial ethics to shape and sustain ethical behavior. While it is easy to understand, it is not intended to be a simple quick fix. The focus of this book is on behavior and managerial leadership’s role in encouraging ethical action. You will be introduced to an A-BC Model of Behavior and shown how a system of virtuous values, managerial leadership practice, and carefully conceived behavioral standards can be integrated to drive ethical behavior. Our major premise is that managerial leaders’ actions are critical in determining whether people behave ethically within an organization. This premise is supported by research and practice. We will begin our journey by seeing how ethical behavior is shaped and maintained. Our basic A-B-C Model of Behavior will be extended to include a system of virtuous values, which have universal appeal. You will learn how these values drive four action roles assumed by managerial leaders and how behavioral standards can be developed to further influence ethical conduct. Before expanding on the proactive value-centered managerial leadership system, we will discuss why you might want to adopt this approach. Reasons we touch on include economics, quality assurance, and social responsibility. We will uncover the fact that when faced with ethical challenges, people often find ways to derail themselves. These various “derailers” interfere with the process of making ethical choices. Having a proactive approach to perceiving xiv

Introduction

and handling ethical dilemmas can be the difference between ethical behavior and ethical transgressions in your organization. Systematic proactive value-centered leadership is stressed over reactive situational ethics. You will learn specific things that you can say and do to encourage ethical organizational behavior, which will ultimately lead to an ethical culture within your enterprise. Specifically you will be able to: ✥

Influence your people with proven skills that enhance their perceptions that they are being treated ethically.

✥

Set ethically anchored direction for your organization.

✥

Focus operations more fully on ethical considerations.

✥

Link resources with ethics in mind.

The four results above will be achieved by your increased understanding of four key managerial leadership action roles. These roles will be supported by a deliberate and systematic approach that will yield a practical set of behavioral standards. These standards will help you deal with the most frequent and perhaps most troubling ethical challenges that you might confront in your organization. To help you shape and sustain ethical behavior within your organization, we offer in this book a useful way to manage behavioral consequences for ethical as well as unethical conduct. In the end, your managerial leadership actions will largely determine the level of ethical behavior in your organization. We help you achieve an ethical workplace culture by showing you how to put this framework and system of value-centered managerial leadership into practice. The final message will capture some key “take aways” and make three calls to action to advance ethical managerial leadership. Hopefully these calls will be greatly facilitated by your reading of what follows. Let’s get started!

xv

This page intentionally left blank

Chapter 1

Getting Started: The Framework and System Using frameworks, tools, and systems as you manage your organization or group can mean the difference between managing professionally on a performance basis and flying by the seat of your pants. Many frameworks, systems, and tools have been proven successful in managing, add value to an organization, and can be adapted to suit any organization. Over the past 25 years, I have taught hundreds of business students, worked on the firing line as an executive, and consulted with scores of managerial leaders. In my experience, I can resoundingly say that systems, frameworks, and tools— based on sound theory and proven practices—will provide you with a competitive edge. Managerial leaders have enormous impact on people and, as such, can influence whether organizational behavior is a promoter or detractor of ethics. Management systems, frameworks, and tools can be used to guide and shape behavior of people within an organization, including ethical behavior. Proactively putting ethical behavior on track requires a framework as well as a useful system for managerial leaders to employ when confronted with both anticipated and unexpected ethical dilemmas and situations presenting ethical choices. I advocate adopting what I call a proactive value-centered ethical leadership system. Although this system is understood within a cognitive social learning theory approach to learning, a discussion of theoretical underpinnings is beyond the scope of this book. Alternatively, you will be offered a practical depiction of this framework to help you more systematically understand how this proactive value-centered ethical leadership system works. Underlying this system is a straightforward and well-documented A-B-C Model of Behavior, which will be discussed first to provide the backdrop for the proactive system. 1

Value-Centered Ethics

The Basic A-B-C Model Ultimately, ethics is revealed through observable behavior. Based on more than 50 years of research, certain basic tenets about how behavior is shaped and maintained have been established. The basic model of behavior—why people behave in certain ways—is called the A-B-C Model. Simply stated, As, or antecedents, trigger Bs, or behaviors, which in turn are followed by Cs, or consequences. Antecedents are cues or action triggers that prompt certain behavior. The behavior we focus on is observable. Consequences occur as a result of a person’s or group’s behavior. The consequences of one person’s behavior can work to strengthen or weaken future behavior. This process can become quite complex when you are analyzing triggering events, behavior, and consequences; one person’s behavior can be another’s antecedent, yet that same behavior can also be the consequence of a third person’s behavior. For the time being, let’s focus on what a managerial leader does or does not do (“B” being the managerial leader’s behavior) in response to an ethical lapse (“A” being the ethical lapse), in order to influence future behavior of others in the organization (“C” being a result of the managerial leader’s behavior). Using the A-B-C Model, Figure 1-1 shows how ethical organizational behavior can be strengthened or weakened by managerial leaders. Recognizing that a managerial leader’s behavior or response in any given situation affects future organizational behavior, the question becomes how the managerial leader can shape her own behavior to mold the desired behavior of her people or organization. The professional system on which a managerial leader relies can significantly impact how she will respond outwardly to ethical challenges and can help her make decisions when confronted with ethical situations. We will now look closely at the system that I have found to be useful to professional managerial leaders in this context.

Adding a System to the A-B-C Model The professional process through which a managerial leader shapes his or her behavioral responses to antecedents spells the difference between the proactive handling of organizational ethics and the 2

Figure 1-1: The A-B-Cs of Ethical Behavior A (Antecedent) Ethical Situation/ Dilemma

B (Observable Behavior) Reaction to “A” by Managerial Leader

C (Consequence) What happened as a result of that behavior?

Star salesperson cheats on expense report.

Cheating is ignored by manager.

Tendency to cheat is strengthened.

Example 2

Accounting clerk manipulates figures to cover up errors.

Manipulation is confronted by manager, but ineffectively.

Tendency to manipulate numbers is strengthened.

Example 3

One employee bullies a fellow employee on assembly line.

Bullying is effectively confronted by manager.

Tendency to bully others is weakened.

3

Example 1

Chapter 1: Getting Started: The Framework and System

Components

Value-Centered Ethics

reactive dealing with ethical dilemmas. Handling organizational ethics on a reactive basis will not produce consistent results—you will end up with “situational” ethics. Simply put, without a proactive system that a managerial leader can espouse and affirm, he would merely be making it up along the way, or responding on a gut level each time. Managerial leadership is a professional endeavor that needs to extend beyond just reacting to ethical challenges on a personal basis. Organizational stakeholders, especially employees, desire to be led ethically by those who have a system for doing that which is rooted in sound theory, easy to understand, and useful. Installing a system that will dictate how ethical situations are handled provides substance and guidance for the manager’s thought process that needs to occur prior to his or her response to the ethical issue. In addition, this system also provides context for the managerial leader to respond. I have labeled the professional processes that intervene between the “A” and “B” to dictate a manager’s behavior the Proactive Professional System (PPS), and the situation where no such system exists a Personal Reaction (PR). The PPS for ethical managerial leadership that enhances your ethical impact on others includes three major component parts: virtuous values, action roles for the managerial leader, and behavioral standards. Figure 1-2 depicts these three components in the system and shows how they are organized in this book. Virtuous Values Values play an enormous role in influencing attitudes and behavior. Virtuous values directly influence ethical behavior. Social scientists have identified several virtuous values that appear to be universally accepted, such as fairness, kindness, and courage. To manage ethical situations professionally, one must adopt and espouse certain virtuous values. Universal virtuous values are discussed in Chapter 4. Action Roles for Managerial Leaders In leading effectively, managerial leaders assume various roles as they engage in certain actions. The actions of managerial leaders can be categorized as being included within distinct roles. Examining the 4

Chapter 1: Getting Started: The Framework and System

Figure 1-2: The Proactive Professional System (PPS) Components

Behavioral

ria ag e an M

ip

(Chapter 4)

n

R

io

ol

ct

es

A

Differentiating

h rs

de

Virtuous Values

(Chapters 5–8)

Non-Negotiables

Standards r (Chapter 9)

© Copyright 2004 Charles D. Kerns, Ph.D. Value-Centered Ethics

5

Compliance ev Relevant

a Le

l

Recurring Issues

Value-Centered Ethics

key action roles can help managerial leaders assess their effectiveness and serve as a way to target areas for performance improvement and development. My research over the past 20 years has revealed that as effective managerial leaders strive to achieve results, they pursue four key action roles: influencer, director, focuser, and linker. These action roles are associated with specific managerial practices that need to be in alignment with a managerial leader’s virtuous values. The effective managerial leader will be strong in all four of these roles. The action roles are discussed in detail in Chapters 5 through 8. Behavioral Standards In guiding her people to work and behave consistently with the organization’s mission and values, a managerial leader can establish appropriate behavior standards. Established behavioral standards help highlight those areas that an organizational leader wants to underscore as important in establishing a culture of ethical behavior. These standards may specifically address situations that frequently confront an organization and its managerial leaders, and/or potential ethical dilemmas that because of their impacts need to be addressed on a proactive basis. An approach to systematically establishing behavioral standards throughout an organization is offered in Chapter 9. Taken together, virtuous values, managerial leadership action roles, and behavioral standards form the backbone of the Proactive Professional System (PPS). Implementation of the PPS will enhance the practice of ethical managerial leadership, which in turn will drive ethical organizational behavior. Components of the PPS are shaped and strengthened by the effective delivery of consequences as described in Chapter 10. Figure 1-3 depicts how the PPS, as the intervening system of professional managerial leadership, can influence and expand the basic A-B-C Model. As we see in Figure 1-3, using the PPS, a managerial leader responds to ethical situations within the context of an internalized 6

Figure 1-3: Adding a System to the A-B-C Model A (Antecedent) Ethical Situation/ Dilemma

Star salesperson cheats on expense report.

Example 2

Accounting clerk manipulates figures to cover up errors.

Example 3

One employee bullies a fellow employee on assembly line.

7

Example 1

Proactive Professional System (PPS)

B (Observable Behavioral) Reaction to “A” by Managerial Leader

Managerial leader relies on internalized system to proactively respond to ethical situation/dilemma. System components: virtuous values, four action roles, behavioral standards.

Behavior of managerial leader will be in alignment with PPS, providing a consistent value-centered response to most ethical situations/ dilemmas.

C (Consequence) What happened as a result of that behavior? As instructed by the PPS, consequences administered by managerial leaders serve to build and sustain ethical organizational behavior.

Chapter 1: Getting Started: The Framework and System

Components

Value-Centered Ethics

system of virtuous values, action roles, and behavioral standards. Managerial responses to ethical situations should then be consistent. Consistent value-centered responses can serve to build and sustain ethical organizational behavior. Over time this system serves as a model of ethics for an organization at all levels. A key process is alignment. It is critical that the individual managerial leader’s response to the “A” is aligned with his or her espoused virtuous values, ethically anchored practices, and ethically oriented behavioral standards. The manager’s behavior “B” over time creates a model for others to follow and is reinforced by the delivery of appropriate positive or negative consequences. Without a PPS, managerial leaders are left to react to ethical challenges on a more personalized basis, yielding a more situationalbased response. In the next chapter, we will review various “derailers” that can cause managerial leaders to lose their ethical bearings. After this brief detour, we will point out some good reasons for you to adopt the PPS and then proceed to cover the nuts and bolts of each of its three components.

8

Chapter 2

Derailers Can good people do bad things? If so, what goes wrong? Even the most ethical person can be derailed if he is not careful. Based on experience and a great deal of research, we know that, indeed, otherwise good people can stray from doing what is right. These transgressions can be attributed to many factors. There are a multitude of ways one can become ethically derailed. Let’s take a look at 15 factors that could derail an otherwise ethical person from the “right” or ethical course. As we do, it is important to understand that each one represents a personal reaction to an “A,” or antecedent, rather than a proactive professional response. The effects of these derailers can be diminished by managerial leaders when they adopt a Proactive Professional System like the one offered in this book.

Derailer #1: No Professional System Managing without a professional framework and system, especially without a clear set of values, will surely result in haphazard responses to situations. Doing this is analogous to a pilot flying in thick gray clouds without instrument rating. Just like the non-instrument–rated pilot, a manager responding to situations without a management framework is in the cockpit without being professionally qualified to navigate this set of circumstances. Rather than take proactive professional action, you as a manager are left to react to situations as they are presented to you. You would be better served, and serve others more effectively, by having a professional system to help you steer behavior ethically on a proactive basis. This will give you a framework within which to decide how to react to the antecedent or ethical lapse consistent with the adopted values and beliefs. A managerial leader’s behavior is a critical determinant of his or her people’s responses to ethical challenges. It makes sense then 9

Value-Centered Ethics

for the managerial leader to operate with some professional framework and system in mind when approaching ethics. To manage ethics professionally, managerial leaders need a set of values, ethically sound managerial practices, and an effective index of behavioral standards. While you are encouraged to adopt the Proactive Professional System (PPS) discussed in this book to your practice, it is more important that you have some type of systematic approach to ethical managerial leadership and not relegate yourself to handling each ethical dilemma on a reactive basis. You can then espouse this system and its values to your people with the desired effect being more consistent valuecentered responses to situations presenting ethical questions.

Derailer #2: Unclear, Unstated, or Non-Existent Values As we will see later, the values we hold are foundational to forming our attitudes and influencing our behavior. Managerial leaders derail ethically when they do not manage a value system that supports and encourages stakeholders to do what is right. Without clearly stated values, the manager and the organization will not necessarily act in a way that is consistent with ethical values. Without a set of core values, you will likely be perceived as standing for very little, and perhaps willing to “fall” for many things. Virtuous values, in particular, are the anchors that hold our ethics steady as we chart rough organizational waters. The capacity to manage values assumes that the manager has identified and internalized a set of core values. These values then need to be both espoused to the other members of the organization and affirmed through the behavior of the managerial leader. This connection between stating one’s values and actually living them needs to be consistent throughout an organization. Managerial leaders at all organizational levels need to align with each other by adopting a common set of values that will support ethical decision making and behavior. Are you able to clearly and concisely articulate your core values? Take a minute and tape record a presentation of your core values to 10

Chapter 2: Derailers

your people, using your most persuasive tone. Play the tape back to yourself and ask: 1. Were the values clear? 2. Was I convincing? 3. Did I really mean it? 4. Do my actions as a managerial leader affirm these values? If you need to further clarify your values, Chapter 4 will help you identify your values or fill in some of the blanks in your value system. If your difficulty is an inability to make a convincing presentation, read the next derailer closely.

Derailer #3: Poor Persuasion Skills Stakeholders within a managerial leader’s network might be vulnerable to ethical lapses, needing effective persuasion to help them stay on the ethical track. Unfortunately, poor persuasion skills can cause a managerial leader to lose ethical ground to those more skilled in the art and science of persuasion. It is hoped that the persuasive managerial leader will use his influence skills to promote his core values, and in turn ethical behavior. The ability to skillfully present an ethical message that influences others to support that message is an important managerial leadership skill. Social psychologists and other experts in this field tell us that you need at least three things to persuade another person or group: credibility, a reasonable approach, and emotion. Initially, you must be considered credible by those people you are attempting to influence. To maintain credibility and persuade stakeholders to move in an ethical direction when dilemmas surface, a managerial leader needs to model his espoused values to stakeholders. You would have no credibility in advocating a core value system if you did not act consistently with the values you support. Second, presenting a reasonable approach—for instance, a realistic way to 11

Value-Centered Ethics

implement or act consistently with the values—will help you be persuasive. Finally, a message is more persuasive when an appropriate level of emotion can be shown to communicate interest and enthusiasm for the proposed outcome that is under consideration— explain on a more emotional level why your ethical path is the right path to take. The persuasive manager will be much more competent in installing an ethical value system.

Derailer #4: Unrealistic Optimism Pushing ethical transgressions aside, and/or rationalizing them away, serves to exacerbate an already challenging ethical situation. For instance, a male employee makes sexually suggestive advances toward a female employee for the third time. Does the manager choose to ignore the behavior, believing that the male employee will simply stop this offensive behavior? If a manager fails to acknowledge the extent of the transgression or ignores it, nothing will be done to correct the situation or to stop it from recurring. Being optimistic when it is not warranted can derail a manager. Jim Collins’s research on how “good” companies transform to “great” companies, discussed in his book Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, sheds some light on how having an optimistic outlook yet facing the brutal facts can be beneficial. During the course of his research, Dr. Collins’s research team discovered what they came to label as the “Stockdale Paradox.” Research found that leaders of greatness confront the cold hard facts of their current situation while simultaneously optimistically believing that they will prevail in the end, even in the face of the challenges. The “Stockdale Paradox” was named after Admiral Jim Stockdale who was one of the most senior military officers to be held in the “Hanoi Hilton” prisoner of war camp during the Vietnam War. He was held as a prisoner for eight years, suffering torture while maintaining a leadership role by helping other U.S. military captives survive. However, he reported that those prisoners who believed that they would soon be released were the ones who perished first. They 12

Chapter 2: Derailers

were unrealistically optimistic. Individuals who accurately and honestly assessed the facts of their situation, realizing that they would likely be retained for the long haul, yet had faith that they would be rescued, had a better survival rate. What we can take from this is that when we face tough situations, stark reality needs to be honestly assessed and then the individual must cope and hold faith that the situation will work out in the end. Keeping the faith that an ethical course is the best way to go while facing the brutal facts along the way will serve to help managerial leaders avoid becoming unrealistically optimistic. Steering an ethical course often requires managerial leaders to sustain some bumps and bruises along the way. Don’t let your optimism allow others to blind side you with ethical lapses.

Derailer #5: Low Maturity Index If a managerial leader’s response to a situation is not mature— rational, well thought out, and carefully considered—it is likely to be based on personal reaction rather than the reality of the situation. Think of a situation where a friend submits an inflated expense report. Can you rise above your personal desire to protect your friend and make the appropriate response? The inability to put personal reactions aside in favor of carefully considering your response and looking at the brutal facts (as is done in the Stockdale Paradox) will increase the likelihood of inconsistent or ethically unsound decisions. For the past 20 years, I have been assessing the maturity index of managerial leaders. The maturity index is a simple indication of the extent to which a managerial leader responds professionally and with careful consideration to people and situations within their organization, rather than responding on a personal level. I simply ask managerial leaders to estimate their maturity index when it comes to handling challenging situations. I ask them to rate on a scale of 1 to 10 how mature their actions were in a given situation: Were they based on careful consideration and objective facts rather than personal responses? Being able to objectively look at your 13

Value-Centered Ethics

behavior requires a level of self-awareness that serves as a springboard for a broader discussion about ways that an individual can increase his or her maturity index. When applied to ethical situations, we can also identify areas where personal bias and selfinterest might be at play. This low maturity derailer emphasizes the importance of selfawareness in order to deal with ethical challenges maturely. Just being aware that you respond inappropriately to a particular set of circumstances does not mean that you will take a mature course of action when confronted with these situations. Self-awareness needs to lead to behavior change to increase one’s maturity index. Let’s look at your own maturity index. Think of a circumstance in which you were disappointed with your response. Rate your maturity index in this particular situation on a scale of 1 to 10 (“1” being lowest, or “I reacted spontaneously with a reflexive personal response,” and “10” being the highest, or “I reacted on an objective, professional level after carefully considering my reaction”). Ask yourself: 1. Was my maturity index in this situation acceptable to me? 2. Was this response typical of me? Is there a recurring pattern here? 3. How does my maturity index impact my attempts to enhance my ethical leadership? 4. To what extent am I aware of my areas of immaturity? Do I tend to employ concrete actions that foster self-improvement? Facing ethical encounters without being aware of your areas of potential immaturity is like fasting in preparation for a challenging and long mountain climb; you will not have the fuel aboard to sustain your effectiveness. It is simply the wrong approach for the task at hand. Ethical leaders work to be self-aware and to strengthen their areas of weakness, thus enhancing their maturity index. 14

Chapter 2: Derailers

Derailer #6: Cognitive Dissonance In the late 1950s, social psychologist Leon Festinger identified the process of cognitive dissonance. Cognitive dissonance occurs when an individual has attitudes that are inconsistent with one another, or behavior inconsistent with his or her attitudes. Research indicates that people are uncomfortable with this internal conflict and that they work to reduce this tension. Overall, people prefer the comfort of little or no internal dissonance. Ethical managerial leaders can be derailed in their efforts if they try to reduce dissonance by concluding that the dissonant behavior (unethical conduct inconsistent with their values and attitudes) is not truly objectionable. One may also change her attitude toward the reprehensible behavior, or even seek out information that tends to make the unethical behavior seem acceptable. For instance, statements such as “I need my job,” “There is really nothing wrong with X,” or “The benefits to the company are more important than my personal attitude” help reduce internal dissonance. Adjusting one’s attitude to be consistent with one’s unethical behavior is one way of reducing cognitive dissonance, a process that helps individuals justify unethical acts. People do not always attempt to reduce dissonance. If an individual perceives that the dissonance is externally imposed or if rewards are significant enough to offset the dissonance, research indicates that an individual will not be highly motivated to reduce his dissonance and that the issues underlying the dissonance are of little importance. In spite of these conditions, when facing ethical dilemmas, individuals might find ways to bring their behavior and attitudes in line with the abhorrent act. Over time this causes ethical derailment. By staying the course and behaving consistent with his virtuous values and attitudes, however, the ethical managerial leader will have no need to reduce cognitive dissonance.

Derailer #7: Low Behavioral Integrity Quotient (BIQ) The extent to which a person’s actions or behavior are consistent with what he espouses or represents can be called the Behavioral 15

Value-Centered Ethics

Integrity Quotient (BIQ). One’s BIQ rises and falls depending on how much what he “says” matches what he “does.” Your people are very cognizant and sensitive to this “say-do” connection. A manager’s credibility is largely impacted by the extent to which her people observe her doing what she says she will do. Trust within an organization is enhanced by managers and others who have high BIQs. In unethical work environments, people cannot trust that managers or the organization will follow through with what has been verbally represented. One glaring instance of a very low or non-existent BIQ is the example of the top executives of Enron recommending that the employees hold their company stock, while the executives were in fact selling their stock holdings. The emotional and economic impact of these types of disparities between words and actions within an organization are well documented, particularly in the popular press. To avoid derailing with a low BIQ, managers should monitor their “say-do” ratio. Ask yourself regularly, “Am I following up on what I tell others I will do?” Keep a log of key promises, or file them in a tickle file to remind yourself of your follow-up items. Following through will enhance your personal credibility. If your people trust you to follow through with what you represent, they will trust that you will act consistently with the ethical parameters that you set, and you are much more likely to be able to influence them in their behavior as well.

Derailer #8: Poor Accountability When key accountabilities such as clear performance goals, action plans, and behavioral guidelines have not been established, people can more easily go unnoticed in larger groups. The combination of larger groups in work environments without effective performance management systems can lead to ethical derailment. Allowing individuals to reside in large groups without being accountable is an environment for unethical behavior to go unreported. Research shows us that in groups of ten or more, people tend to expend less effort, one theory being that there is less accountability 16

Chapter 2: Derailers

for individual behavior within a larger group. This is called “social loafing.” In these situations, people can sit on the sidelines when unethical transgressions occur. They believe that in the larger group they are somewhat inconspicuous and that their reticence will be hidden. This situation of flying below the participation radar is exacerbated when there are no accountabilities in place. To eliminate this derailer, managers need to design and install performance management systems within their areas of responsibility. An effective performance management system will hold every individual accountable for his or her actions and results. These systems also need to help people focus on what is most important ethically while giving them a sense of accountability. Chapter 7 will provide you with some specific practices to help you improve accountability.

Derailer #9: Misaligned Incentives It is misguided to expect people to act one way when incentives encourage different behavior. In these situations, rewards are not aligned with behaviors. As a result, behavior x is expected but behavior y is rewarded. David Dorsey’s research described in his book The Force shows how an “ethically anchored” marketing strategy can be lost when sales incentives motivate salespeople to “do what it takes” to meet their numbers. In this situation, the pressure and incentives to make sales can overshadow the ethical foundations of the marketing strategy. Rewarding people for making sales numbers but not for taking actions that drive such things as customer satisfaction will encourage focus on sales numbers to the exclusion of customer satisfaction. In his research, Dorsey observed that salespeople “stopped at nothing” to earn a sundry of rewards including bonuses and trips. Salespeople participated in a variety of unethical behaviors, ranging from misrepresenting product value to writing self-serving sales contracts that cheated their employer as well as their customers. They talked Total Quality Management while participating in unethical sales practices. 17

Value-Centered Ethics

On the other hand, when accountability systems contain meaningful job profiles that are aligned with virtuous organizational values, purposeful functional missions, and incentives, behavior is more consistent with the espoused values. When individuals and groups in organizations perceive their work to be important and meaningful, they will be less likely to derail ethically. Matching the skills of individuals to clearly written performance-based job descriptions within a context of virtuous values, while effectively “incentivizing” their actions, will advance ethical behavior. We will explore this more fully in Chapters 7 and 10.

Derailer #10: Low Approachability Index Managerial leaders are vulnerable to bad things happening when they do not receive feedback from their people or are excluded from their organizations’ informal information flow. To learn what is really happening in an organization, it helps to be part of the “grapevine” and hear what is going on in the organization. When a person is not approachable, he has a low approachability index—he is perceived as being unreceptive to input from others. Both good deeds and mischief go unreported and unnoticed. Managers with low approachability indices are operating in information vacuums. When unethical behavior occurs, these managers run the risk of being the last to know about the transgression, and the first to be blamed for it. A manager is unapproachable when he displays ineffective interpersonal influence skills such as failing to listen, avoiding conflicts, and overlooking feedback opportunities. Chapter 5 will provide ten practices that you can use to enhance your interpersonal influence skills and help you boost your approachability index. Approachability builds good will and trust within the organization. As a starting point in improving your approachability, I suggest that you rate your approachability on a scale from 1 to 10 (“10” being the highest, or most approachable). Then indicate what specific 18

Chapter 2: Derailers

approach behaviors you will practice to enhance your score. This can be done regularly and frequently. A self-rating of less than “8” signals the need to work on your approach behavior. Even simple behaviors tend to pay large approachability dividends such as making appropriate eye contact, smiling, and warmly asking openended questions.

Derailer #11: The Need to be Liked Research indicates that ethical lapses are more often over looked when the person who witnessed the infraction wishes to be liked by the transgressor. When a managerial leader’s need to be liked exceeds her business objectivity, ethical problems are more likely to occur or to be ignored. This situation is particularly acute for those recently promoted into management within the same organization. Their ability to say “no” to friendly former peers is compromised by their need to be liked. The desire to be liked adversely affects the ethics of an organization and drains the financial bottom line. This can be seen readily in retail situations where a store manager allows too many hours of labor to be used relative to sales volume. Over time, excessive labor costs begin to eat into profit margins. Organizational surveys in these situations often find that the manager accountable for the labor decision has been persuaded by his employees to give them extra work so that they can pay personal expenses or handle personal obligations. When sales volumes do not justify the labor costs, yet the store manager yields to these overtures, the manager’s need to be liked is eroding the profit and loss statement. The manager is also misallocating at least two key resources: time and money. Organizational waste such as this is another form of unethical behavior. One way to stem this problem is for the manager to distance himself from socializing with his subordinates until he can establish some objective boundaries. Another successful approach is to take assertiveness training and act warmly and assertively. Finally, in these situations, I have often had newly appointed 19

Value-Centered Ethics

managers read Alberti and Emmons’s book, Your Perfect Right. This book provides excellent advice on how to say “no” while preserving a quality relationship. It presents a dilemma for some people, however, to establish professional boundaries, yet remain approachable.

Derailer #12: Hypercompetitiveness Winning without regard to the cost can lead to jail. Individuals and organizations can take on a hypercompetitiveness nature that puts profit before principle. These people and work cultures look at all business transactions as opportunities to “win”; the end provides justification for the means. Hypercompetitiveness shows up particularly in business negotiations. Over-reliance on this style causes business relationships to erode, alliances to shift, and ethics to drift. Collaboration, compromise, and avoidance are pushed aside in favor of forcing deal points and positions on the other party. Over time, hypercompetitiveness will destroy good will and open the door to winning at any cost, using whatever behavior is necessary. This situation is an invitation for questionable ethics to walk into the boardroom and the back rooms of organizations. As we will see in Chapters 4 and 5, virtuous values can drive negotiations to create an ethical, relationship-enhancing business environment. Hypercompetitiveness is for those who are shortsighted and willing to bend the rules to win. Although hypercompetitiveness might result in short-term wins, over time it sets one up for business failure. Healthy competition driven by a set of virtuous values, which include collaboration and compromise along the way, sets the stage for long-term business success.

Derailer #13: “Satisficing” When we are confronted with a complicated problem, most of us react by reducing the problem to understandable terms—we simplify. As human beings, we are often unable to cognitively process all the information needed to reach an optimal decision. Instead, we 20

Chapter 2: Derailers

“satisfice”—we pursue solutions that are satisfactory and sufficient rather than take the time to rationally determine the optimal choice. Full rationality gives way to bounded rationality, which finds us considering the essential elements of a problem without taking into account all of its complexities. This will often lead to solutions that are less than optimal. We are often taught a six-step rational decision-making model in college logic courses. We are taught to do the following: 1. Define problems 2. Identify decision criteria 3. Allocate weights to the criteria 4. Develop the alternatives 5. Evaluate the choices 6. Select the optimal choice Unfortunately, we cannot take all six steps in real-world problem solving. We tend not to maximize decision outcomes neatly. “Satisficing,” as noted by Professor Stephen Robbins in his book Essentials of Organizational Behavior, leads us to alternatives that tend to be easy to locate and appear more visible than subtle to the problem solver. “Satisficed” solutions tend to be familiar and close to the status quo. When grappling with complex ethical considerations, this approach to decision making might not produce the best solution. When addressing complex ethical dilemmas, managerial leaders need to be aware of the constraints brought about through the process of “satisficing” an ethical solution—think outside the box. The best alternative to an ethical challenge might be overlooked if “satisficing” is used inappropriately. One of the best ways to guard against arriving at less-than-optimal solutions to ethical challenges is to discuss the situation with other trusted colleagues. Have them play devil’s advocate. Ask them to challenge the course of action you determined through “satisficing.” This dialogue can improve the quality of your ethical decision making. 21

Value-Centered Ethics

Derailer #14: Semantic Softness We can disguise the offensiveness of unethical acts by using euphemisms or gentler characterizations to describe wrongdoings. This process helps the wrongdoer or those associated with the unethical behavior disassociate themselves from the transgression. A phrase such as “helped her to make a career decision” is used to describe a firing or “inappropriate allocation of financial resources” is used to describe what we all know to be stealing. These types of softer, gentler characterizations serve to reduce the anxiety of those in proximity to questionable ethics. It is a dishonest way to communicate and defuses discomfort that might otherwise be brought to bear on those involved with ethical mischief. It can derail the needed intensity of ethical constraints. The antidote is to talk straight and to avoid euphemistic labeling or verbally recharacterizing unethical misdeeds.

Derailer #15: Over-confidence Over-confidence is the tendency to perceive that your abilities are greater than they are in reality. Your self-perception does not match objective reality as seen by others. You can discount the usefulness of others’ perceptions, causing you to overlook insights and talents as resources. This tension between the over-confident managerial leader and those around him can keep the most appropriate ethical choice from surfacing. The decision maker is blinded by his own convictions regarding the best course of action. As with managerial leaders who have a low approachability index, over-confident decision makers deny themselves fresh perspectives and perhaps better solutions to ethical problems. The over-confident manager will typically be perceived as arrogant. When this occurs, research tells us that the incumbent is also headed for career derailment. Arrogant managerial leaders with performance problems, including allowing, overlooking, or causing ethical concerns, are likely to receive less understanding and support from others in their time of trouble. Their air of over-confidence and arrogance not only 22

Chapter 2: Derailers

derails the practice of quality ethical decision making, but can destroy their career along the way. Professor Richard Clark at the University of Southern California describes overconfidence as a disease. Overconfident people significantly overestimate their ability to perform in specific areas, and fail to take personal responsibility when their performance falls short. According to Clark, overconfident people can be taught new strategies to overcome their overconfidence. Coaching an executive to keep his confidence appropriately contained might help him act more ethically when facing ethical challenges. One tool to counterbalance this unproductive and potentially lethal tendency is for the over-confident managerial leader to catch herself when preparing to make declarative “This is the way it is” statements, and replace them with more open-ended “What do you think?” type inquiries. If practiced conscientiously, this communication tool can help the overly confident manager begin to consider others’ perspectives. Accepting input from other people will improve the manager’s ethical decision-making ability and the ethical problem-solving climate within the organization. Taken together, these 15 derailers represent a potentially lethal package of reasons why unethical behavior might be unwittingly committed and sustained. To assess how you rate in each of these areas, take the Ethical Behavior Derailment Self-Assessment Survey, found below. Remember that your tendency to derail can be offset by your ability to espouse and affirm a system of virtuous values that are aligned with a set of managerial leadership actions and roles that are, in turn, reinforced by selective behavioral guidelines. Before we discuss virtuous values in Chapter 4 and review the various managerial leadership action roles that need to be aligned with these values, in Chapter 3 let’s discern why we should care about managing with ethics in mind. While each of the derailers represents a challenge to acting ethically, the intrinsic benefit of acting ethically will hopefully be a source of motivation to get and stay on track ethically. 23

Value-Centered Ethics

Ethical Behavior Derailment Self-Assessment Survey Instructions: Use this survey to rate your tendencies to act in ways described when dealing with ethical situations. For each area, rate yourself on a scale of 1 to 10 in the spaces provided. “10” means that you rarely take this type of action, if at all, when dealing with ethical situations, and “1” means that you take this type of action almost always. Derailment Area

Self-Rating

1. Establishing clear systems, procedures, and mechanisms to proactively handle ethical issues.

________

2. Espouse and affirm a set of virtuous values.

________

3. Act persuasively.

________

4. Display realistic optimism.

________

5. Demonstrate a professional response rather than respond personally.

________

6. Consciously align attitudes and behavior.

________

7. Align words with actions.

________

8. Establish clear performance accountabilities.

________

9. Accurately report performance results.

________

10. Be approachable to others.

________

11. Maintain business objectivity when making decisions affecting people.

________

12. Consider the appropriateness of the means taken to be successful.

________

13. Consider sufficient information and alternatives before deciding.

________

14. Use straightforward words to describe unethical acts.

________

15. Act with appropriate levels of confidence.

________

24

Chapter 2: Derailers Overall General Interpretation Guidelines: This self-assessment survey is intended to help you examine ways in which you react to situations involving ethics. Any area of derailment with a rating of “8” or higher should be reviewed to determine potential opportunities for self-improvement. Any item rated “2” or lower is likely a strength. Use this self-assessment tool as a springboard to discuss with a trusted colleague or performance coach your reactions to ethical challenges.

25

This page intentionally left blank

Chapter 3

Why Should I Care? You ask, “Why should I manage with ethics; everybody cheats? How can I get ahead if I am always honest and doing the right thing?” Contrary to what you might believe, there are many sound business reasons to manage with ethics. Reasons range from the long-term positive economic impact on an organization, to improving the quality of business results, to the simple assertion that managing with ethics is the right thing to do.

Reason #1: It Makes Economic Sense A mounting body of evidence shows that emphasizing the “softer” side of business, including ethics, positively influences the harder traditional bottom-line side. By listening to employees, effectively recognizing their work, and practicing good ethical behavior, “hard measures” such as operating earnings, ROI, and stock price have received a boost. As businesses use applied research frameworks such as the Linkage Research Model of Jack Wiley and colleagues, we will likely see even more evidence of the economic benefits of ethical organizational behavior. Using Wiley’s linkage research model, or what I call “Managerial Leadership at 12 O’Clock,” we can see how a coherent approach to ethical management can drive employee results, customer results, and financial outcomes. These relationships are depicted in Figure 3-1. This linkage model illustrates the effect of ethical managerial practices: Ethical management practices impact employees who in turn influence customers, resulting in financial impacts. This book will provide you with a framework that you can adopt into your organization—at 12 o’clock. As we will see, ethical managerial leadership includes a clear set of virtuous values, a set of managerial practices, and a set of behavioral guidelines. These components will be reviewed in subsequent chapters. 27

Value-Centered Ethics

Figure 3-1: Managerial Leadership at 12 O’Clock 12 o’clock

Ethical Managerial Leadership

Business Outcomes Profitability Increased Revenues Market Share Retention/Loyalty

Employee Results Productivity Satisfaction Retention Ethical Behavior 3 o’clock

9 o’clock

Customer Results Loyalty Satisfaction Ethical Behavior

6 o’clock

With the recent ethical scandals in some U.S. corporations, we have seen organizational leaders proceed from 12 o’clock to 9 o’clock without concern for employee or customer results. They are interested in short-term results and forego the long-term economic benefits of building an ethical culture by impacting employees and their customers with ethically sensitive practices. There is great temptation, and one can likely see short-term financial success when pursuing a “12 to 9” strategy rather than a “12 to 3 to 6 to 9” approach. The “12 to 9” strategy disregards the long-term outlook and tends to inflict damage on the organization as well as the managerial leader’s career. Employees who are ignored become disgruntled and 28

Chapter 3: Why Should I Care?

might in turn fail to adequately serve customers. Over time, this erodes business success. Research supports the premise that ethical management can enhance the economic bottom line. Dr. William Thompson reports on a review of 207 major companies over 11 years, which found that the top 20 more ethically oriented companies performed dramatically better on a variety of “hard measures” including ROI, stock price, and earnings than the bottom 20 companies. Also, Professor Wisner of Thunderbird’s School of Management has developed ways to quantify the business impacts of “good” ethical practices. Jerald Greenberg, professor of management and human resources research at Ohio State University, Columbus, suggests that ethics programs can help reduce employee theft. With estimates of the cost to U.S. companies of internal fraud reaching $400 billion a year, we can see how unethical behavior can damage profitability. Dave Ulrich and Norm Smallwood’s book Why the Bottom Line Isn’t: How to Build Value Through People and Organization details how many aspects of the “soft” side of managerial leadership often associated with ethical practices drive the “hard” side of organizational effectiveness. Financial metrics such as ROI, stock prices, and earnings are connected to softer practices like values, feedback, and teamwork. Growing evidence points to the wisdom in pursuing ethical leadership for long-term economic success.

Reason #2: It Improves the Quality of Results All results are not created equal. As we learned in the last chapter, hypercompetitiveness can focus managerial leaders on the end goal only. For instance, if a company’s high profit numbers are based on inflated revenue numbers, the profitability is not a quality result. To the contrary, an organization that is strong ethically and has not misstated revenue numbers might have a lower profit margin, but that organization’s success is a higher quality success than the former. Focusing on results from a quality perspective can benefit the organization by improving the quality and strength of performance outcomes. Organizational results, which are the intended areas of 29

Value-Centered Ethics

impact or accomplishment, can be viewed through an “ethics filter” to ensure that there is quality assurance. In examining results, consider the following six dimensions: 1. Active learning. Do individuals in your organization learn anything or are they going unchallenged and asked to do the same old things? An ethical workplace values its employees and respects their dignity. To this end, the ethical organization will help people find challenges that use their strengths. Employees will be more satisfied in their work and will bring more value to an organization if they are challenged and working in areas that suit and utilize their strengths. This idea has been researched by Mihaly Csikszentmihalyi and is called finding “flow,” as detailed in his book Good Business: Leadership, Flow and the Making of Meaning. Organizational results attained through active learning of the organization’s employees will be stronger and of higher quality. 2. Values driven. Results, and the actions taken to realize them, need to be consistent with and linked to a core set of values. Ideally, these values will contain elements guiding constructive behavior. Managerial leaders who meet their business performance targets, but fail to behave consistently with organizational values, detract from their overall effectiveness. For example, if the organization values customer satisfaction, accelerating sales while disregarding the customer service necessary to guide the customer in the proper use of the product might result in a shortterm increase in sales volume, but cause customer dissatisfaction. Unhappy customers might over time leave to do business with a competitor. Organizational values should guide everything managerial leaders and employees do in attaining key results. Values become the integrating factor that helps the enterprise jell, and good results consistent with organizational values will be quality results. 3. Based on ethical behavior. Ethical behavior is required consistently within an organizational community and by each of its members to attain and sustain quality results. Unethical behavior 30

Chapter 3: Why Should I Care?

in an organization is a breeding ground for a litany of problems. Although unethical behavior may show short-term results, at the extreme, “results” attained through unethical behavior on a strategic or organizational-wide basis could lead to the downfall of an organization. Think Enron, WorldCom, Adelphia, Tyco, Arthur Andersen. Results that are based on unethical behavior will not be sound and will not further the building of a solid organization. 4. Important to a stated purpose. A quality result is relevant to and furthers an organization’s purpose. Without a positive connection between work and organizational purpose, what we do each day becomes less meaningful. People in jobs from the top to the bottom of an organization’s structure need to act purposefully. Even a store janitor can have a purposeful, meaningful job, knowing that his contribution will further the retail organization’s stated purpose to provide a clean and orderly shopping experience for its customers. His results—a clean and orderly store—are important to the organization’s stated purpose. Employees want and need to know that what they are doing makes a valuable contribution and that their efforts are appreciated. Results that are not related to a stated organizational purpose can be less meaningful, if not irrelevant, to the organization. 5. Measurable. For results to be meaningful and credible, they need to be measurable. Your results need to be assessed and measured in order to establish whether they meet the thresholds of success. Without measurement, success is just a label and has no meaning. Quality results will be measurable based on some key measure. Even “soft” results can be measured. 6. Balanced. When setting performance targets or key result areas for an organization (or group within an organization), managerial leaders need to balance various factors that together determine success for that organization or group. Results need to be monitored in various areas—beyond the traditional focus on short-term financial goals alone. To be balanced, key result 31

Value-Centered Ethics

areas should include not only hard results such as revenues or cost containment measures, but also softer measures such as employee and customer satisfaction. A balance of key result areas being monitored enhances the quality of results by offering broader perspective. Robert Kaplan and David Norton developed the concept of the Balanced Scorecard in their book by the same title, which offers four key perspectives for focusing results to provide a balanced measure of success. The Kaplan-Norton Balanced Scorecard focuses on four areas of measurement: financial, customer, internal business processes, and potential (learning growth). This broader perspective enables more long-term strategic thinking about what to pay attention to and how to manage what is in your measurement system. Ethical managerial leadership can improve the quality of your business results. For results to be sound and have meaning over time, they need to be based on active learning of employees, driven by organizational values, based on ethical behavior, important to a stated purpose, measurable, and balanced.

Reason #3: It Is the Socially Responsible Choice In keeping with a growing trend to look beyond shareholder value to a broader stakeholder perspective, organizational ethical behavior becomes the socially responsible thing to do. Imagine for a moment that you are living next door to neighbors—one on each side of your home—who frequently interfere with your quality of life. They erect fences that encroach onto your property, cut down trees on your property in proximity to the property line, and rummage through your garage when you are not home. They are not good neighbors and their irresponsible behavior does not engender goodwill. Likewise, organizations are not acting responsibly if they ignore their stakeholders by acting contrary to the stakeholders’ interests. Just think for a moment about the “neighbor” impact of Enron’s, Tyco’s, and WorldCom’s unethical behavior on their respective communities, workforces, 32

Chapter 3: Why Should I Care?

and supporters. Acting ethically is the socially responsible choice to help advance strong profitable ties to key stakeholders. Engaging in socially responsible action can range from meeting commonly accepted ethical principles of good behavior to attempting to solve social problems such as education, poverty, and unemployment. Tim Hatcher, in his book Ethics and HRD: A New Approach to Leading Responsible Organizations, categorizes social responsibility for businesses into four major areas of influence: ✥

Human resources—relating to development and support of people

✥

Community, cultural, and societal engagement and philanthropy

✥

Environmental protection, waste reduction, and sustainability

✥

Product, consumer, and service contributions and protections

To act responsibly in these areas, an organization would establish policies and practices for each. For example, relating to human resources, a socially responsible organization will provide equal opportunities in hiring and promotion while providing its employees with appropriate training and development opportunities that advance organizational and personal career goals. Socially responsible organizations are driven by managerial leaders who understand the value of service and are sincerely concerned about their stakeholders. They see the reciprocal nature of this relationship, and they are as concerned with what they give to these relationships as they are with what they receive from their stakeholders. There appears to be a strong connection between ethical managerial leadership and the application of resources to employee training, product quality, and service management. Socially responsible organizations have enjoyed unanticipated recognition: Business Ethics published their list of the “100 Best Corporate Citizens,” America’s most profitable and socially responsible major public companies.

Reason #4: It Makes Humanistic Sense After surveying over one million employees around the world from a wide range of companies and industries, the Gallup organization 33

Value-Centered Ethics

identified a set of people-oriented practices that create a healthy and productive workplace. Organizations providing such an environment would provide their employees: 1. A clear understanding of what is expected of them at work 2. Materials and equipment to do their work well and correctly 3. The opportunity to do what they do best every day 4. Recognition for doing work at least once every seven days 5. Care for them as individuals 6. Encouragement of their development 7. Respect for their opinions 8. A tie between the mission/purpose of the company and the importance of the particular job 9. A culture of commitment among workers to do quality work 10. The opportunity at work to learn and grow within a 12-month period These practices all contribute to creating and sustaining an ethical, people-oriented work environment. As with social responsibility, we see that an effective managerial leader drives this ethical result. This humanistic or “softer side” of business bonds with the “harder side” to help create and sustain an effective and ethical workplace. An effective managerial leader must integrate these two sides of business.

Reason #5: It Shapes and Sustains Organizational Value Systems Values have a tremendous influence on organizational behavior, and a managerial leader’s value system will set the standard by which others will behave. Kevin Freiberg writes in Executive Excellence that “Great leaders understand that their capacities to shape values and educate through vivid, living, personal example ultimately directs the course of a firm.” Simply put, managerial leaders have a major influence on their people and have the power to create and sustain organizational values. 34

Chapter 3: Why Should I Care?

Values espoused and affirmed by managerial leaders have been found to have a substantial influence on the values displayed within an organization. Consequently, managerial leaders are key players in developing the ethical climate within their organizations. Herb Kelleher at Southwest Airlines, and Fred Smith at Federal Express imparted their strong values on their respective organizations. In turn, these organizations are considered among some of the most highly respected companies in the world. Strong managerial leadership values become visible evidence of what is important as they are talked about and displayed by the leader’s example. Core values help instill confidence, build teamwork, and provide guidance in good and bad times. Managerial leaders have the opportunity on a daily basis to influence the ethical climate within their companies by shaping and managing their organizations’ value systems. Without this leadership, an organization will develop its own climate of ethics, or the lack thereof, by default. Rest assured that without strong ethical leadership, the organization’s value structure will not be what you intend.

Reason #6: It Strengthens Strategy and Competitive Advantage In the hands of an ethically minded managerial leader, strategy takes on an expanded meaning to include advocating and “operationalizing” core values throughout the organizational network of key stakeholders. This ethical tone, supported by a set of relevant core values, is in keeping with the public’s enhanced expectations for ethical conduct on the part of businesses and their leaders. The earlier mention of social responsibility gives voice to the trend to expand the definition of ethical conduct beyond the traditional ways of thinking about it. With the proper positioning of its ethical approach, an organization can distinguish itself to achieve a competitive advantage. Providing the marketplace with a relevant and focused message that includes how an organization handles ethical challenges can cause otherwise cautious customers to come aboard and help attract and keep good 35

Value-Centered Ethics

employees. Strategic goals in a context of virtuous values can set a welcoming and reassuring tone to potential customers and employees alike, particularly when there is a visible infrastructure in place to help operationalize the strategy. When key stakeholders know where things are going and that the course is aligned with core values that are aligned with ethical practices, confidence and loyalty go up. This situation strengthens a firm’s strategic position and helps achieve competitive advantage.

Reason #7: It Builds Trust as an Organizational Resource Trust is the foundation of our free market system and our business relationships. Knowing that managerial leaders are trustworthy in the eyes of their employees and other key stakeholders builds trust as an organizational resource. Ethical behavior and good corporate citizenship are the result of having a trusting workplace. Establishing trust requires consistent behavior over time. Truthfulness is a necessary component of trustworthiness. In their pursuit of the truth, managerial leaders need to determine which levels of “truth telling” are acceptable to them. There are three fundamental levels of reporting reality. First, you can report reality as accurately as you are capable of doing. For example, if a key report asks for performance feedback regarding his writing abilities and he is an excellent writer, you can affirm his writing skills by telling him that he is an excellent writer. Second, when asked for feedback from the key report, you can elect to withhold information about his writing. Finally, you can choose to distort reality or lie for some selfserving reason (e.g., tell the report that his writing skills are poor). Clearly, the last approach is wrong and will not engender trust. Ethical leaders can be counted on to report reality as they see it or, if and as desirable, to withhold information for ethical or humanistic reasons. They do not deliberately distort the truth or lie to their stakeholders, as did the leadership at Enron and WorldCom. Ethical principles should prevail over the pursuit of profits, at any cost. Consistent truthfulness helps build a sense of trust. 36

Chapter 3: Why Should I Care?

To be trustworthy, you also need to be approachable—no one will speak openly and often to you if you are unapproachable. If you are not overly approachable, consider enhancing your approachability. Simple things such as making more eye contact, asking more openended questions, and inviting feedback from others on some of your ideas or plans will help you be more approachable. Trust is largely a behavioral event that is earned over time and is necessary to create and sustain an ethical organizational climate. Many factors are relevant to building trust, including truthfulness and approachability. By managing with ethics on a consistent basis, you are also building an environment of trust for your stakeholders.

Reason #8: It Helps Avoid Civil and Criminal Penalties While laws and regulations are important to a civilized society, they do not provide the only structure for managerial leaders to steer their organizations ethically. External laws and regulations provide an “outside-in” approach to guiding ethical behavior, targeting compliance tactics and legal consequences to deter unethical organizational behavior. This book takes a more “inside-out” approach to managerial ethics, stressing virtuous values and managerial action roles to encourage ethical behavior. It would be naïve, however, to ignore the role that laws play in deterring unethical conduct. In fact, research indicates that a combination of the inside-out and outside-in approaches to managing ethics is likely to be most effective to encourage ethical behavior. On the deterrence side, two legal acts that have impacted business practice are the Sarbanes-Oxley Act (SOX) of 2002 and the U.S. Federal Sentencing Guidelines. SOX is an attempt to legislate ethical business practices of publicly traded companies, CPA firms, auditors, attorneys, brokers, dealers, and others. There are a multitude of new requirements relating to such areas as the treatment of whistle-blowers, certification of financial reports, and assessment and management of risks. (For additional details, see the American Institute of Certified Public 37

Value-Centered Ethics

Accountants Web site at and the Securities and Exchange Commission’s Frequently Asked Questions Web site at .) The U.S. Federal Sentencing Guidelines dramatically reduce the fines imposed on companies that have implemented an effective ethics program to “prevent and detect violations of law.” The guidelines are intended to promote “good corporate citizenship, fairness in corporate sentencing, and incentives for companies to initiate crime controlling actions.” A company’s ethics compliance program should seek to deter unethical behavior as well as punish unethical behavior. The program should also include oversight and engagement by high-level personnel and effective communication to employees at all levels. (For additional information, see United States Sentencing Commission Website at .) For a more sophisticated understanding of the Sarbanes-Oxley Act, the U.S. Federal Sentencing Guidelines, and other relevant laws, consult qualified legal counsel. A detailed review and discussion of these and other laws relating to ethical conduct are beyond the scope of this book.

Reason #9: It Advances Managerial Leadership as a Profession Because of their position of influence, managerial leaders have an enormous ethical obligation to manage their people professionally. This requires a systematic framework and set of ethically sensitive practices secured by a group of virtuous values. As they go about establishing an ethical climate within their organizations, leaders need to be especially conscious of the values and practices they model. Managing professionally on a performance basis requires the systematic application of frameworks and tools. Frameworks help the managerial leader understand the behavior they are observing, while tools assist in changing behavior. To be perceived as a professional endeavor, ethical leadership—as a subset of managerial 38

Chapter 3: Why Should I Care?

leadership—needs to embrace a system of frameworks and tools. This book is intended to offer a practical framework and set of tools for the practicing manager to use as they strive to achieve the highest standards of ethical leadership.

Reason #10: It Is the Right Thing to Do Managing with ethics is the right thing to do in terms of treating your employees with the dignity and respect they deserve, building an organization with a solid foundation from which to grow, and preserving an organization that is a contributing member of society. Ultimately, the managerial leader will become, if not already, a good, worthwhile person. When virtuous values are practiced, they become integrated into one’s being. The more we tell the truth, for example, the more truthful we become. Likewise, by being fair to others, we become more just. As the managerial leader embraces virtue, it becomes a self-reinforcing proposition where doing the right thing becomes the right thing to do. In the end, acting to produce goodness becomes the overriding reason for managerial leaders to connect with ethics. This connection becomes its own reward and enriches the lives of those within the ethical leader’s sphere of influence. Taken together, these ten reasons represent a potential package of motivators to help managerial leaders put forth and sustain the effort at managing ethically. While every reason cited might not be a motivator to you personally right now, you will certainly find some combination of these motivators compelling. To assess how you rate in each of these areas, complete the Motivation to Manage Ethics Self-Assessment Survey found below.

Motivation to Manage Ethics Self-Assessment Survey Instructions: Use this survey to identify and rate potential sources of motivation for you in your efforts to manage ethically. For each statement, rate yourself on a scale of 1 to 10 in the spaces provided. “10” means that you are extremely motivated by this statement, and “1” means that the statement provides little to no motivation for you.

39

Value-Centered Ethics Motivational Area

Self-Rating

1. Managing ethically will improve our economic bottom line.

________

2. Ethical management enhances the quality of the results.

________

3. Managing ethically is the socially responsible thing to do.

________

4. Managing ethically will improve our humanistic bottom line.

________

5. Shaping and sustaining values is integral to managing ethically.

________

6. Ethical management strengthens strategy creating a competitive advantage.

________

7. Building trust helps establish an ethical culture and competitive advantage.

________

8. Ethical management can help you avoid legal problems.

________

9. Ethical management advances professionalism.

________

10. Managing ethically is the virtuous and right thing to do.

________

Overall General Interpretation Guidelines: This self-assessment survey is intended to help you identify and measure the intensity of various potential sources of motivation for managing ethically. Any motivational area with a rating of above “8” should be entertained as a potential motivating factor. Use this self-assessment tool as a springboard to discuss with a trusted colleague or performance coach your sources of motivation that help you sustain your efforts at managing ethically. Are there other sources of motivation for you that are not covered on this self-assessment?

40

Chapter 4

Getting to the Heart of the Matter At the heart of ethical managerial leadership are virtuous values combined with a reasoned approach to managing professionally and selected behavioral standards. Virtuous values offer the managerial leader a basis for telling the difference between ethical and unethical behavior and steering an ethical course of action. A reasonable and systematic approach to management, when supported by the advocacy and affirmation of a set of virtuous values, helps ensure that organizational resources, especially your people, are managed professionally with ethics. Behavioral standards underscore and encourage ethical action. Taken together, these components support an integrated ethical approach to managerial leadership.

Values and Behavior There is a well-used axiom in organizational behavior thought that says values ultimately drive our behavior. Values are integral to attitude formation and how we respond to people and situations. In a nutshell, values exert influence over our attitudes, and our attitudes influence our behavior. This connection between values, attitudes, and behavior forms a behavioral chain:

41

Value-Centered Ethics

V– A– B Chain

Values (Basic Convictions) å Attitudes (Judgments of People/Situations) å Behavior (Observable Actions) When there is alignment between an individual’s values, attitudes, and behavior, strong and predictable behavioral patterns can be established. This connection can be seen in Figure 4-1 using a non–business-management example.

Figure 4-1: Values å Attitude å Behavior Chain Example Value Protection of the Environment

Attitude Off-shore drilling in California is bad

Behavior Write and send checks to a political action organization fighting against off-shore drilling

As in the example in Figure 4-1, people typically see alignment between their values, attitudes, and behavior. This condition creates stability and peace of mind in knowing that you are acting in an integrated way. As we discussed in Chapter 2, misalignment or inconsistencies between values, attitudes, and/or behavior can produce a state of cognitive dissonance, which can cause a person to adjust behavior or attitudes to eliminate this inner conflict. This can cause ethical behavior to derail. Leading author and leadership expert Ken Blanchard asserts that misalignment between values and practices causes “an energy drain that sabotages” productivity. 42

Chapter 4: Getting to the Heart of the Matter

Blanchard expands this thought to say that when values and practices are aligned, energy is freed up and individuals are encouraged to act in an integrated way. Values are a key component of effective managerial leadership. In fact, values serve as the bedrock of managerial leadership. Research has provided seven ways in which values affect leaders1: 1. Leaders’ perceptions of people and situations are affected by their values. 2. Leaders’ solutions to problems are influenced by their values. 3. Values are integral in interpersonal relationships. 4. Values affect perceptions of individual and organizational successes. 5. Leaders’ acceptance or rejection of organizational stressors and goals are affected by their values. 6. Personal values may affect managerial performance. 7. Values offer a basis for differentiating between ethical and unethical behavior. The last finding is pivotal to our approach to ethical managerial leadership. Ethical choices and behavior are linked to virtuous values. We will see shortly how a subset of managerial leadership values—that is virtuous values—connect to the formation of ethical behavior or how their absence can open the door to ethical transgressions. In a real ethical dilemma, a leader’s inner resources, guided by his or her core values, are called upon to make decisions and chart courses. Not surprisingly, managerial leaders with strong value systems behave more ethically than those with less clear or weaker ethical convictions. Without a strong value system, the decisions are not as clear, and the ethical path not as obvious, increasing the likelihood 1England,

G.W., & Lee, R. (1974). The relationship between managerial values and managerial success in the U.S., Japan, India and Australia. Journal of Applied Psychology, 59(4), 411–419.

43

Value-Centered Ethics

that unethical choices are made. In the same vein, leaders need to clarify and be aware of their own value system in order to communicate their values to others. The goal is to instill values in your people so that when they are presented with ethical decision points or dilemmas, they too will make choices or behave in ways that are consistent with those values. Ultimately, values would be espoused company-wide for consistent results throughout your organization. Strong core values at many of the companies ranked among the most admired in the world have contributed to: ✥

Building trust and confidence

✥

Increasing accountabilities

✥

Creating a spirit of togetherness

✥

Steering things in the right direction

✥

Creating and sustaining competitive advantage

Values create a blueprint for practicing the art and science of managerial leadership.

Universal Virtuous Values Some researchers state that certain values are critical to the value systems of effective leaders. More specifically, researchers suggest that a subset of managerial leadership values, called virtuous values, significantly influence ethical leadership and fellowship. These virtuous values seem to align with ethical behavior. Professor and world-renowned researcher Martin Seligman of the University of Pennsylvania has identified a set of core virtuous values in his book Authentic Happiness that seem to have universal appeal. Dr. Seligman writes, “While psychology may have neglected virtue, religion and philosophy most assuredly have not, and there is astonishing convergence across the millennia and across cultures about virtue and strength. Confucius, Aristotle, Aquinas, the Bushido samurai code, the Bhagavad-Gita, and other venerable traditions disagree on the details, but all of these codes include six core virtues” (page 11). Seligman’s universally accepted virtues are: 44

Chapter 4: Getting to the Heart of the Matter ✥

Wisdom and knowledge

✥

Courage

✥

Love and humanity

✥

Justice

✥

Temperance

✥

Spirituality and transcendence

Each of these core virtues can be further broken down for the purpose of classification and measurement. For example, Seligman subdivides courage into valor, perseverance, and integrity. The consistency of thought around these core virtues across “thousands of years and among unrelated philosophical traditions” is amazing. Professor Seligman’s teachings on the six core virtues support what other foremost leadership authorities have discovered. For example, Jim Kouzes and Barry Posner, authors of The Leadership Challenge, have found that honesty is the most admired characteristic of leaders. This is further supported by J. G. Clawson in his book Level Three Leadership: Getting Below the Surface where he asserts that honesty and integrity create the moral basis of effective leadership by fostering truth telling, promise keeping, fairness, and respect for the individual. Justice, personal restraint, concern for the common good, and courage, as talked about by Max DePree in Leadership Jazz, are also important virtuous leadership values. Likewise, Ken Blanchard and N. V. Peale in The Power of Ethical Management argue that appropriate personal values produce ethical management, as does Steven Covey in his approach to principle-centered leadership. Seligman’s values can be applied to the business environment and can serve to guide managerial leaders in making ethical decisions, solving ethical problems, and resolving questions of right and wrong. I have adapted Professor Seligman’s work to the study of ethical managerial leadership. In my study of ethical managerial leadership, I have made modifications to Seligman’s labeling of his six core virtues (I use the mnemonic device WSJ,TLC or Wall 45

Value-Centered Ethics

Street Journal, Tender Loving Care to remember these), as shown in Figure 4-2. Following Figure 4-2 is a summary of my translation of Seligman’s six virtues into Six Core Virtuous Values for Ethical Managerial Leadership.

Figure 4-2: Translation of Seligman’s Virtues Seligman’s Universal Virtues

Kerns’s Adaptation

1. Wisdom and Knowledge

1. Wisdom and Knowledge

2. Temperance

2. Self-Control

3. Justice

3. Justice and Fair Guidance

4. Spirituality and transcendence

4. Transcendence

5. Love and humanity

5. Love and Kindness

6. Courage

6. Courage and Integrity

Wisdom and Knowledge Wisdom comes from capitalizing on one’s experiences to interpret information in a knowledgeable manner to produce wise decisions. Ethics are buoyed by wisdom and knowledge. A prerequisite to doing the right thing when facing an ethical dilemma is knowing the difference between right and wrong and deciding what to do based on wisdom and knowledge. Self-Control The ability to use self-control to avoid unethical temptations is a core virtuous value. The capacity to take the ethical path, especially when faced with options that would provide personal gain, requires a conviction to the value of acting with temperance. Ethical people say “no” for the good and benefit of the organization, even when self-interest would seem to supersede. 46

Chapter 4: Getting to the Heart of the Matter

Justice and Fair Guidance People around the world have a keen sense of what is fair and unfair. When individuals perceive that they receive a fair return for the amount of energy and effort expended, they believe that justice is served. A leader’s commitment to justice is tested continually, for example, with the allocation of organizational resources. Are certain individuals and groups given special treatment without regard to objective criteria? Special treatment without an objective rationale will be perceived as unfair. On the other hand, ethical leaders value and embrace fairness and justice, and make decisions consistent with these values. Transcendence Ethical leaders perceive omnipotence, recognizing that there is something beyond the individual that is more permanent and powerful. Without this value, one might tend toward self-absorption and egocentricity. Leaders who are motivated predominately by self-interest and exercising personal power often fail to see the bigger picture and can have restricted effectiveness and authenticity. Love and Kindness Social scientists have documented different types of love. Love and kindness within an organization are expressed through words and deeds; “love” in the organizational context refers to an intense positive reaction to another co-worker, group, and/or situation. People and situations can evoke loving and kind feelings, sensations, images, and thoughts. By showing love and kindness toward their people, managerial leaders are expressing their value of people and may in turn engender love and kindness from others. This is one way for managerial leaders to build goodwill that can be drawn upon in times of conflict. An organization “with heart” allows for the expression of love, compassion, and kindness among and between people. Courage and Integrity Courage and integrity are the cornerstones to the practice of ethical behavior. Acting ethically with integrity involves discerning right 47

Value-Centered Ethics

from wrong and acting with firm adherence to one’s virtuous values. It means doing what is right on a consistent basis without concern for personal consequences. It means doing the right thing even when it is not easy, and often requires courage and integrity to do so. In practice, these six categories of virtuous values are intertwined and interdependent. For example, administering resources fairly and giving fair guidance to stakeholders along the way also takes courage and integrity. Allocating limited resources always leaves some individuals and groups with less than they would prefer. An unpopular decision is much easier for affected employees to accept if they believe the decision was fair and made with integrity. It would be interesting to know how many labor disputes could be avoided if employees felt that management embraced these virtuous values. If employees truly believed that management was wise and fair, was not driven by self-interest, and cared for their employees’ well-being, would labor strife be as prevalent? For example, a pay package presented as the best possible offer by a management team that genuinely cares for its people and has a history of fairness and wisdom, is more likely to be accepted than the same package presented by management in an organization with an “us/them” mentality where there is no trust or mutual caring, and no perceived fairness.

Putting Virtuous Values into Practice: A Systematic Approach To put the core virtuous values into practice, managerial leaders need to have a professional and systematic approach. There are countless approaches to managerial effectiveness found in popular and academic writings. To be practical and add value, a system of managerial effectiveness needs to be easily understood by practitioners and have evidence that it works on the firing line. To ensure the practice of ethical managerial leadership, the system also needs to lend itself to alignment with a set of virtuous values. Over the past 25 years, I have been applying a professional approach to managerial leadership effectiveness that I call “Corperformance.” This system has helped me in my various internal leadership roles, 48

Chapter 4: Getting to the Heart of the Matter

benefited my consulting clients, and provided concrete value to my students at Pepperdine University’s Graziadio School of Business and Management. I will briefly review the Corperformance System here and then elaborate on its components in Chapters 5 through 8. The Corperformance System is designed to help managerial leaders manage their organization ethically, on a performance basis, without losing their entrepreneurial spirit. The system is built on four key roles, which the successful managerial leader must execute effectively: Influencer, Director, Focuser, and Linker. In practice, managerial leaders set a clear direction for their organization, they focus operations on the key result areas, they link resources in ways to maximize their value to the organization, all while talking and acting in ways that promote performance (influencing people to promote performance). Each of these four roles has ten practices that are put into play in implementing the associated role. Each practice is behaviorally defined and is executed in the context of the six virtuous values, which are the core of the Corperformance System. The four roles and the underlying 40 practices are depicted in the Corperformance Performance Diamond found in Figure 4-3. The professional managerial leadership system and the system of virtuous values are then complemented by selective behavioral standards or codes of conduct. In an ideal world, managerial leaders and their people would act ethically as a result of their internalized virtuous core values. I like to think of this as ethics from the “inside out.” Relying solely on this inside-out approach, however, is simply naïve in many circumstances. A systematic approach to management such as Corperformance must include a supportive and selective set of behavioral standards or codes of conduct to encourage compliance (or discourage non-compliance) throughout the organization—encouraging ethics from the outside in. Established behavioral standards and written codes of ethical conduct can help bolster virtuous values and promote ethical organizational behavior. Behavioral standards are typically specified guidelines for behavior within the organization and/or specific functional work areas. For example, a sales department may clearly outline criteria for expense reimbursements. 49

ER C

EN

IN

FL

ER

K

U

Reinforcing Alignment Managing Technology Allocating Resources Competently Strategic Project Managing Coordinating Internally Managing Key Stakeholders Representing Externally Managing Teamwork Strategic Touching Modeling Performance

N LI

Self-Awareness and Control High-Impact Communicating Understanding Work Styles Building Trust Persuading Effectively Shaping and Motivating Behavior Managing Conflict and Negotiating Managing Group Dynamics Decisive Problem Solving Managing Change

50

Managerial Leadership Roles and Actions

SE

U

C

R TO

EC

FO

IR

©

Documenting P/L Impacts Reviewing and Enhancing Delivering Recognition Evaluating Performance Developing Accountabilities Performance Feedback Recording and Tracking Recruiting and Selecting Pinpointing Performance Profiling Performance

R

D

Orienting to Values Creating a Vision Defining Mission Determining Key Results Developing Strategies Action Planning and Learning Reviewing Systems/Processes Designing the Structure Aligning the Direction Communicating the Direction

Copyright 1993, Charles D. Kerns, Ph.D., MBA – Revised 2001 and 2003. (Formerly Kerns m.b.a. System)

Value-Centered Ethics

Figure 4-3: Corperformance Performance Diamond

Chapter 4: Getting to the Heart of the Matter

Codes of ethical conduct have received varying degrees of attention over the past three decades and can be categorized into three types: Type 1: Inspirational-idealistic codes of conduct specify very global themes such as “be honest,” “show integrity in all matters,” “practice wise decision making,” etc. They are not tied to specific behavior or situations. Type 2: Regulatory codes of conduct proscribe clearly delineated conduct. This type of code is designed to help as a jurisprudence tool when disputes occur. It is more of a “do and don’t” approach and tends to discourage non-compliance. Type 3: Educational-learning–oriented codes of conduct offer principles to guide decision making and behavioral reactions to likely situations. This approach is compatible with building a learning organization. For example, the principle and value of fairness might be applied to allocating a bonus pool. The educational-learning–type code of behavior might ask the manager to take “fair action” in allocating the bonus pool. These learning experiences can serve to enlighten and inform to foster ethical decision making. Behavioral standards and codes of ethical conduct can help steer ethical behavior by offering a cue or written rule to guide personnel in choosing the right thing to do. In an outside-in approach, these standards and codes trigger people’s internalized values, serving as an external reminder to conform or perhaps face organizational consequences. Behavioral standards, which will be covered in more detail in Chapter 9, gain their strength through firm yet fairly administered consequences. Before we delve into each of the four action roles of Corperformance and show how they align with the six virtuous values, spend a few moments to rate how you align with the six virtuous values by taking the Virtuous Values Managerial Leadership Self-Assessment Survey found below. 51

Value-Centered Ethics

Virtuous Values Managerial Leadership Self-Assessment Survey Instructions: Use this survey to determine the extent to which you align with each of the statements relating to the six virtuous values. For each statement, rate yourself on a scale of 1 to 10, “10” means that you are strongly aligned with the virtuous value, and “1” means that you are not at all aligned with the value. Virtuous Value and Statement

Self-Rating

1. Wisdom and Knowledge. Wisdom comes from one’s experience in converting information to wise decisions, in knowing what to do, and in knowing the difference between right and wrong.

_____

2. Self-Control. Ethical people say “no” for the good and benefit of the organization, even when self-interest would seem to be contrary.

_____

3. Justice and Fair Guidance. People around the world have a keen sense of what is fair. Ethical leaders value and embrace fair advice, guidance, and decision making.

_____

4. Transcendence. Ethical leaders recognize omnipotence, something more permanent and powerful than the inidividual. Leaders motivated mainly by self-interest and personal power have restricted effectiveness and authenticity.

_____

5. Love and Kindness. An organization “with heart” allows for the expression of love, compassion, and kindness among and between people.

_____

6. Courage and Integrity. Acting ethically with integrity involves discerning right from wrong and acting accordingly, without concern for personal consequences. It means doing the right thing even when it is not easy.

_____

52

Chapter 4: Getting to the Heart of the Matter Overall General Interpretation Guidelines: This self-assessment survey is intended to help you determine the extent to which your value system currently aligns with six virtuous core values. Any virtuous value with a rating of “8” or above should be entertained as a value that is in strong alignment with your value system. Use this selfassessment tool as a springboard to discuss with a trusted colleague or performance coach your alignment and your personal value system. Are there other virtuous values in your personal value system not covered on this self-assessment?

Summary The six virtuous values, which are universally recognized, can and should be applied to the organizational context. We will proceed to analyze how these values play a role in almost every aspect of organizational life.

53

This page intentionally left blank

Chapter 5

The Managerial Leader as Influencer An effective managerial leader is able to influence people using interpersonal influence skills to enhance performance and attachment to an organization. Influencing skills are “people skills,” critical for success in management. Influencing skills include, for instance, the ability to communicate effectively, understand people and their motivations, and persuade and motivate others. In order to be influential, managerial leaders need to be aware of their impact on those around them and whether this impact is the result they intend. The influencer will treat others with respect and professionalism. Influence skills are used to set a clear direction, focus people on relevant and important matters, and coordinate and link organizational resources, especially people.

Influencer Role and Virtuous Values Alignment The ethical leader as influencer will have adopted the six universal core values: ✥

The value of wisdom, about when and how best to interact with others, promotes the development of effective interpersonal relationships and enhances the ability to influence others.

✥

Self-control, the ability to control your responses and decline self-serving opportunities, boosts credibility and the ability to influence others.

✥

The fair and just treatment of individuals will increase others’ willingness to follow the lead of the ethical manager.

✥

In valuing transcendence, the ethical leader has a sense of service to the organization and a calling to help others, engendering a desire in others to follow their lead. 55

Value-Centered Ethics ✥

When the ethical leader values a caring and kind spirit, morale will be higher and attachment to the leader will grow, enhancing the ability to influence others.

✥

Courage and integrity are cornerstones of the consistent ethical treatment of people in organizations. Ethical managerial leaders recognize this and are willing to make unpopular decisions without regard for their personal interests.

In this chapter, we will describe the ten key actions of an effective influencer and connect these practices to virtuous values. You will have an opportunity to assess your skills in exercising each of these key actions.

Ten Key Actions In 25 years of research and practice, I have identified ten key actions that are undertaken by effective influencers. These actions are interpersonal influence skills and are consistent with the research findings and reviews of other authorities in the field. In particular, David Whetten and Kim Cameron, in their book Developing Management Skills, convincingly underscore the importance of influence as a key managerial skill area. Also, Stephen Robbins and Phillip Hunsaker review key research and present their findings on a set of interpersonal skills that are important to managerial leadership effectiveness in Training in Interpersonal Skills: TIPS for Managing People at Work. In the end, those of us who study, teach, and practice the art and science of interpersonal influence agree substantially on the set of skills necessary for a leader to effectively influence people. This book extends these findings to include how these various interpersonal influence skills align with virtuous values. This alignment helps advance the practice of ethical managerial leadership. Key Action #1: Self-Awareness and Control To be able to influence others, initially one needs to be self-aware and have self-control. In his book Management Challenges for the 21st Century, Peter Drucker devotes an entire chapter to the 56

Chapter 5: The Managerial Leader as Influencer

importance of learning to manage oneself. He challenges managerial leaders to ask themselves questions such as, “Who am I?” “What are my strengths?” “How do I get things done?” Managerial leaders who are self-aware understand their impact on others and the impact others have on them. Being aware of your strengths and weaknesses, while maintaining control of your responses and behavior, will allow you to respond in any given situation consistently with your core values. Considered responses that draw upon your strengths and/or compensate for your weaknesses, while acting consistent with your core values, will significantly increase your ability to influence others. The virtuous values of wisdom, self-control, and transcendence are particularly relevant to this key influence action. Over the years, I have developed a framework laying out the relationship of self-awareness to efficacy as illustrated in Figure 5-1.

Figure 5-1: The Corperformance Self-AwarenessåMonitoringå ActionåEfficacy Model

FRAMEWORK

Self-Awareness of Key Behavioral Patterns

APPLICATION

You tend not to verbally reinforce others’ accomplishments

Monitoring Self, People, and Situations within Sphere of Influence

Key reports frequently asking you “How does this look?” or “What do you think about this?” Also reporting that others would like some attention from you

Effective Action Based on Self-Awareness and Self-Monitoring Competence

INCREASED SELF-EFFICACY

Make a conscious effort to deliver recognition to others, asking key reports for names of people who you can stroke based on their performance

Positive Self-Evaluation about your ability to recognize others and positively impact your organization

© Copyright, 2002, Charles D. Kerns, Ph.D., MBA, and Corperformance, Inc.

57

Value-Centered Ethics

With self-awareness and self-control, you know the impact of your behavior on others and are able to adjust your behavior to maximize your effectiveness. The following steps can help increase your self-awareness and ability to control your behavior. Step 1: Identifying your behavioral improvement opportunities. By completing the various self-assessment surveys offered throughout this book, you will have an indication of various areas of opportunity to improve your behavior as an ethical managerial leader. Step 2: Assessing importance and competency levels. Of the various opportunities for improvement, identify those opportunities that are most important to achieving desired results and that are in most need of improvement. Step 3: Targeting your top opportunities. Based on the results from Steps 1 and 2, pick one to three areas of behavioral action on which to focus your improvement efforts. Step 4: Writing action learning plans. Self-awareness does not automatically lead to behavior change. Create action plans, specifying the “what,” “when,” and “where” of your plans. Step 5: Arranging accountabilities. It is extremely helpful to make others aware of your action plans. They can be sources of support, encouragement, and honest feedback, holding you accountable for staying the course. Step 6: Continuing to update and fine tune. Self-awareness and self-control are ongoing processes. Practice relevant self-disclosure and be open to feedback, updating and fine tuning your plans as necessary. In time, your self-awareness and self-control will allow considered responses consistent with your virtuous values. Key Action #2: High-Impact Communicating Effective communication is an essential skill in influencing others, requiring an enormous amount of any manager’s time. Various 58

Chapter 5: The Managerial Leader as Influencer

studies show that managers, depending on their level within the organization, spend 50 to 85 percent of their average workday in communication activities of some type. As with other skills, effective communication improves with practice. Effective communication means that what you intend to communicate gets through to your target audience for the impact you want. Effective interpersonal communication includes five components, which form the basis for the Basic Communication Model: 1. Speaker 2. Message 3. Listener 4. Feedback 5. Filter Analysis

The Sender/Speaker Six types of sender responsibilities concentrate on the attitudes and skills needed to make messages more effective, denoted by the word “S-E-N-D-E-R”: ✥

Set the scene. Make sure you are clear about your message and your reasons for sending it. Prepare the listener by indicating the topic of the conversation and letting him or her know about how much time the conversation will take.

✥

Eliminate the unnecessary. Keep your communication short and simple. Most managers use more words than necessary to express ideas. If you feel that you have not said enough, wait, ask for feedback, and then expand if necessary.

✥

Notify the listener on important points. Let the listener know the length and subject matter immediately, and keep the listener informed about where you are in the message. Let the listener know the importance of statements, either verbally or through gestures, facial expressions, or voice cues. Keep in mind that the listener can comprehend faster than you speak. 59

Value-Centered Ethics ✥

Demand or encourage feedback. Solicit feedback to your message and listen actively—have you communicated the message you intended?

✥

Enunciate clearly. Your voice delivery is important; speak clearly and distinctly. Slurring words or speaking too softly can cause an important message to fail.

✥

Receiver-orient the message. Focus on the other person and not just on yourself. Be attentive to the listener’s communication filter. Frame the communication so that the listener will “hear” the message you intend to send.

With practice, the SENDER tool can help you more effectively get your intended message to the listener.

The Message Messages include two important parts: the content, which is the actual words the manager uses (what is being said), and the process, which is how the manager is making his point, including feeling and tone. Studies have shown that, initially, listeners attend most to the process or “how” part of the message. Thus it is important to match non-verbal presentation behaviors with the content of the message. Messages matching in content and process promote trust, effective communication, and productivity. As an executive, it is important to be clear about what you intend to communicate and about what impact you want to have on the listener. You can tell a salesperson to arrange more appointments and make more focused phone calls, but how you communicate the message will significantly influence the result. If you create confusion or resentment, you might be better off having said nothing. Productivity will be damaged if your intent is unclear and/or your impact is not desired.

The Listener The virtuous value of love and kindness is given full expression when we actively listen to another person. It indicates empathy and communicates interest. Behavioral responsibilitssies of the effective 60

Chapter 5: The Managerial Leader as Influencer

listener include making eye contact, asking open-ended questions, paraphrasing the speaker’s words, and avoiding interrupting the presenter. Effective listening is indeed an active process requiring behavioral skills that are aligned with a set of virtuous values.

The Feedback Feedback is the response by the listener to the speaker about the impact of a message (verbally and non-verbally). To maximize communication effectiveness, managers need to be skilled both at receiving and giving feedback. In receiving feedback, the manager must listen attentively and note non-verbal cues to determine if his or her impact was as intended. The following checklist can be used to identify areas of opportunity to increase the effectiveness of feedback that you give: Check the statements that are not true in your giving feedback to others: ✥

I focus on specific behaviors.

______

✥

I keep my comments descriptive and job related.

______

I describe what I want rather than focus on the negative.

______

✥

I focus on behaviors that are controllable.

______

✥

I adjust my feedback to reflect the person’s past performance and future potential.

______

I get feedback to people as quickly as appropriate.

______

I make sure the other person understands my feedback.

______

I provide accurate feedback.

______

✥

✥

✥

✥

Use this simple checklist to identify areas needing improvement. Then you can improve your feedback effectiveness and track your progress. 61

Value-Centered Ethics

Filter Analysis People’s filters can distort communications—filters are internal perceptions and experiences that affect how people receive messages. The manager needs to be aware of what perceptions and/or experiences may prevent her message from having its intended impact, and compensate for them in her communications. She needs to know what is in her own filter as well as what is in her listener’s filter. The single most important communication tool you have in revealing another person’s filter is to ask open-ended questions, then pause to allow an answer. If you know what is likely in the other person’s filter, use an empathetic statement to start a discussion. Filters of those who report to you include their perceptions about key results and key actions on their performance profile as well as their readiness levels (see Chapter 7 for more details about performance profiling). Their alignment and commitment levels to specific virtuous values are also contained in their filter. Much of your success as a communicator will depend on how well you can read and analyze filters. Understanding the Basic Communication Model can be a powerful boost to help your communication become more effective. To be an effective influencer, one must be an effective communicator. The effective communication of virtuous values and behavioral standards is an important assignment for value-centered ethical leaders. Key Action #3: Understanding Work Styles To be able to influence productivity and effectiveness in other people in the workplace, the managerial leader must recognize work style preferences. Many assessment approaches and instruments are available to help evaluate style and work preferences. Because of its applied focus, reliability, and validity, I use an instrument called the TMI by Charles Margerison and Dick McCann to assess individual work preferences. According to the research of Margerison and McCann, we all generally fall within eight work preference styles or roles: 62

Chapter 5: The Managerial Leader as Influencer

1. Reporter-Advisor. Prefers work that involves discovering and finding information; likes to support and help others by offering information and knowledge. 2. Creator-Innovator. Is imaginative, enjoys research, and tends to prefer to work independently. 3. Explorer-Promoter. Likes to persuade, sell, and otherwise influence people and situations; tends to be an effective communicator; is energetic and effective at acquiring resources. 4. Assessor-Developer. Prefers work that is analytical and requires objectivity, such as building prototypes, project work, and experimentation. 5. Thruster-Organizer. Prefers to focus on results, systems, and organization, having a preference for implementation and a desire to make things happen; may be impatient and overlook the impact of their actions on other people’s feelings. 6. Concluder-Producer. Prefers to focus on production, effectiveness, efficiency, and completing tasks; prefers routines and schedules; is conscious of time. 7. Controller-Inspector. Prefers work that involves attention to details, precision, and strong control tendencies; can be critical of errors; is meticulous and intensely focused on only a few things at a time. 8. Upholder-Maintainer. Tends to like tradition; judgmental and faithful; does not prefer change; likes consensus seeking. Understanding work preferences can help managerial leaders in making wise staffing decisions, offering fair guidance, and motivating and encouraging their people to be their best. For more details on determining work preferences, refer to Charles Margerison and Dick McCann’s book, Team Management: Practical New Approaches. For information about instruments to assess work preferences, see http://www.teammanagementsystems.com. 63

Value-Centered Ethics

Key Action #4: Building Trust Ethical managerial leaders have the ability to establish and maintain trusting relationships. If a managerial leader is not trusted, he or she will not be able to influence others. People simply are not willing to follow or be influenced by a leader they do not trust. Research has established key behaviors that tend to engender trust, such as appropriate self-disclosure, listening, and being open to feedback. Jim Kouzes’s and Barry Posner’s research reveals that a leader’s credibility comes down to whether the leader is trusted. They pose four questions to consider your own trustworthiness: 1. Is my behavior predictable or erratic? (To build trust, you need to act consistently over time.) 2. Do I communicate clearly or carelessly? (To build trust, you need to be clear about what you say and mean.) 3. Do I treat promises seriously or lightly? (To build trust, you need to match your actions with your words.) 4. Am I forthright or dishonest? (To build trust, you do not deliberately distort the truth; you either report the truth as you know it or, for humanistic or confidentiality reasons, you withhold it.) Ethical managerial leaders who have engendered trust and confidence build real and authentic relationships. They are integrated and self-aware, value people as assets to be developed, and are able to empathize with others. Their credibility and trustworthiness are cornerstones to their ethical leadership. People see them as honest and worthy of their trust and therefore are willing to be influenced or lead by them. Key Action #5: Persuading Effectively Being able to persuade others to act, think, or feel in particular ways is critical for a managerial leader. Key to persuasion is oral presentation—using your voice and gestures to get your point across. High-impact presentation skills together with other persuasion 64

Chapter 5: The Managerial Leader as Influencer

strategies can help you become more effective at many facets of your professional (and personal) endeavors. Persuasion skills are used daily in many scenarios such as requesting bank accommodations, telling your employees that their bonuses will be deferred, or recruiting a highly qualified candidate. To be persuasive, your presentation must be credible, be well reasoned, and have emotional appeal to the listener. While these elements do not guarantee persuasiveness, without them, you will likely fail to persuade. Credibility. Four factors establish credibility: Competence, objective and honest good intentions, ethical and dependable character, and approachability. Then, like trust, credibility is gained by being consistently credible over time. Reasoning. Your position needs to be based on logical, sound reasons—supporting your proposition, being grounded in the facts as you know them, and having an impact on the person(s) you want to persuade. Emotional appeal. When good reason alone is not enough to persuade, shape what you say and how you say it based on the frustrations, fears, dislikes, likes, anxieties, etc., of the other person(s). A relevant emotional appeal can provide the impetus that will move a person to action. Even when supported by credibility, reasoning, and emotional appeal, your overall persuasiveness will be affected by your presentation skills. For maximum impact, you need to be prepared, analyze your audience, structure your message, use your voice and gestures effectively, and solicit feedback. Here are seven questions to guide the development of your persuasive pitch: 1. What is the objective of my communication? (“As a result of this communication, my audience will….”) 2. What are my main points? Identify three to five main points, making them clear by using deliberate transitions and/or summaries. 65

Value-Centered Ethics

3. Who is my audience? ✥

What do they need to know from me to increase their confidence and trust? (Credibility)

✥

What is their thinking on the way things should be? What are my reasons for the way I see things? (Reasoning)

✥

What are their hot buttons? (Emotional Appeal)

✥

Who is the hidden or secondary audience?

4. What is an effective opening? Your opening should answer the audience’s question: “Why should I be listening to this?” 5. How can I effectively preview my message? Preview your main points, telling your audience what they will learn or do during your presentation. 6. How can I emphasize/dramatize each major point? Consider using analogies, stories, gestures, and/or voice variations to make your main points memorable. 7. How should I end it? Use a strong, deliberate transitional clause that serves to introduce your closing statements (e.g., “To summarize…”). Your closing statement should be clear and concise. With a sound understanding of your audience and by maintaining focus on your objectives, presentations can be more persuasive by using attention-getting openings, previewing, making main points clear, and using effective closing statements. Use your voice and gestures to reinforce a logical, credible presentation punctuated with emotion. This approach will require practice, but the pay-off is increased influence and productivity. The value-centered ethical managerial leader also ensures that persuasion tactics and messages are consistent with their virtuous core values. For a more in-depth review of the art and science of persuasion, see Professor Jay Conger’s book Winning ’Em Over: A New Model for Management in the Age of Persuasion. Key Action #6: Shaping and Motivating Behavior Effective leaders are able to motivate their people and shape their people’s behavior to further the leader’s core virtuous values while 66

Chapter 5: The Managerial Leader as Influencer

contributing to the organization’s goals and key results. This can be depicted in the Basic Motivation Model that I have developed, integrating the key elements found to influence motivational levels in the workplace as depicted in Figure 5-2.

Figure 5-2: Basic Motivation Model

Expectations

Effort

Feedback

Recognition

Perception of Equity

To shape and motivate employee behavior, managerial leaders need to do the following: 1. Create positive performance expectations. 2. Define what effort will be required. 3. Provide effective feedback. 4. Offer meaningful recognition. 5. Ensure employees perceive that “what they get” for “what they give” is equitable. Assuming that people are capable (having been placed in positions that match their skill set and preferences—see the discussion of performance profiles in Chapter 7) to create positive expectations, the managerial leader must establish goals that are specific, measurable, and attainable (yet stretching) within a set timeframe. When individuals have positive expectations of success, they will exert more effort. The managerial leader should give clear, timely, and specific feedback in response to employees’ efforts. Encourage desired behavior that achieves or makes significant progress toward achieving goals by giving appropriate recognition. Recognition can be formal and traditional and/or informal and 67

Value-Centered Ethics

innovative. Formal recognition is given through salaries, benefits, and the like. Informal recognition can include such programs as “planned unexpected” recognition in which a manager plans special recognition not expected by the recipient. For instance, the president of a retail food chain presented a store janitor with a large cake for his effort in maintaining excellent store conditions. His recognition motivated the other janitors to continue maintaining excellent conditions—a key result area for the organization that translates into more shoppers, which positively impact sales, gross profit dollars, and customer satisfaction/loyalty. We will look more closely at strategies to increase ethical behavior through the use of positive reinforcement in Chapter 10. The ultimate prerequisite for motivation is the employee’s perception of equity. An employee’s perception of what she received in exchange for her efforts, and whether this was fair, will significantly influence her future efforts and expectations. Ethical managerial leaders strive to create conditions where their people perceive fairness in what they receive in light of the effort put forth. Over time, employees who believe that they are being treated unfairly will seek to compensate in different ways, such as slowing down production, stealing, or quitting. Shaping and motivating behavior clearly calls for managerial leaders to align with the virtuous value of justice and fair guidance. People are looking toward their leaders to provide a motivational environment that can ultimately be judged by them as fair. Key Action #7: Managing Conflict and Negotiating Conflict is a normal part of organizational life, arising when there are incompatibilities, disagreements, or differences. It is not a question of whether conflict exists, but in what areas and how much conflict exists, and how it will be managed. Most people avoid conflict. One of the greatest challenges for a manager is developing effective conflict management skills. The manager needs to analyze a conflict situation, know options for 68

Chapter 5: The Managerial Leader as Influencer

resolution, identify the desired result, and then make a conscious decision on how to handle it consistently with his core values. A professional framework and set of skills should be used to manage conflict. Too much conflict produces antagonistic attitudes, distorted communication, low-quality decisions based on poor information, and one-sided commitments. In contrast, too little conflict generates minimal energy between the concerned parties, prevents disagreement and sharing of controversial information, produces decisions based on inadequate information, perpetuates status quo to the point of stagnation, and fosters fragile relations that can break down in challenging situations. Conflict may be classified based on its source, or on the organizational level at which it occurs (i.e., individual employee, department, office, etc.). Possible sources of conflict include: 1. Limited resources 2. Differing values 3. Feeling level 4. Incompatible goals 5. Change 6. Task or work content issue 7. Thoughts/perception The difficulty in resolving a conflict can relate to its source. For example, resolving a difference in the amount of time allocated (e.g., limited resources) to a key action (e.g., cold calling) might be easier to resolve than changing a salesperson’s honesty (i.e., differing virtuous values). At least five different approaches can be taken in handling conflicts and negotiating with others in the workplace: 1. Competing (Forcing). One person seeks to achieve his goal or further his agenda, regardless of the impact on others. He 69

Value-Centered Ethics

competes and dominates, generally ignoring the needs and expectations of others. 2. Collaborating (Problem Solving). Exchanging information and examining differences to reach a solution acceptable to both/all parties. Participants consider the full range of alternatives. Collaboration is a win-win approach. 3. Compromising (Sharing). Both parties concede something to reach a mutually acceptable decision. It might mean splitting the difference, exchanging concessions, or seeking middle ground. 4. Avoiding (Withdrawal). Withdrawing, passing the buck, or sidestepping conflict will fail to satisfy any party. Nonetheless, there are circumstances when avoidance can be the most effective approach. 5. Accommodating (Smoothing). Down play differences and emphasize common ground to satisfy the other party. One party is willing to sacrifice. These approaches provide managerial leaders with alternatives when attempting to resolve conflicts and negotiate arrangements. Each situation will dictate the best approach. Use the Situational Conflict Management Checklist in Figure 5-3 to monitor your performance in conflict management.

70

Chapter 5: The Managerial Leader as Influencer

Figure 5-3: Situational Conflict Management Checklist The following are important behaviors related to managing conflict using a situational conflict management approach. Check (X) those items on which you need improvement, or use a rating scale of 1 to 10 (“10” being the highest or “very true”) to evaluate each item. Check or Rating 1. Anticipates and proactively handles potential conflict

___________

2. Describes conflict in terms of observable behavior

___________

3. Effectively discerns the source of conflicts

___________

4. Appropriately delivers the most effective conflict resolution method or negotiation style

___________

5. Shows flexibility in applying the various methods of conflict resolution

___________

6. Reflects on conflict resolution sessions/negotiations to determine what you learned

___________

7. Ensures that conflict resolution/ negotiation strategies and tactics are aligned with virtuous values

___________

Key Action #8: Managing Group Dynamics The process of a group’s development is ongoing and complex. To understand and manage groups, learn to recognize the developmental stages of groups. A group must develop to manage both task and interpersonal relations to be effective. Work groups pass through five stages of development, but occasionally regress to earlier stages of development. Stage 1: Testing and orienting (forming). Group members become acquainted and determine the behaviors that will be acceptable, the 71

Value-Centered Ethics

skills and resources of each member, the goals and motivations of each member, and each member’s psychological commitment to the group. The leader facilitates the defining of the task, establishing an agenda, setting goals, and making sure things happen. Stage 2: Conflict and organization (storming). Conflicts emerge as a gap between reality and initial expectations surfaces. Members might start to doubt leadership, and other members might fight for control. It may be difficult to make decisions and communicate effectively. Norms of expected behavior, standards, and work rules start to develop. As conflicts are resolved, uncommitted members might leave the group. If a group meets these challenges, it will start to become a successful work group. High turnover or many changes, however, make leadership and organizational conflicts difficult to resolve. The group might experience low motivation and confidence, needing leadership to provide structure, support, and guidance. Stage 3: Cohesion and information exchange (norming). Cohesion and teamwork start to gel. Group members share feelings, give and receive feedback, and start to share a sense of success. If feelings of cohesion eclipse a realistic assessment of alternative courses of action, however, “groupthink” might occur, inhibiting the sharing of new ideas that are inconsistent with the group consensus. This can hinder the group’s growth and development. On the other hand, oriented and organized Stage 3 groups not limited by groupthink are prepared for the exchange of information to help effectively achieve the task, marked by productive conflict about ideas. Stage 3 is a key transition point. If the issues of the first two stages have not been resolved, the group will likely suffer from serious conflict or groupthink. If the group has settled those issues, the productive conflict level will increase somewhat as ideas are shared and groupthink is avoided. New ideas, and disagreement regarding those ideas, help avoid groupthink and help the group become productive. Stage 4: Interdependence and problem solving (performing). Interpersonal relationships become interdependent. Decisions are made after thorough discussions. There is commitment to the task 72

Chapter 5: The Managerial Leader as Influencer

and to innovation in problem solving. Cohesion has developed to produce more collaboration, and information exchange has progressed to allow effective problem solving. Confidence reaches a high level. Even if a group reaches Stage 4, it is faced with the challenge of staying there. Many factors can cause a group to regress and reduce its productivity. Groups never reach a point where they become complacent; the developmental process is never ending. Stage 5: Adjourning. Upon completing their assignment, short-term or limited purpose groups may permanently adjourn or temporarily discontinue. The members complete unfinished business and bring closure to the group. Ideally, group members express gratitude, and the group leader facilitates discussions of key learnings. Managerial leaders need to work to move their groups through the developmental stages by observing and managing the behaviors of group members. In managing groups, managerial leaders must be able to observe and react to three categories of behaviors, or roles, which relate directly to group effectiveness. The categories of roles are self-oriented roles, task roles, and maintenance roles. ✥

Self-oriented roles are self-serving behaviors that reduce group performance. A blocker is someone who impedes group progress toward completing tasks. A recognition seeker attempts to get personal attention at the expense of the group. A dominator seeks to run everything, whether or not it is in the best interest of the group. An avoider does not contribute to meetings and cannot be depended upon for input to the group. Finally, a nitpicker nitpicks. These people are not team players and can inhibit group performance.

✥

Task roles include the initiator, someone who suggests many ideas or actions. An information processor both seeks and offers information that will be useful in performing the task. A summarizer restates, clarifies, and organizes information and ideas, helping a group remain clear and focused. An evaluator helps sort through alternative solutions, testing ideas and solutions against logical benchmarks. 73

Value-Centered Ethics ✥

Maintenance roles include the encourager who praises ideas and contributions of others and supports member efforts. The harmonizer acts to resolve differences and reduce tension that might be developing. A compromiser helps find acceptable common ground. Finally, the gatekeeper encourages quiet members to speak up and tones down dominant members.

The task and maintenance roles are important for a group to be effective. Rarely are self-oriented roles useful to a group. Which roles are most critical will vary as the group works through a problem and moves through developmental stages. For example, during the testing and orienting stage (Stage 1), the gatekeeper and initiator are helpful in offering guidance and involvement that is needed to get the group off the ground. During the conflict and organization stage (Stage 2), the summarizer, information processor, harmonizer, and compromiser might help resolve conflicts and move the group into the productive stage of cohesion and information exchange (Stage 3). During this stage and the interdependence and problem-solving stage (Stage 4), most roles are important if a group is to maintain high performance. Summarizing and appreciating are key behaviors to exhibit in the adjournment stage (Stage 5). Key Action #9: Decisive Problem Solving Organizations are constantly faced with problems to be solved and look to managerial leaders to help in this key process. Three dimensions are important in problem solving, which can be addressed by asking: 1. Have I sufficiently analyzed the problem situation? 2. Have I reached a decision within an acceptable timeframe? 3. Is the solution ethical and consistent with my core virtuous values? For decisive problem solving, consider adapting the following six-step process to your problem-solving approach. 74

Chapter 5: The Managerial Leader as Influencer

Step 1: Define the problem and set a decision timeline. Clearly define the problem; be explicit. For example, rather than stating, “Sales are off,” define the problem explicitly: “Our sales have declined 2 percent over the past six quarters.” Identify relevant facts, potential causes, and related information, then set a specific timeline for coming to a decision. True leaders will provide clarity in describing problems and are appropriately decisive in attacking problems. Step 2: Generate alternative solutions. Brainstorm alternative solutions, involving to the extent possible those who can influence the implementation of a solution and those for whom the problem is important. Alternatives should include short-term and longer-term potential solutions. Step 3: Review and select solution. Select a set of practical criteria to assess the identified alternatives. Specify the positive impacts and the negative consequences for each potential alternative. Discuss any potential unintended consequences. Step 4: Clarify the solution and apply core virtuous values. Key to staying on an ethical course is to continuously review problems and their solutions within the context of your core values. Using the six values presented in Chapter 4, ask yourself the following with regard to the problem at hand: ✥

Is this the wisest and most knowledgeable solution? (Wisdom and Knowledge)

✥

Am I acting (tempted to act) solely out of self-interest? (SelfControl)

✥

Is this solution just and fair, and am I providing fair guidance? (Justice and Fair Guidance)

✥

Am I acting with stakeholders in mind and in accordance with our organizational mission? (Transcendence)

✥

Is this solution compassionate? (Love and Kindness)

✥

Is this an honest solution in which we will be doing the right thing, even if unpopular? (Courage and Integrity) 75

Value-Centered Ethics

Step 5: Play “devil’s advocate” to determine derailers. As a final ethical filter, review your selected solutions in light of the 15 derailers discussed in Chapter 2. Are you truly making an effective and ethically sound decision? Step 6: Implement and track the solution. Communicate your decision and provide implementation details to those affected by the solution. Encourage feedback as the solution is implemented. Monitor and track actual results against intended impacts. This six-step process can help ensure that your decisions are thorough, timely, and ethical. I encourage you to use this approach when faced with challenging problems needing decisive, ethically anchored solutions. Key Action #10: Managing Change Kurt Lewin in his classic work Field Theory in Social Science provided a practical way to view planned change. His framework helps us conceptualize change in three phases: unfreezing, changing, and refreezing. Over the years, I have integrated a variety of change management tools into this general framework. Unfreezing often requires persuasion skills to help people recognize a need and become motivated to change. To effect change, individuals need to be reasonably dissatisfied with the status quo. Unfreezing the status quo motivates individuals to embrace change with minimum resistance. Effecting change involves moving from the present to the future, dealing with resistance along the way. As change is introduced and implemented, the following will be helpful: 1. Reinforcing and confirming the need to change. One primary reason for change is to address a performance issue. Change can close a gap between current performance and desired results. Change is particularly important when there is a pattern of behavior, operating system, or policy in place that encourages unethical behavior. 76

Chapter 5: The Managerial Leader as Influencer

2. Assessing and determining key levers for change. A variety of levers can be considered to help an organization successfully change, including: ✥

Rules and policies

✥

Measurement systems

✥

Behavioral standards

✥

Training and development

✥

Managerial leadership

✥

Behavioral consequences

✥

Communication

✥

Physical setting features

✥

Organizational structure

3. Documenting and communicating your change vision. Visions for change can range from incremental small movements to larger organizational transformation. In communicating your vision, address the following for those impacted by the change: ✥

“This is what is going on.”

✥

“Here is where we are going with this change.”

✥

“This is how it impacts you.”

✥

“Here is how we will implement it and make it work in practice.”

4. Soliciting feedback from stakeholders. Soliciting and listening to feedback will help reduce resistance and can provide useful ideas for action planning. 5. Generating action plans and change management project teams. Translate words into action and unfocused activity into results by developing key action plans and organizing appropriate project teams. This helps divide the challenges into 77

Value-Centered Ethics

manageable projects, assigning accountabilities while involving those affected. 6. Pilot testing. Pilot elements of the change effort before undertaking a full launch. Collect preliminary data to help fine tune your efforts. 7. Full implementation. Implement your action plan. 8. Continuous improvement. Monitor, measure, and fine tune change efforts on an ongoing basis. In phase three, refreezing, the organization upholds and maintains the changes so that a sense of stability prevails. Over time, attitudes and actions should become aligned with the change. During the course of change, managerial leaders will be challenged to display a variety of change management skills. They will need to raise awareness of the need for change, be open to giving and receiving feedback, and persuade the key stakeholders as to the best course of action. Throughout the management of change, virtuous values need to be aligned with the various change strategies and tactics employed by managerial leaders.

Summary The ten key actions contributing to the managerial leader’s role as influencer are driven by the practice of core virtuous values and are integral to the successful execution of the other three action roles within the Corperformance System of professional management. Setting a clear direction (Chapter 6), focusing operations (Chapter 7), and linking resources (Chapter 8) all require a threshold level of interpersonal influence skills. Before we proceed to the director role, I encourage you to complete the Managerial Leader Influencer Role Self-Assessment Survey found below.

78

Chapter 5: The Managerial Leader as Influencer

Managerial Leader Influencer Role Self-Assessment Survey Instructions: Use this survey to assess your interpersonal influence skills on the dimensions cited below. For each statement, rate yourself on a scale of 1 to 10 (“10” being the highest or “very true”) for each dimension. Dimension

Self-Rating

1. I am aware of my behavior and impact on others.

________

2. I effectively manage my behavior.

________

3. I practice high-impact communicating.

________

4. I understand different work preferences.

________

5. I am an effective trust builder.

________

6. I am an effective persuader.

________

7. I am an effective motivator.

________

8. I am an effective conflict manager.

________

9. I am an effective negotiator.

________

10. I effectively manage groups.

________

11. I am a decisive problem solver.

________

12. I am an effective manager of change.

________

Overall General Interpretation Guidelines: This self-assessment is intended to help you look at your interpersonal influence skills. Any dimension with a rating of “8” or higher is likely an area of strength for you. Any dimension rated “3” or lower is likely an opportunity for development. Use this self-assessment tool as a springboard to discuss with a trusted colleague or performance coach your interpersonal influence skills and to create personal improvement plans.

79

This page intentionally left blank

Chapter 6

The Managerial Leader as Director Would you board a boat if you had no idea where it was headed? What if you asked the captain about the vessel’s destination and he was vague? I suspect your confidence and enthusiasm for the journey would be diminished to the point that you might not even take the trip. Ideally, before a person is put to work, he or she will be given a clear and motivating direction. Surveys in organizational settings show that employees want to know where the organization is headed. Without a clear direction, employees might be “busy working,” but any contribution toward organizational goals will in all probability fall far below potential. Managerial leaders have a responsibility to communicate to individuals within the organization the strategic direction of the organization, and how each employee plays a role in this plan in some meaningful way. If the direction is not communicated, the interests of the overall organization and its key stakeholders are ignored and organizational resources are wasted.

Director Role and Virtuous Values Alignment Managerial leaders throughout an organization need to appropriately define and communicate a clear and meaningful direction at all organizational levels—work groups, departments, divisions, and the overall organization. People want to believe that the enterprise is headed in a positive direction and that they can be a part of its success. Without clear direction, an organization will simply drift without navigation. The ethical managerial leader, as director, will have adopted the six core virtuous values; the organization’s direction will be aligned with those values. ✥

Wisdom and knowledge, as gained through experience, information, and data, help guide the direction-setting process to 81

Value-Centered Ethics

produce wise decisions concerning vision, mission, and strategies. ✥

Self-control, the ability to decline personal temptations, allows the managerial leader to set an organizational direction reflective of stakeholder interests, for the benefit of the institution as a whole.

✥

In valuing justice and fair guidance, the managerial leader will plan for use of organizational resources in a fair way, and the direction that is set will reflect fair-minded guidance and input from key stakeholders.

✥

The value of transcendence is reflected in a direction established for the common good and goes beyond self-interests; stakeholder interests are at the center of plans and drive decisions regarding vision, mission, and strategies.

✥

Compassion and goodwill are reflected in directions set with the value of love and kindness. Direction setting and action planning include a relationship-enhancing approach.

✥

A clear direction established with courage and integrity will reflect an honest assessment of available alternatives and resources; systems and processes installed help create and sustain ethical conduct.

In this chapter, we will describe the ten key actions of an effective director. You will then be given an opportunity to assess your skills in performing the key actions of a managerial leader in the director role.

Ten Key Actions In 25 years of research and practice, I have identified ten key actions that are associated with the director’s role. Ideally, these key actions should be addressed sequentially by the managerial leader as presented below, as they build upon each other. Key Action #1: Orienting to Values To set an ethical tone and course within the organization, the managerial leader must identify and communicate his or her core values, 82

Chapter 6: The Managerial Leader as Director

and communicate why they are relevant to the organization. As an executive in the health-care industry, I routinely presented as values of the organization the six virtuous values to new employees at new employee orientation programs. Your people can be “oriented” to your values in a variety of ways, such as at new employee orientations, in written communiqués, or at sessions held to present the organization’s strategic direction. Be clear that your values are the values of the organization and that you expect workplace performance and behavior to be consistent with those values. The most important and powerful way for any managerial leader to communicate organizational values is to consistently speak and behave in accordance with those values. One of the primary factors in determining ethical behavior of people in organizations is whether or not management acts ethically. Key Action #2: Creating a Vision Vision is a picture of what you want your organization to be at some point in the future (typically three to five years). The process of creating a vision can be called “visioneering” and involves developing an image of the future, writing a vision statement, and communicating it to all within the organization and to other key stakeholders. An important purpose in creating a coherent vision for your organization is to give direction and motivational inspiration. It helps define the short- and long-term action plans in order to move current reality to meet your future image or vision. Vision can be documented in a vision statement, which is clear and concise. Your statement should be easily understood, clearly desirable, and energizing. It is a leading-edge communication that should address the future as it relates to, at a minimum, people (employees, managers, customers), products/services, markets, physical settings, and prevailing organizational values. You might want to capture the essence of the message in a short four- to fiveword slogan, which can become an important reference for your vision. 83

Value-Centered Ethics

Key Action #3: Developing and Fine Tuning Your Overall Mission Developing a mission for your organization is critical in setting a clear direction. In the director role, managerial leaders need to focus on developing and fine tuning an overall company mission statement. The overall company mission statement is a way of getting people focused and other company resources working for the common good of the overall organization. When working toward the common good, self-interest becomes secondary. Very simply, an organization’s overall mission statement describes the purpose, nature, and concept of the company’s current business. Without a clear statement of purpose for the overall organization, resources could be inefficiently applied and people might work at cross-purposes. An organizational mission statement enables workers and work groups to work in concert for the common good. To complement the overall mission statement, statements of purpose should be developed for each individual work unit or functional area. Given an overall mission for the organization, people in individual work units need to know what role they play in supporting the overall mission. Taken together, your overall mission and your functional work area mission statements provide visible documentation that can encourage everyone within your company to focus their efforts in a productive manner, furthering the purpose of the larger organization. An overall mission statement is no more than one page long. It typically includes an umbrella statement (20 to 25 words) that identifies the conceptual nature of the current business, and then a commitment to various aspects of the business, including statements of specific philosophies and goals of the overall operation. Consider the example in Figure 6-1.

84

Chapter 6: The Managerial Leader as Director

Figure 6-1: Example of Overall Mission Statement ABC is in business to supply technically innovative hardware and software I/O solutions to the OEM computer market that provide a long-term benefit to our customers and a long-term return to our investors. In support of this, we are committed to: ✥ Being recognized by our customers for responsiveness and for satisfying their needs. ✥ Being recognized as a technically superior and innovative supplier of high-quality products. ✥ Being recognized by our employees and the business community for excellence and integrity in managing the business. ✥ Providing an environment for attaining personal excellence and growth for all our employees.

Organizations can realize a variety of important benefits as a result of clear mission statements, including: ✥

✥

✥

✥

✥

✥

✥

Documenting the core values of the organization, such as honesty, integrity, wisdom, fairness, and courage. Ensuring consistency, clarity of purpose, and clear direction throughout the company. Providing a foundation for strategy formulation and performance planning. Gaining commitment from personnel by a clear understanding of the nature and concept of the business. Gaining understanding and resources from others outside the company who are important to your business success, e.g., bankers, vendors, and investors. Linking a relatively abstract definition of purpose with a concrete sense of direction. Guiding the development of mission statements for smaller work groups within the organization, reflecting their contribution to the overall organization. 85

Value-Centered Ethics

To begin developing a mission statement, consider the Overall Mission Statement Worksheet in Figure 6-2. From an overall mission statement, this worksheet can be adapted to develop mission statements for each department, work group, and functional work area. Mission statements should be fine tuned annually.

Figure 6-2: Overall Mission Statement Worksheet Some questions to consider in formulating your mission statement: 1. What business are we in? (Who do we satisfy? What do we satisfy? How do we satisfy?)

2. Why do we exist? (What is our basic purpose?)

3. How do we go about filling that function?

4. What is unique or distinctive about our organization?

5. Who are our main customers, clients, or users?

6. What are our main products/services?

7. What are our principal market segments?

8. What are our main outlets/distribution channels?

9. What are our main internal economic concerns?

86

Chapter 6: The Managerial Leader as Director 10. What philosophical issues are important to our organization’s future (i.e., virtuous core values; major beliefs that affect how we do business)?

11. What special considerations do we have for key stakeholders?

12. What do my people want to know about the leadership and their relationship to the business?

Draft your mission statement in the space below:

Key Action #4: Determining Key Results Building on the organizational vision and overall company mission statement, managerial leaders need to document key results for all organizational levels. Establishing key result areas for all employees allows the manager to treat employees fairly and equitably based on individual performance. The CEO’s key results need to reflect the overall mission and clearly delineate his or her most important points of focus. In turn, key results for management personnel need to work toward the CEO’s key results. A performance pyramid has the company’s vision/values, overall mission, and CEO’s key results at the top. This is supported by a foundation of missions and key results for the other areas.

87

Value-Centered Ethics

From mission statements for departments and work units, key results for each functional area and individual throughout the organization need to be specified. In the end, all managers will have one to five key results identified for their position and one to five key results for all personnel in their area. Key result areas are connected to business strategies and should be balanced and support the organization’s core values. Typically, these key result areas will include factors of some or all of the following aspects of organizational success: ✥

Financial success

✥

Customer loyalty

✥

Employee retention and development

✥

“Operationalizing” efficiency and effectiveness

A managerial leader striving to achieve a highly ethical work culture will also keep and track metrics relating to ethics as key results. These might include such things as retention figures, employee theft, employee morale, employee education and learning, etc. Poor results in any of these areas can be indicative of shortcomings in the practice of a variety of core values. Key Action #5: Developing Strategies Strategies are developed to effectuate company vision and “operationalize” mission statements. The main objective of strategies is to create value for organizational stakeholders in light of the company’s mission statements and vision. Strategies are established based on global decisions such as which industries and industry segments to pursue, what products and services to provide, and how to link and allocate finite resources. The development of effective strategies leads to the proper positioning of an enterprise for sustainable competitive advantage. Ethical considerations need to guide the formulation and implementation of strategies. You will be faced with many ethical 88

Chapter 6: The Managerial Leader as Director

choice points relating to where to do business, who to do it with, and how to operate. Some questions that the ethical managerial leader might ask when dealing with strategic questions might include: ✥

Is this a wise decision based on what we know? (Wisdom and Knowledge)

✥

Does this course of action serve our stakeholder community at large as opposed to a few who are self-interested? (Self-Control)

✥

Is this choice just and fair-minded? (Justice and Fair Guidance)

✥

Does this strategy appeal to our broader sense of calling and duty? (Transcendence)

✥

Will this strategy lend itself to a respectful and considerate implementation process? (Love and Kindness)

✥

Does this strategy have integrity and can I support it enthusiastically? (Courage and Integrity)

Key Action #6: Action Planning and Learning Strategies come to life through thoughtfully developed and effectively executed action plans. The ethical director designs action plans that stretch and challenge individuals and teams, tapping their strengths. Action plans can be used to enhance organizational learning. A variety of formats can be used to document action plans. The essential components address the following: 1. What is the task? 2. When is it to be done? 3. Who is responsible? 4. What assistance is needed? From whom? The key point of differentiation and basis for competitive advantage is the amount of learning that takes place in implementation of action plans. Because competitors increasingly have access to the 89

Value-Centered Ethics

same information, it is more and more challenging to differentiate oneself based on information alone. Competitive advantage will occur when organizational members learn from information and use those learnings to create a strategic advantage. Organizational learning involves acquiring new information and analyzing that information effectively, learning from it and applying that learning to create economic and humanistic value for key stakeholders. The value of wisdom and knowledge can drive action planning efforts and the creation of learning organizations. The most important ingredient for building and sustaining a vibrant learning culture is managerial leadership. It is also managerial leadership that creates and sustains ethical organizations, which are learning organizations that operate while adhering to their virtuous values. Key Action #7: Reviewing Systems and Processes The infrastructure of organizational systems and processes needs to be regularly reviewed to determine efficiency, effectiveness, and ethical functioning. Ethical functioning can be judged against the six virtuous values by considering the following for each organizational system and process: 1. Is this the most efficient and effective way to be doing this? (Wisdom and Knowledge) 2. Does this process serve our stakeholder(s) (before self-interests of individuals)? (Self-Control) 3. Are our systems and processes for doing business fair? (Justice and Fair Guidance) 4. Do the systems and processes effectively support our mission and higher calling? (Transcendence) 5. Are there human resource systems and processes that offer support and compassion? (Love and Kindness) 6. Are systems and processes consistently applied and managed? (Courage and Integrity) 90

Chapter 6: The Managerial Leader as Director

In this manner, ethical managerial leaders can review their key systems and processes to determine whether they are consistent with their core values. Keep in mind that establishment of key results, specification of goals, and the development of strategies must precede the delineation of systems and processes. If key results are established, goals are specified, and strategies are consistent with core values, it is much more likely that organizational systems and procedures will be consistent with core values as well. Key Action #8: Designing the Structure Organizational structure is like good Scandinavian furniture: Form follows function. A key principle within the Corperformance approach to management is having the organizational structure remain as flat as possible. A flat structure helps ensure that a more entrepreneurial approach can be preserved. Conversely, a vertically deep structure creates more of a bureaucratic operating environment, which can create slow response time, resistance to change, and customer disloyalty. In configuring an organizational structure, managerial leaders need to strike a balance between autonomy and control. In moving away from an environment of control when control is not necessary, the ethical managerial leader is recognizing the inherent worth and potential contribution of organizational players at all levels. Every employee can make a contribution and can be held personally responsible for his or her key results. In moving toward a more flat organizational structure and providing more autonomy and individual responsibility, consider the following dimensions identified by Ron Ashkenas and his colleagues in their book The Boundaryless Organization: Breaking the Chains of Organizational Structure: 1. Information. Rather than keeping information close, move toward integrating relevant information throughout the organization; a closed environment moves toward a more open and sharing environment. 91

Value-Centered Ethics

2. Competence. Managerial leadership skills of top management and technical skills exercised at lower levels are expanded such that all employees throughout the organization have appropriate managerial, leadership, and technical skills. 3. Authority. Decision making focused at the top is expanded such that decisions are made at various organizational levels as appropriate. 4. Rewards. Rewards based on one’s position are phased out and systems of reward based on results are put into place. The ethical managerial leader will also consider his or her core values in establishing the organizational structure—and whether individual employees are able to maintain performance consistent with those values. Consider the impact that the organizational structure may have had on any ethical lapses. Organizational structure should be continuously monitored and fine tuned. Key Action #9: Aligning the Direction Keeping the overall organization internally aligned is the managerial leader’s work. Alignment must include consistency among organizational values, direction, focus, linking, influence, and ethical behavior standards across all organizational levels. In sustaining organizational alignment, managerial leaders at all levels will: ✥

Continuously espouse and affirm virtuous core values with clarity.

✥

Use their influence skills for high impact.

✥

Effectively implement a strategic direction.

✥

Focus operations on what is important and accessible to change.

✥

Link and coordinate resources, especially people, effectively and efficiently.

In their book, The Power of Alignment: How Great Companies Stay Centered and Accomplish Extraordinary Things, George Labovitz and Victor Rosansky report on their research involving in-depth 92

Chapter 6: The Managerial Leader as Director

interviews of six CEOs. This research reveals the relevancy of alignment to organizational effectiveness. As an effective director, the ethical managerial leader aligns his or her organization through the following actions: 1. Espousing and affirming a set of core values, including virtuous values to build ethical behavior 2. Developing, documenting, and implementing a clear customerdriven direction 3. Designing and implementing a performance management system to focus resources (see Chapter 7) 4. Designing and implementing a linking and coordination program to effectively and efficiently manage organizational resources (see Chapter 8) 5. While providing direction, focus, and coordination, talking and acting in ways that promote performance (see Chapter 5) 6. Specifying a set of behavioral standards that underscore the key ethical behavior patterns expected from people within the organization (see Chapter 9) Taken together, these six tasks make up the Proactive Professional System (PPS) reviewed in Chapter 1. Effectively applied by managerial leaders, this system supports efforts to develop and sustain ethical behavior by offering an internalized set of virtuous values, a systematic managerial leadership framework, and a clear set of behavioral standards to shape ethical behavior. Figure 6-3 displays the Corperformance System Index for measuring the alignment of values, influence, direction, focus, linking, and ethical behavioral standards across organizational levels. Rate your organizational alignment using this index. It is a challenge to achieve alignment across all organizational levels. However, by modeling your core values and practicing effective interpersonal influence skills, you as an ethical managerial leader will be able to greatly advance organizational alignment. 93

Aligning Values, Influence, Direction, Focus, Linking, and Behavioral Standards Name: _______________________ Organization: _____________________________ Position: _____________________ Group/Dept./Work Area: ____________________ Date: ________________________ Individual: _______________________________ Rate your current organization in each of the following 18 areas. “1” represents the lowest and “10” represents the highest level of alignment.

System Dimensions

94

Organizational Level

Values (Chapter 4)

Influence (Chapter 5)

Direction (Chapter 6)

Focus (Chapter 7)

Linking (Chapter 8)

Behavioral Standards (Chapter 9)

Organization-wide

Our core values are clear; the overall organization is aligned with those core values.

Management communications and actions promote maximum performance throughout the organization. The organization gets things done through appropriate balance between technical and people skills.

There is a clear, customer-need-driven strategic direction, which considers internal resources and external circumstances. Structure promotes the achievement of key results. Appropriate planning systems and culture exist for current state of development.

Organizational operating and management systems are appropriate and consistent with the stage of development. People, performance management tools, and technology appropriately help to achieve results. Measurement, feedback, recognition, and evaluation methods are present.

The organization’s resources are coordinated, aligned, and managed as appropriate. Internal and external contacts are coordinated to create a positive image to employees and stakeholders. Information flow is balanced and effective.

The overall organization is aligned with our Ethical Behavioral Standards.

(1–10) _______

(1–10) _______

(1–10) _______

(1–10) _______

(1–10) _______

(1–10) _______

Value-Centered Ethics

Figure 6-3: Corperformance System Index©

Group/ Department/ Work Area

Work groups understand their purpose and role in implementing the strategic direction. Organizational structure is appropriate for the organization’s stage of development and promotes achieving the group’s purpose and organization’s direction. Groups believe their efforts make a difference.

Work is efficiently divided to maximize results. Departments and work groups are supported by appropriate operating and management systems. Their performance is targeted, tracked, fine tuned, and recognized as appropriate.

There is a right mix of people within each department or work group. People within and between groups communicate and coordinate effectively. Non-human resources are coordinated to maximize return as appropriate.

All work groups are aligned with our Ethical Behavioral Standards.

(1–10) _______

(1–10) _______

(1–10) _______

(1–10) _______

(1–10) _______

(1–10) _______

Individuals

Core values are clear; individuals are aligned with core values.

Individuals talk and act in ways that maximize performance and results.

All individual contributors know their role and believe the organization is going in a positive direction.

Individuals are clear about what they need to do daily to be successful. They take key actions that drive results.

People relate well to others inside and outside the organization. Cooperation in achieving results and teamwork are present.

Individuals espouse and affirm our Ethical Behavioral Standards.

(1–10) _______

(1–10) _______

(1–10) _______

(1–10) _______

(1–10) _______

(1–10) _______

Chapter 6: The Managerial Leader as Director

Interpersonal relationships within and between work groups and departments promote maximizing performance.

95

Our core values are clear; work groups are aligned with those core values.

Value-Centered Ethics

Key Action #10: Communicating the Direction As you come to the conclusion of the strategic direction-setting process, the following questions should have been answered, establishing the strategic direction of the organization: 1. “Where are we going?” (Vision) 2. “What is our current purpose?” (Mission) 3. “Where do we focus?” (Key Results) 4. “What actions do we take?” (Strategies) 5. “How do we line up to achieve results?” (Structure) After the strategic direction is documented, you must communicate where things are headed to the organization as a whole. For maximum impact, I suggest that you communicate this using a variety of modalities on a regular basis: Holding community meetings (both small and large) to discuss the direction, circulating a one-page strategic direction statement, and top management giving the most powerful message by modeling values, attitudes, and behavior aligned with what has been documented and espoused.

Summary By establishing a strategic direction for the organization—and communicating that direction to the whole organization—the ethical managerial leader has charted the course for future action and success of the organization. I have developed a useful framework to help the managerial leader in the development of an effective strategic direction.1 This approach helps managerial leaders systematically address the various factors and document this information in one or two pages.

1

Kerns, C.D. (2002 July-August). An entrepreneurial approach to strategic direction setting. Business Horizons, 45/4: 2–6.

96

Chapter 6: The Managerial Leader as Director

Before we leave our review of the director role, take a few moments to complete the Managerial Leader Director Role SelfAssessment Survey found below. The information gleaned from this exercise might help you improve your skills at setting a clear direction within your managerial areas of responsibility.

Managerial Leader Director Role Self-Assessment Survey Instructions: Fill in the appropriate number on the scale below (1–5) for each statement as it relates to your managerial leadership practices. Your ratings indicate how often you act, when appropriate, in the manner described. Rating Scale: 1 Almost never

2 Sometimes

3 Half of the time

4 Often

Director Role Actions

5 Almost always Rating

1. Effectively identifies where the organization, department, or group is headed in the future.

_______

2. Shapes overall direction including converting goals into practical plans of action.

_______

3. Ensures that the organization’s structure promotes reaching goals efficiently.

_______

4. Establishes a clear, meaningful purpose or mission for the organization, department, or group.

_______

5. Ensures that key results are specified.

_______

6. Helps provide the organization, department, or group with strategies to be successful.

_______

7. Ensures that operating systems and processes are contributing value.

_______

8. Encourages active learning.

_______

97

Value-Centered Ethics 9. Effectively communicates where the organization, department, or group is headed in the future.

_______

10. Ensures that direction is consistent throughout the organization.

_______

11. Values wisdom and knowledge.

_______

12. Shows self-control.

_______

13. Is fair minded.

_______

14. Looks beyond self-interest.

_______

15. Shows compassion.

_______

16. Is courageous.

_______

17. Shows integrity.

_______

Overall General Interpretation Guidelines: This self-assessment survey is intended to help you examine the actions you take when setting direction. Any director role action with a rating of “4” or higher should be considered a strength. Any item rated “2” or lower is likely an area for development. Use this self-assessment tool as a springboard to discuss with a trusted colleague or performance coach your self-rating.

98

Chapter 7

The Managerial Leader as Focuser In a performance-oriented, results-driven organization, human behavior within the organization is shaped and directed by managers who focus on key results. Without managerial leadership, people simply carry on unfocused activities, which may—but most likely do not—produce performance results. Results-minded managerial leaders help their people contribute to achieving important organizational results. Their people know where the organization is headed, where their job fits into the big picture, and which results really matter. Armed with this understanding and knowledge, an employee is able to take the actions that are relevant for the achievement of organizational goals. We call this performance-based behavior, which is the key to individual, team, and organization-wide success. In the focuser role, to get to results, managerial leaders must influence their people’s behavior by giving it focus. It is through focus that behavior is guided and has meaning within the organizational context.

Focuser Role and Virtuous Values Alignment People working at all organizational levels need to be clear and focused on what is important and doable. The managerial leader in the focuser role answers the question “What do we focus on to get there?” As focuser, the managerial leader can drive various performance management tools, including performance profiling, performance tracking, performance recognition, and performance evaluations. As this key action role is executed, the ethical managerial leader needs to ensure that the areas of focus are in alignment with the six core virtuous values: ✥

Leading ethically requires wisdom and knowledge to establish performance targets, select talent, and convert performance 99

Value-Centered Ethics

focus into results; the managerial leader needs knowledge and wisdom to be able to read people and situations effectively. ✥

To stay focused on key results, managerial leaders must exercise tremendous self-control, avoiding the temptation to take unethical shortcuts. In particular, the managerial leader needs to control: 1. The need to be liked by others, which can interfere with objectivity 2. The need for power and control, which can corrupt and cause damage 3. The tendency to avoid conflict rather than deal with it and resolve it 4. The tendency not to recognize others for the good work that they do 5. The reluctance to recognize others who might be more expert or competent in particular areas

✥

Focusing actions—from recruiting and selecting people to evaluating, judging, and recognizing performance—must be administered with justice and fair guidance.

✥

As managerial leaders focus on the actions at hand, they need to remain committed to the broader understanding that success reaches beyond themselves—that organizational interests transcend individual interests.

✥

The supportive and positive tone expressed by a managerial leader when helping focus his or her operation reflects the value of love and kindness.

✥

The managerial leader is constantly faced with tough decisions affecting personnel, such as confronting poor performance, and must respond with courage and integrity, often making unpopular decisions.

The ethical managerial leader, when performing her focuser role, aligns her behavior with the six core virtuous values. Ten key actions or behavioral practices are associated with this focuser role. 100

Chapter 7: The Managerial Leader as Focuser

Ten Key Actions Unlike bureaucratic organizations, performance-oriented organizations have their vision, missions, and strategies backed by managerial leadership action that helps give operational focus to the enterprise. The focuser role has ten associated key actions or behavioral practices that lay the foundation for an organization’s performance management system when integrated by common goals and communication linkages. Key Action #1: Profiling Performance Performance profiling is critical in building a performance-based company and serves as a key tool in managing people ethically, offering performance focus and accountability. A performance profile focuses actions on things that are important to your bottom line and on the things that individuals can personally influence. A performance profile is a brief index or snapshot of what it takes to be a high performer in a specific job or position. It is different from a traditional job description in that it focuses on key results or outcomes to be achieved, not just on activities. A complete profile contains five areas: ✥

Key results

✥

Key actions

✥

Requisite people skills

✥

Requisite technical skills

✥

Requisite experience

The suggested format to use for writing a profile and an example are found in Appendix 7-1 and Appendix 7-2, respectively. This tool advances the practice of ethical managerial leadership by providing individuals with a fair and just way to index what is required in their position. A performance profile serves as a vehicle 101

Value-Centered Ethics

for the managerial leader to provide fair guidance to individuals striving to execute their key actions and provides a structure for assessing performance. Key Action #2: Pinpointing Performance and Goal Setting Pinpointing performance involves converting key results for individuals and work units into specific, measurable performance targets. Goal setting, a part of performance pinpointing, is an effective motivational tool that can be used by managerial leaders to get improved results. Although the tool of goal setting has been around for decades, it is not obvious how to effectively set goals. Goal setting, like other key management actions, takes practice. Clear and fairly set goals tap into the six virtuous values. Setting goals is a wise practice for various reasons. Goals help individuals practice self-control by offering a clear point of focus, reducing distractions. When professionally administered, effective goals are fair, extend beyond self-interest, and preserve organizational integrity. Dr. Edwin Locke and Dr. Gary Latham, pioneers in goal-setting research, offer a systematic approach to effectively execute this process. I have adapted their approach into seven steps to maximize results: Step 1: Specify key results and key actions. What results do you want your employee to achieve? The applicable performance profile will be instructive. Step 2: Specify how performance will be measured. Key results are typically measured in physical units, financial metrics, and/or units of time. Keep the measurement process simple, use existing measurement procedures whenever possible, and focus on the dimensions of quality, quantity, and/or timeliness. Step 3: Pinpoint the performance target. Specify the actual measurable target to be attained (e.g., to close $450,000 in sales). Step 4: Specify the time frame. Establish the time frame for each goal or key result. I recommend annual performance targets 102

Chapter 7: The Managerial Leader as Focuser

that can be divided into shorter time frames (e.g., quarterly, monthly, weekly, daily, hourly) whenever possible. Step 5: Prioritize goals. When multiple goals are established, prioritize them in order of importance. This allows for effort and resources to be allocated appropriately. Step 6: Identify key linkages. When achievement of goals requires linking with others, connections need to be clearly specified to avoid conflicts and enhance the efficient pursuit of performance targets. (Linking is discussed in Chapter 8.) Step 7: Provide ongoing feedback and recognition. Feedback and recognition need to be given in order for progress to be made toward achieving performance targets. Focus feedback on actions most important to drive a goal; offer recognition for ultimate achievement of specified goals and for progress made along the way. Take a few minutes to reflect on your goal-setting practices and perhaps review a specific goal-setting session in your organization. Assess yourself on each of the seven steps listed above. Use this approach as you seek to optimize your goal-setting skills. Key Action #3: Recruiting and Selecting Recruiting and selecting talent is one of the most important actions of a managerial leader and is vital in shaping and sustaining an ethical culture. Because values drive behavior, identification and clarification of a prospect’s values are important in the selection process. Selection interviews should include screening for the organization’s espoused virtuous values. With increasing frequency, organizations are selecting personnel based on value alignment as well as a prospect’s skills. When conducting a selection interview, managerial leaders should ask open-ended questions and conduct performance activities, all relating to the key actions found on the performance profile for the position being filled. For example, using the example profile in 103

Value-Centered Ethics

Appendix 7-2 for a university business school academic chair, you might ask the following questions and conduct two activities as noted: ✥

✥

✥

✥

✥

What do you see as the key results for this position? (Openended question) Tell me what core values are important to you? (Open-ended question) How would you “operationalize” academic excellence among the faculty? (Open-ended question) Review this strategic action project and comment on how you would improve its focus. (Performance activity) Draft a letter to the dean that describes how you plan to handle the recruitment and selection of new faculty. (Performance activity)

All recruitment and selection activities need to align with the espoused virtuous values. People need to be treated fairly, with compassion and kindness, when they approach your organization seeking a position. Key Action #4: Recording and Tracking Pinpointing targets and recording/tracking performance in relation to these targets are key to establishing a performance-based culture. Recording and tracking performance data, in turn, set the stage for examining ways to maximize results. Measurement, recording, and tracking are based on the value of information and knowledge. Performance measurement, using reliable and meaningful metrics, quantifies performance to measure success. Recording is documenting the measurement of a key result or action. Recording methods should be practical, simple, and cost-effective. Tracking is the visual display of performance trends for a specific key result or action. A tracking system requires a practical and easily accessible recording system. Recording and tracking performance, through performance measurement, bridge the gap between performance pinpointing/goal setting and interacting with people to maximize performance. 104

Chapter 7: The Managerial Leader as Focuser

The process of recording and tracking information provides a valuable resource for performance feedback and recognition, reinforces your performance pinpointing/goal-setting program, and is important to maximizing performance. To be effective, a specific recording method/system should be: ✥

Simple

✥

Cost-effective

✥

Practical

✥

Reliable

✥

Verifiable

✥

The responsibility of one person

✥

Objective

✥

Timely

✥

Efficient

✥

Accessible

Similarly, to be effective, a specific performance tracking method/system should be: ✥

Visible

✥

Accurate

✥

Easily understood

✥

Reflective of trends

✥

Tied to benchmarks

✥

Relevant

✥

Motivating for performance improvement

✥

Accountable

Recording and tracking information require the managerial leader to have the courage to be open with information and to represent it 105

Value-Centered Ethics

in a fair manner. The process of recording and tracking information serves to further focus people’s attention on results. Key Action #5: Giving Performance Feedback Research shows that skillful feedback instructing people on their progress toward goal achievement helps increase employee performance.1 Feedback regarding poor performance, offering suggestions regarding needed adjustments, can spur efforts to improve. Giving effective feedback is a value-based managerial practice. It reflects the organization’s value of people by helping them be successful while preserving organizational resources by reducing the need to replace unsuccessful employees (thereby reducing costly recruitment and training programs). Feedback is based on the value of wisdom and knowledge and communicates a message of compassion and kindness when delivered effectively. Here are some general guidelines for effective feedback: 1. Be specific. Statements such as “You are really immature” or “You do great work” are not specific enough. Use specific positives or negatives, such as “You have been late to the last three meetings, conducted frequent side conversations, and walked out after not liking what was being said on two occasions” or “Your report was great—it was within the 10-page limit, had interesting word usage, and covered the three points we discussed.” Specificity provides useful information to help focus possible behavior change. 2. Focus on goals and key actions. Focus on helping others take actions, either proactive or corrective, to enhance their performance. Do not use this time to discuss topics unrelated to key results or key actions. 3. Provide at the proper time. The timing of feedback is critical. It is typically most effective to give feedback immediately after performance. If, however, the recipient is not prepared to receive feedback or you are upset, consider delaying it. 1Komaki,

Collins, & Penn (1982); Locke & Latham (1984).

106

Chapter 7: The Managerial Leader as Focuser

4. Make it helpful. Effective feedback is intended to improve performance and make the employee a more valuable asset. It is not a personal attack and should not compromise the recipient’s dignity. 5. Ensure understanding of the message. Effective feedback must be clearly understood. Ask the recipient to restate the major points to verify that he or she understood you; observe non-verbal expressions of understanding and acceptance. 6. Be on target. Effective feedback must be reliable and valid. If the information is incorrect, the manager will appear biased, or the employee might take inappropriate corrective action, compounding the problem. Enhance your ethically oriented, performance-focused feedback by practicing the above actions, which align with the six virtuous values. These actions promote knowledge and require self-control and fair guidance. Implied in these actions are a sense of compassion, integrity, and desire to reach out to others and go beyond self-interest. Key Action #6: Developing Accountabilities Holding people and groups accountable for key actions and key results advances performance potential and improves the likelihood of ethical behavior flourishing. When leaders affirm virtuous values, and measures are in place to hold individuals and groups accountable for key actions and results, people tend to act more responsibly. People commit to their work and a sense of ownership emerges. When people commit to their work, their strengths are recognized, their efforts contribute to group successes, and morale and motivation are increased. The performance profile is the key in developing accountabilities. Each profile should be developed in collaboration with the employee and include specific performance targets and key results. Results need to be recorded and tracked, with effective feedback given along the way. Performance reviews and recognition further advance this process (as discussed below). 107

Value-Centered Ethics

Developing accountabilities for results and ethical behavior is integral to shaping and sustaining a performance-oriented ethical culture. Effective managerial leaders promote ethics and performance by doing the following: ✥

Mutually agreeing to a set of results with their people

✥

Clarifying key actions and related parameters

✥

Providing performance standards and evaluations

✥

Offering effective, ongoing feedback

✥

Recognizing and acknowledging progress and achievement of results

✥

Connecting work and related actions to the espoused virtuous values

Developing accountabilities is wise and fair. It also helps individuals and groups see beyond self-interests and avoid being tempted by distractions that might otherwise take them off the performanceoriented ethical course. Key Action #7: Evaluating Performance In a performance-based organization, each position has associated key actions (behaviors) and key results (outcomes). A CEO and her management team have the responsibility to help each employee achieve key actions and key results. One critical tool to help maximize individual results is regularly scheduled performance reviews. Effectively evaluating and developing performance involves a structured, highly interactive process. Consider this systematic approach for a performance-based appraisal system: Step 1: Develop performance-based evaluation form. Develop an appraisal form using the key results and key actions of the relevant performance profile. I suggest the following: 108

Chapter 7: The Managerial Leader as Focuser

a. Convert “Key Results” and “Key Actions” areas into “Evaluation Criteria” and “Format” on the evaluation form. b. Word each key result as an outcome objective (i.e., quantify, including time frames where possible). c. Sub-divide “Key Results” into “Goal Attainment” (outcome objectives) and “Key Actions” (behaviors). Each key result and associated goal and key action(s) are weighted based on relative importance (for a total of 1.00) and multiplied by your evaluation of actual performance (on a scale of 0.00 to 1.00). d. On the reverse side of the form, provide space for narrative comments, such as “Areas for Improvement,” “Action Plans,” and “Follow-Up Dates.” Leave space for you and the employee to sign and date the form. An example performance appraisal worksheet is provided in Figure 7-1 to help you develop your form. Step 2: Obtain employee’s self-evaluation. Ask the employee to complete an evaluation form in preparation for the appraisal conference. This offers you another source of information when completing the final form. Step 3: Discuss employee’s self-evaluation. The objective is to get information from the employee and discern what is in his or her communication filter. This is to clarify, not challenge, the merits of specific ratings. Step 4: Managerial leader completes performance evaluation form. Use all of the relevant data available, including (a) performance data collected/observed during the review period; (b) the employee’s input; and (c) feedback from other sources (customers, vendors, other departments, etc.). Step 5: Conduct appraisal conference. Set a date, time, and place for the conference; limit interruptions. During the conference, remain in control, but encourage discussion. Index opportunities for performance improvement, then prepare a performance action plan. Together, prepare the annual performance plan and development plan. 109

Value-Centered Ethics

Figure 7-1: Sample Performance Appraisal Worksheet Position: _________________ I. Key Result Area #1 G Goal Attainment G Key Action #1a G Key Action #1b II. Key Result Area #2 G Goal Attainment G Key Action #2a G Key Action #2b G Key Action #2c G Key Action #2d G Key Action #2e III. Key Result Area #3 G Goal Attainment G Key Action #3a G Key Action #3b G Key Action #3c IV. Key Result Area #4 G Goal Attainment G Key Action #4a G Key Action #4b G Key Action #4c V. Key Result Area #5 G Goal Attainment G Key Action #5a G Key Action #5b G Key Action #5c G Key Action #5d G Key Action #5e

Date: ________________ Weight* X Rating = Total .20

X

.70

=

.14

.20

X

.90

=

.18

.20

X

1.00

=

. 20

.20

X

.80

=

.16

.20

X

.90

=

.18

*Total weight = 1.00

Overall Rating = . 86

Areas for Improvement: Action Plans:

Follow-up Dates: Employee Signature/Date

Supervisor Signature/Date

110

Chapter 7: The Managerial Leader as Focuser

Step 6: Provide ongoing feedback, coaching, and performance indexing. Throughout the year, feedback should be given and performance measured and tracked. Performance coaching might also be needed. Evaluating performance requires knowledge, wisdom, and selfcontrol to remain objective during the assessment process. The managerial leader must provide justice and fair guidance. The ethical nature of this process is also advanced by compassion, courage, and integrity. Key Action #8: Delivering Recognition By regularly and effectively recognizing employees’ performance, a managerial leader motivates his employees to achieve. Recognition should be given when key results are met, when steady improvement is made toward meeting goals, and when an otherwise poor performer completes key actions. While most managers forget to give regular recognition, this oversight can seriously inhibit longterm performance improvement. Successful recognition programs are based on a fair measure of performance. Recognition should be commensurate with the success achieved, and not solely reflected in base compensation. Both individuals and groups can be recognized. Recognition or rewards can range from social reinforcers (such as affirming physical gestures or specific verbal praise), to gifts or prizes (such as gift certificates to a local restaurant, theater, or coffee house), to reinforcers in the work place (such as special job or shift assignments), to cash bonuses. Recognition programs must be administered fairly, with reinforcers that are varied, valued, and meaningful for employees. The way in which the reinforcer is delivered greatly impacts its effectiveness. The most potent reinforcer loses impact if it is ineffectively delivered. Individualize your approach and style, being specific as to why the reinforcer is being given. Be sincere. Do not combine reinforcement with punishment or asking for more. 111

Value-Centered Ethics

While reinforcers should be varied, the fact that you give reinforcement should be consistent. Delivering recognition is a key action, calling for wisdom, fairness, and integrity. Reinforcement communicates to your people that you value them and their efforts (showing the universal value of love and kindness). Managerial leaders need to be aligned with virtuous values as they execute this key action as part of their focuser role. Key Action #9: Reviewing and Enhancing A managerial leader should maximize performance through a continuous process of performance review and enhancement. Analyze how well you are implementing Key Actions 1 through 8 above. Review opportunities for improvement and ways to enhance these elements in collaboration with your people: 1. Are performance profiles accurately written and regularly updated for all positions in my area of responsibility? 2. Are performance targets realistically set and effectively communicated? 3. Are recruitment and selection processes designed and implemented to yield the best talent? 4. Do our recording and tracking systems fairly and accurately reflect reality? 5. Is the quality and quantity of performance feedback acceptable to help others achieve performance targets while maintaining ethical standards? 6. Are there clear lines of responsibility and accountability throughout the organization? 7. Is performance evaluated virtuously and timely? 8. Are we effective in recognizing people for achievement, improvement, and acting in alignment with our values? 112

Chapter 7: The Managerial Leader as Focuser

These questions can also generate discussion about many other aspects of your organization’s performance management system, offering the managerial leader key feedback on how he is performing the focuser role. Key Action #10: Documenting P/L Impacts Over time, for-profit organizations must make a profit or the enterprise will cease to exist. Profit is, however, not the only test of success. In addition to driving “hard numbers,” the managerial leader must shape ethical behavior in his or her organization. Performance-based, ethically oriented managerial leaders simultaneously pursue business results in a manner that aligns with their virtuous core values. Managers who focus only on achieving the numbers run the risk of achieving short-term success, but losing in the long term. Figure 7-2 shows how these two dimensions—results and values—interact. It should be noted that the preferred quadrant is where high value affirmation and high results interact. High-performance ethical managerial leadership creates a work environment that is clearly directed, focused, coordinated, and effectively attended to by management. All of the managerial leadership action roles are implemented in a way that sets an ethical tone. High-performance and ethics are modeled by these managerial leaders. Take the Managerial Leader Focuser Role Self-Assessment Survey provided on page115 before going on to the linker role, which is covered in the next chapter.

113

High

High-Performing Value-Centered Ethical Managerial Leadership (Target Area)

Virtuous Values Affirmation

114 Low Low

Results Achievement

High

Value-Centered Ethics

Figure 7-2: Values—Results Interaction Matrix

Chapter 7: The Managerial Leader as Focuser

Managerial Leader Focuser Role Self-Assessment Survey Instructions: Fill in the appropriate numbers on the scale below (1–5) for each statement as it relates to your managerial leadership practices. Your ratings indicate how often you act, when appropriate, in the manner described. Rating Scale: 1 Almost never

2 Sometimes

3 Half of the time

4 Often

Practice

5 Almost always

Rating

1. Create clear written performance expectations for others.

_____

2. Get others to commit to challenging performance goals.

_____

3. Effectively hire individuals who have the people and _____ technical skills to do the job. 4. Hire people who share our virtuous values.

_____

5. Track, display, and check annual results against agreed-upon targets.

_____

6. Give feedback effectively.

_____

7. Openly receive feedback.

_____

8. Effectively develop people to perform better.

_____

9. Conduct effective performance evaluations.

_____

10. Effectively provide recognition based on performance.

_____

11. Encourage individuals to review and discuss how their activities affect results.

_____

12. Show how people’s actions impact financial results and organizational ethics.

_____

115

Value-Centered Ethics Overall General Interpretation Guidelines: This self-assessment survey is intended to help you examine the actions you take when focusing behavior. Any focuser role actions with a rating of “4” or higher should be considered a strength. Any item rated “2” or lower is likely an area for development. Use this self-assessment tool as a springboard to discuss with a trusted colleague or performance coach your self-ratings.

Summary The focuser role contributes greatly to getting an organization’s systems and processes on track by working toward performance improvement and success. This role is saturated with opportunities to test one’s ethical groundings. The six virtuous values, as indicated throughout this discussion, show up in all of the ten key actions.

116

Appendix 7-1 Performance Profile (Suggested Format) Position: ________________________

Key Actions

People Skills

Technical Skills

Experience/ Training Education

117

Chapter 7: The Managerial Leader as Focuser

Key Results

Date Completed: ________________________

Performance Profile Sample Position: Academic Chair/Business School Key Results

Date Completed:

Key Actions

People Skills

a. Accurately and collabo1. Effective communicator ratively identify recruit2. Realistically optimistic ment needs 3. Organized b. Effectively and efficiently 4. Team-oriented organize and implement 5. Receptive to feedback recruitment plan 6. Effective at c. Establish and implement giving feedback a fair and professional 7. Coaching skills selection process 8. Fair-minded d. Document and facilitate 9. Honest the implementation of 10. Goal-oriented an effective orientation 11. Aligned with core facprogram for new faculty ulty qualities members 12. Conflict manager

2. Effectively schedule and allocate faculty to programs and centers

a. Link resource allocations to strategic objectives b. Establish scheduled projections for the academic year c. Proactively determine faculty preferences

118

1. Effectively recruit and orient new faculty

13. 14. 15. 16. 17. 18. 19. 20.

Persuasive Negotiation skills Warmly assertive Self-confident Trustworthy Approachable Problem solver Behaviorally flexible

Technical Skills

XX/XX/XX

Relevant Experience Track Record

1. Computer literate— 1. Academically and professionally qualified in e-mail, Excel, PowerPoint 2. Project management discipline skills 2. Demonstrated experience in effectively work3. Planning/analytical skills 4. Knowledgeable in disciing with faculty and pline administrative support 5. Understands accreditapersonnel tion and related stan3. Demonstrated behavior dards showing alignment with 6. Data management sysour university and tems aptitude school missions 4. Tenured faculty, desirable

Value-Centered Ethics

Appendix 7-2

Appendix 7-2 Performance Profile Sample (continued) Key Results

People Skills

Technical Skills

Relevant Experience Track Record

d. Effectively coordinate with program personnel e. Effectively integrate participating/supporting faculty into schedule

119

3. Effectively evaluate a. Set realistic and challengfaculty performance and ing goals with faculty facilitate achievement of b. Professionally and fairly developmental goals evaluate faculty performance against goals using scorecard measurement system/annual evaluation process c. Proactively provide effective feedback to faculty on performance and developmental opportunities d. Specify and support developmental goals and actions for individual faculty members (teaching, business connections,

(continued)

Chapter 7: The Managerial Leader as Focuser

2. Effectively schedule and allocate faculty to programs and centers (continued)

Key Actions

Performance Profile Sample (continued)

120

Key Results

Key Actions

3. Effectively evaluate faculty performance and facilitate achievement of developmental goals (continued)

intellectual contributions, service, and collegiality) e. Work effectively with Director of Faculty Development and Chair of Faculty Orientation and Development Committee f. Provide prioritized performance ratings to Associate Dean for Academic Affairs for salary administration

4. Achieve mutually a. Set aggregate goals for agreed-upon disciplinediscipline in collaboration related scorecard results with the Associate Dean including: of Academic Affairs ✥ Intellectual contribub. Effectively track progress tions toward achievement of ✥ Teaching aggregate performance ✥ Business connections targets c. Effectively interact with faculty around performance results

People Skills

Technical Skills

Relevant Experience Track Record

Value-Centered Ethics

Appendix 7-2

Appendix 7-2 Performance Profile Sample (continued) Key Actions

4. Achieve mutually agreed-upon discipline-related scorecard results including: ✥ Intellectual contributions ✥ Teaching ✥ Business connections (continued)

d. Provide effective feedback and meaningful recognition to individuals and discipline e. Take action to enhance academic excellence, as appropriate f. Collaborate with faculty in considering course materials and common core course content g. Facilitate/communicate opportunities for scholarly activities and business connections h. Provide coaching on teaching methods and materials i. Provide support for research and business connections as they relate to the discipline

People Skills

Technical Skills

Relevant Experience Track Record

(continued)

Chapter 7: The Managerial Leader as Focuser

121

Key Results

Performance Profile Sample (continued)

122

Key Results

Key Actions

4. Achieve mutually agreed-upon discipline-related scorecard results including: ✥ Intellectual contributions ✥ Teaching ✥ Business connections (continued)

j. Ensure that efforts toward achieving academic excellence are aligned with our mission and strategic goals

5. Facilitate the practice of Value-Centered Leadership within discipline and across disciplines

a. Regularly assess collegiality b. Be a positive role model of collegiality within and across disciplines c. Provide timely and effective feedback to faculty as it relates to behaviors associated with collegiality d. Encourage the effective resolution of differences among and between faculty

People Skills

Technical Skills

Relevant Experience Track Record

Value-Centered Ethics

Appendix 7-2

Appendix 7-2 Performance Profile Sample (continued) Key Results

Key Actions

6. Ensure faculty satisfaction and loyalty

a. Effectively monitor and track faculty satisfaction using scorecard system b. Proactively pinpoint opportunities to enhance satisfaction c. Proactively determine opportunities to ensure retention of faculty

Technical Skills

Relevant Experience Track Record

(continued)

Chapter 7: The Managerial Leader as Focuser

e. Manage discipline scorecard relating to collegiality f. Encourage effective interdisciplinary communication and exchange g. Actively participate and be an effective contributor in the work of the Interdisciplinary Practice Group

123

5. Facilitate the practice of Value-Centered Leadership within discipline and across disciplines (continued)

People Skills

Performance Profile Sample (continued) Key Actions

7. Ensure key stakeholder satisfaction and loyalty

a. Provide relevant and practical value to students b. Effectively interact with others in GSBM c. Accurately identify key stakeholders d. Regularly pinpoint opportunities and issues that will enhance stakeholder satisfaction e. Effectively communicate with key stakeholders in an appropriate and targeted way

8. Effectively support discipline administratively

a. Represent the discipline at appropriate venues and serve as a channel of communication on relevant discipline matters

124

Key Results

People Skills

Technical Skills

Relevant Experience Track Record

Value-Centered Ethics

Appendix 7-2

Appendix 7-2 Performance Profile Sample (continued) Key Actions

8. Effectively support discipline administratively (continued)

b. Identify and communicate discipline-related issues c. Deal with student complaints regarding faculty teaching in the discipline d. Actively participate in meetings of the Interdisciplinary Practice Group e. Manage budgetary responsibilities (e.g., travel expenses, signing for expense reports, etc.) f. Effectively interact with administrative support personnel g. Maintain accurate records as needed on faculty in the discipline regarding performance and related matters

People Skills

Technical Skills

Relevant Experience Track Record

(continued)

Chapter 7: The Managerial Leader as Focuser

125

Key Results

126

Key Results

Key Actions

8. Effectively support discipline administratively (continued)

h. Fairly recommend allocation of faculty development funds i. Facilitate handling of tenure and promotion letters for faculty in the discipline j. Provide input on release time requests/decisions, as appropriate

People Skills

Technical Skills

Relevant Experience Track Record

Value-Centered Ethics

Appendix 7-2 Performance Profile Sample (concluded)

Chapter 8

The Managerial Leader as Linker The fourth role in the Corperformance system of managerial leadership is the linker role. A successful linker will promote the productivity of people by coordinating and integrating resources (especially people) to get work done and achieve results. The three primary purposes of linking are: 1. Realizing greater achievement through cooperation, interdependent action, coordinated labor, and group motivation. This is the linking bonus effect—the theory that you gain greater results (when appropriate) with two people working together than those same two people working independently. 2. Creating positive attachment and commitment to company direction and culture. 3. Improving the efficient use of all organizational resources through effective coordination and integration of people with their work. The linking and coordination of resources need to be effectively accomplished by managerial leaders throughout an organization. People want to be utilized so that they add value to their organization. The effective linker allocates and coordinates resources (especially people) ethically and appropriately to get work done and achieve results. Certain conditions must be present in an organization in order to have an effective program of management linking, especially team building: 1. Managerial leaders need to have effective people/influence skills. 2. The organization needs a clear direction, including mission statements giving employees a sense of purpose and meaning. 127

Value-Centered Ethics

3. To avoid unfocused effort and conflict, workers must have perceived common goal(s) and a perception of interdependence. 4. Managers must possess effective linking skills, which improve results through coordination of people and work. 5. The organization must have an appropriate organizational structure that facilitates effective communication, coordination, and integration, with clear key results; people must be guided by their performance profiles. 6. A performance management system should be in place, including (a) measurement and monitoring, (b) feedback, (c) recognition, (d) involvement, and (e) evaluation and enhancement. With these prerequisites in place, the managerial leader can begin to link and coordinate people and other resources for performance improvement.

Linker Role and Virtuous Values Alignment In linking valuable resources and coordinating how they are used, the ethical managerial leader needs to ensure that the key actions of the linker are aligned with virtuous values: ✥

Effective managerial leaders manage resources wisely using the knowledge they have gained from observing and listening to others. They link with key stakeholders both inside and outside their organizations to acquire information to enable them to make wise and knowledgeable decisions.

✥

Managing and linking organizational resources requires maturity and self-control. Managerial leaders must project poise and professionalism, not self-interest or bias.

✥

The appearance of favoritism or unfairness in distributing resources can quickly erode trust. A managerial leader must project that he is just and fair to be effective and trustworthy. 128

Chapter 8: The Managerial Leader as Linker ✥

Ethical managerial leaders recognize that the administration of resources must transcend their own self-interests. The distribution of resources needs to be accomplished with a sense of service to the overall organization and its key stakeholders.

✥

The linking and coordination of organizational resources require care, understanding, and compassion to engender loyalty and goodwill. Interacting with key stakeholders and allocating strategic resources and staffing are best done with kindness.

✥

The competent and honest allocation of resources, particularly when faced with competing demands or insufficient resources, takes courage and integrity.

Delving further into the linker role, let’s examine ten key actions or behavioral practices associated with this role.

Ten Key Actions The linker role involves bringing individuals and functional work groups together to form high-performing teams when appropriate, and facilitates coordination and communication among key stakeholders. In addition, representing the organization to outside sources for maximum impact is key to a successful linker. The linker involves herself in the effective management of the following ten key actions. Key Action #1: Modeling Performance A very effective tool in getting your people to behave and work in ways to further organizational goals and values is to model the kind of behavior you desire of them. By modeling ethical behavior, managerial leaders play an especially important role in setting and reinforcing the ethical climate within an organization. Research indicates that employees’ ethical behavior is influenced by whether they perceive their manager to be ethical. 129

Value-Centered Ethics

One of the most important determiners of whether a managerial leader will be an effective and positive performance model is the level of credibility she has among her followers. Stephen Robbins and Phillip Hunsaker in their book TIPS cite ways for managerial leaders to enhance their credibility, including: ✥

Knowing what you are talking about

✥

Working to achieve mutual trust

✥

Sharing all relevant information

✥

Being honest and avoiding any form of deception

✥

Being reliable and consistent in your actions

✥

Being warm and friendly

✥

Being confident and positive

In their book Credibility: How Leaders Gain and Lose It, Why People Demand It, Jim Kouzes and Barry Posner report that credibility primarily centers on consistency between what you say and what you do. They offer a simple prescription to enhance credibility: DWYSYWD or “Do What You Say You Will Do.” According to their findings, leaders who earned “most admired” status among their followers do things such as support their people, have the courage to do what is right, listen, celebrate good work, and follow through on commitments. Becoming an effective role model for performance can pay big dividends. People can learn more quickly and see first hand how performance expectations can be executed. By modeling ethical behavior, the managerial leader can shape and sustain an ethical workplace that will in turn drive the achievement of ethical results. Becoming an effective role model, however, requires credibility. How credible are you as an ethical and high performance leader? Key Action #2: Strategic Touching Many years ago, as an executive in a healthcare organization, I had a practice of walking around our offices talking to selected people 130

Chapter 8: The Managerial Leader as Linker

and groups to influence direction, performance focus, and/or teamwork. I now call this “strategic touching,” which is an effective way to link people. This technique works best when, on a regular basis, you receive information about individuals and/or work groups performing well. Strategic touching is enhanced when you are familiar with the key elements of a particular job or understand the main objective and mission for a specific work group so that you can make observations and comments using specific work examples. In this way, you reinforce the outcomes and behavior that you want to be achieved. For example, as a factory manager, you learn that certain line workers have been successful in increasing their productivity numbers. You might casually visit with these employees during their regular shift to tell them how successful their efforts have been and how much you appreciate their efforts. The purpose of this key action is for individuals and groups to understand and be recognized for the meaningfulness of their work. It is also an opportunity for the managerial leader to connect the individual or group efforts to their own priorities and to the organization’s virtuous values. Strategic touching is a marvelous opportunity for managerial leaders to model their organization’s virtuous values as they interact with individuals and work groups. Key Action #3: Managing Teamwork Team building is one way of linking people with various skill sets, strengths, and weaknesses to complement one another to serve on high-performing teams. Over the years, experts in team building and team management have espoused a variety of factors that relate to effective team functioning. I focus on eight factors in managing and building teams that can be used to index a team’s effectiveness as the members contribute to successful team functioning and that are manageable elements in steering the teamwork process. Factor #1: Development. In developing individuals, each individual’s strengths and weaknesses are recognized and effectively 131

Value-Centered Ethics

addressed to advance performance. Team members are encouraged and facilitated to be active and grow. Factor #2: Feedback. Using feedback effectively can facilitate communication. Feedback helps steer the team toward effective work processes and results. Both quality and frequency of feedback are important to team functioning. Factor #3: Design/Structure. An organizational structure that fosters effective communication, mutual support, and interdependence is critical to teamwork. Managerial leaders need to ensure that roles and responsibilities are clearly defined. Goals need to be clearly defined and supported by work functions within a team structure that is efficient and supportive of goal achievement. Factor #4: Work processes. The process by which a team conducts its work activities can spell the difference between success and failure. The cornerstone to all work methods is effective communication, which influences such key processes as setting objectives, decision making, and control tactics. Factor #5: Organizational alignment. To facilitate morale and a sense of attachment, team members must understand the relationship between their actions and the overall organizational direction. It is the difference between members feeling purposeful in their role and feeling like cogs in a bureaucratic wheel. In an ethical work culture, team members must be aligned with the organization’s virtuous values. Factor #6: Goal achievement orientation. For a team to function productively, it must examine how or whether it is meeting its performance goals. Without this review, motion can be mistaken for focused action, which can lead to lost credibility and internal focus. Factor #7: Team balance. A team needs a balance of technical talents and interpersonal skills among its members. The team should have the right balance of talent, ability, knowledge, and skills necessary to achieve the targeted goals. 132

Chapter 8: The Managerial Leader as Linker

Factor #8: Team leadership. One of the most important factors in developing and maintaining an efficient, effective work team is effective leadership. The designated team leader has the ultimate responsibility for managing teamwork and for achieving performance targets. Leaders help teams develop goals, coordinate finite resources, and get motivated. Building and managing a team is a multi-step process that gives equal weight to the importance of team process and team results. Team results can be more efficiently achieved if managerial leaders nurture the factors discussed above (along with others you may include). Step #1: Clearly define WHO is on the team. Initially, be specific about who is on your team. Avoid role confusion when defining team membership. Consider whether the team leader has both responsibility and authority to direct the team building and management for each of the potential team members. When team membership is clear, team commitment is advanced. Step #2: Clearly specify performance goals. The foundation for team building rests with having clear short-term and long-term performance goals. This sets the criteria to judge the team’s success or effectiveness. Without performance goals, the team is unlikely to make meaningful progress as a work unit. Step #3: Diagnose team functioning. How does the team meet the challenges of the eight factors affecting successful team functioning discussed above? These factors will influence the quality of teamwork. It is important to know how your team is functioning before creating effective action plans to improve team functioning. Use this assessment to reinforce team members’ strengths and establish a baseline from which to develop effective team-building action plans. Step #4: Create and implement team-building strategies to improve performance. Having assessed the effectiveness of team functioning based on the eight factors, zero in on the areas needing improvement. Clearly define action plans relating to specific 133

Value-Centered Ethics

factors to improve functioning. Combine the resources of the team to improve team functioning within specific areas. The team leader should lead members to evaluate the brainstormed alternatives using criteria such as practicality, cost, required resources (especially time) and overall importance to team functioning. Action plans for changing team functioning need to focus on WHO will do WHAT and WHEN! Step #5: Follow up on implementing development action plans. Review the team’s effectiveness at reaching its performance goals. Have the action plans been successful at improving performance? As your team is developing, be sensitive to a few basic reasons why team members might resist making progress. First, change can be resisted because a team member lacks a required skill. For example, if a team desires to practice more effective selling skills to increase department revenue, then members might need training in how to become an effective listener. Second, progress might be blocked because of unhealthy self-talk by team members. Change might produce internal dialogues that are counter-productive and cause anxiety, which slows progress. Third, members might avoid change because they are being reinforced (typically by individuals outside the team or by other teams) for continuing in their old behavior patterns. Fourth, team members might resist implementing team-building strategies due to relationship dynamics. For instance, a team member might associate the leader with a negative experience or person from his past. This could occur when a team leader is known for being unduly controlling and consequently sparks resistance in some of the members. If you can apply the five steps listed above for building and managing a team and closely monitor the eight key factors discussed for team functioning, then you will likely advance the effectiveness of teamwork within your organization. Key Action #4: Representing Externally Opportunities to link with outside resources arise continuously. To be effective in linking externally, managerial leaders need to create 134

Chapter 8: The Managerial Leader as Linker

and communicate a positive image of the organization to others on the outside. Ideally, the managerial leader will identify key external contacts and proactively connect with them. Prioritize external contacts in terms of importance, influence, and urgency. Spend time on external matters that you can influence and that are relevant to the organization’s strategic direction or important impact area. Do not be overcome by the “tyranny of the urgent.”1 A managerial leader needs to have a strong sense of what is important, then he can influence and prioritize activities while staying clear of urgent but unimportant external matters. Excursions into external arenas must be guided by virtuous values and ethical behavior. In projecting a positive and ethical image to the public, use the ten key actions for interpersonal influence (Chapter 5) as aligned with the six virtuous values. External linking opportunities include: 1. Focused customer contact. Do you proactively prioritize your customer contacts? Does your plan classify your customers into types such as growth, maintenance, and/or “take the order”? Do your linking actions mirror the customer priority groupings? 2. Professional service links. Who is in your professional services network—insurance broker, attorney, accountant, consultants, banker? How are these professionals being linked to your organization’s purposes? 3. Vendor/supplier links. Linking with vendors and suppliers can help maximize the potential for strategic partnering or improved profits, e.g., teaming to secure new business accounts or to get better terms. 4. Community/civic organizations or groups. Are you linking with your community to identify and take opportunities for focused positive goodwill (e.g., charity events, board memberships, task force participation)? 1 Covey, S.R. (1989). The 7 habits of highly effective people: restoring the character ethic. NewYork: Simon & Schuster.

135

Value-Centered Ethics

5. Employee families/support systems. Link with families of employees to improve morale and attachment to the organization. For example, at the company picnic, link significant others with the company, and recognize star employees in front of their partners and children, as appropriate. There are many opportunities to improve your position through effective linking. Figure 8-1 depicts potential linking opportunities. In addition to these opportunities, there are many ways you can improve your position through effective linking. A useful way to proactively plan and prioritize a linking program is to discuss and/or complete a management linking plan (MLP) with your team. The MLP can also be used to help focus on interdependence. See Figure 8-2 for a management linking plan (MLP) form.

Figure 8-1: Potential Linking Targets CEO AND OTHER LINKERS

Internal Targets (1–4) Individuals

Special Projects

Work Group/ Departments

External Targets (1–5) Overall Company

Customers Grow Maintain Take Order

Professional Suppliers/ Services Vendors Banker Accountant Attorney Consultant Insurance Broker

Community Civic Groups

Employee Families/ Support Systems

Note: Linking can occur between CEO and one specific internal/external target as well as between CEO and several internal/external targets. Completing a management linking plan (MLP) can help you coordinate your linking efforts. (See the management linking plan form.)

136

Figure 8-2: Management Linking Plan Form From _______________

To ________________ TARGETS

LEAD

TARGET

LINKER

PERSON

PROJECT

GROUP/ DEPARTMENT

COMPANY

*CUSTOMER

PROFESSIONAL

VENDOR

COMMUNITY

EMPLOYEE

LINKER

SERVICE

SUPPLIERS

CIVIC

SUPPORT

CONTACTS

SYSTEM

2. 3. 4.

137

5. 6. 7. 8. 9. 10. TOTAL LINKINGS:

* Customers should be priority grouped.

Chapter 8: The Managerial Leader as Linker

1.

Value-Centered Ethics

Key Action #5: Managing Key Stakeholders Managing key stakeholders—shareholders, key customers, key suppliers, and the like—is an important strategy, both short term and long term. Key stakeholders play a significant role in the success and growth of an organization. Your management plan should include effective linking and coordinating with key stakeholders. Use the managerial linking plan (MLP) to help focus your planning effort and review and prioritize your interactions with key stakeholders. Additionally, as you approach the management of your key stakeholder network, ask yourself: 1. What do I want to accomplish with this stakeholder? 2. When do I want this to occur? 3. Why is this relationship and interaction important to our mission? 4. How do I best approach and accomplish the “what”? 5. How aligned is this stakeholder with our virtuous values? Key stakeholders can provide a tremendous resource in growing and sustaining your business. Without effective management of this key resource, you may be missing significant business opportunities. Key Action #6: Coordinating Internally The effective coordination and linking of people within the organization should work to share knowledge, expertise, ideas, contacts, etc., among various workers and work groups. This linking needs to occur both vertically and across functions. Consider these various opportunities of a CEO to link internally: 1. CEO meeting with individual employee, e.g., two-person problem-solving sessions and “strategic touching” interactions. Linking contacts can be directed at the individual or they can be requests to have the individual facilitate some linking with another individual and/or group. 138

Chapter 8: The Managerial Leader as Linker

2. CEO interfacing with special strategic projects, e.g., a special time-limited project to identify ways to decrease overhead by a specific amount. 3. CEO interacting with departments/work groups, e.g., reviewing a department’s mission and how its work contributions help differentiate the company from the competition. 4. CEO linking with the entire company, e.g., presenting company vision, virtuous values, or expansion plan to the total organization. By effectively coordinating and linking internal human resources, the managerial leader is increasing the output capability by optimizing the utility and value of those resources. Key Action #7: Strategic Project Management Managerial leaders should be leading one to three strategic projects at any point in time. These projects should reflect the mission of the leader’s functional area, driving a specific key result area. A system of ongoing strategic projects helps managerial leaders prioritize their time and lets others know what is important. Strategic project management, when done effectively, helps focus resources in a meaningful direction. Strategic project managing practices potentially call into play all six virtuous values. The virtues of wisdom and knowledge aligning with fairness are especially relevant as they relate to making key project decisions. Strategic projects will require honesty, integrity, and courage to do the right thing. Remaining consistent with your core virtuous values will help as ethical challenges arise along the way. You can manage your portfolio of ongoing strategic projects effectively through appropriate managerial leadership practices. Assuming that you have strategically selected the most important areas that you can influence, consider these practices as you start your next project: 1. Clearly communicate the project’s mission and how it links to the organization’s and/or functional area’s mission. 139

Value-Centered Ethics

2. Select project team members who have the work preferences that match the project’s needs. 3. Organize project tasks in a logical sequence from beginning to end using phases where appropriate. 4. Develop useful project action plans that specify what, who, when, and where. 5. Develop realistic schedules. 6. Set measurable project objectives and milestones. 7. Track and communicate progress, milestone achievements, and other results to key project stakeholders on a regular basis. 8. Use available resources efficiently and effectively. 9. Effectively interact with people inside and outside the project team. 10. Empower and encourage people to actively participate. 11. Use information systems that respond to project needs. 12. Evaluate project results and working relationships. Strategic project management can greatly improve the linking and coordination of resources. You are invited to convert the above dozen practices into a simple checklist or rating scale to evaluate yourself on your current effectiveness at project management. Key Action #8: Allocating Resources Competently The effective and efficient allocation of resources is both a key managerial action and an ethical responsibility for managerial leaders. In allocating limited resources, managers must be fair and wise in their decisions, must keep the transcendent interests in mind, and must often be courageous when resources are insufficient to meet all people’s requirements. All organizations have five primary resources, which need to be managed competently and allocated effectively with high ethical standards: 140

Chapter 8: The Managerial Leader as Linker ✥

People. Human resources are critical to the success of any organization. The manager is called upon to allocate human resources appropriately throughout the organization and across work functions, seizing upon strengths and compensating for weaknesses. Selecting and placing people in the right position is necessary for success.

✥

Money. Similarly, financial resources require professional allocation. As with human resources, the manager must allocate financial resources fairly, wisely, and otherwise consistent with core values so as to further organizational direction and mission. Financial assets must be allocated to the areas where they can make the most impact on the organization’s overall success.

✥

Physical assets. Brick and mortar, equipment, and furniture are all organizational resources to help get work done. These physical assets need to be respected and allocated in a fair and wise way so as to enable people and work groups within the organization to perform and reach their key results. People look to managerial leaders to distribute these types of resources with fairness and honesty.

✥

Information. An organization’s ability to convert information to knowledge can represent a competitive advantage. Managerial leaders can facilitate information exchange or be an obstacle to this process. Five key questions to ask yourself about information can be remembered by using the mnemonic tool C-H-A-I-R: 1. Is it Current/timely? 2. Was it derived and obtained Honestly? 3. Is it Accurate? 4. Is it Important? 5. Is it Relevant? Information meeting all of these criteria must be shared among the people and work groups within the organization as needed to accomplish key results. 141

Value-Centered Ethics ✥

Time. Of the five resources, time is the only one that is absolutely finite. Once the hour has passed, you cannot get it back. The management of time revolves around a commitment to values: How a managerial leader spends his time reflects his values. Managerial leaders take action based on their values to help set a clear direction and focus effort. The management of time takes a commitment to your values and the ability to say “no” to activities and requests that are not important to advancing results within the context of your values.

Key Action #9: Managing Technology Managerial leaders need to ensure that technologies are used in the most efficient and effective ways to help achieve agreed-upon goals. Technology—such as the Internet, intranets, and extranets— provides tools to enhance performance. Technology can help link people together around key initiatives and transport information in a timely manner to assist in providing a competitive edge. Effectively managing technology can reduce geographical barriers to connecting people, save financial resources, and enhance learning. While technologies provide many benefits, they also provide many ethical challenges. Employees have additional distractions that can cause them to lose focus and productivity. Software that can monitor employee behavior and activity presents ethical issues relating to employee privacy. Issues relating to such things as electronic surveillance, productivity, and employee work-life balance will arise. In facing these issues and challenges, the ethical managerial leader will act and make decisions consistent with his or her core virtuous values. In technologically oriented operating environments, managerial leaders must make decisions more rapidly and be more flexible in attending to information inputs. There is simply more information available and this data is being delivered more rapidly. Keeping core values clear and guiding your business activities on a daily basis will help you react consistently with those values, even when rapid action and decisions are required. 142

Chapter 8: The Managerial Leader as Linker

Key Action #10: Reinforcing Alignment Throughout this book, we have noted the importance of organizational alignment. Alignment is especially critical when it comes to virtuous core values, strategic direction, and operational focus. Organizational values, direction, and focus all need to be in alignment, both vertically and horizontally. Managerial leaders are largely responsible for the creation and sustaining of alignment. Their influence, especially high-impact communicating, needs to be frequent and effective at all organizational levels. The execution of their four action roles of influencer, director, focuser, and linker are reflected in their effort at reinforcing alignment. With this leadership, the people in an organization should also express virtuous core values on a daily basis. They help bring the strategic direction to life and help the organization reach its goals by their focus. Through the practice of their interpersonal influence skills, managerial leaders significantly impact organizational alignment across boundaries.

Summary The ethical managerial leader who successfully executes the linker role coordinates and integrates resources, both internally and externally, to use the resources in the most effective and efficient way. Ethical challenges arise in this process and should be dealt with in a way consistent with core virtuous values. With these linking practices in mind, take a few moments to complete the Managerial Linker Role Self-Assessment Survey found below. The information from this survey might assist you in improving your skills at linking and coordinating resources in your organization.

143

Value-Centered Ethics

Managerial Linker Role Self-Assessment Survey Instructions: Rate yourself on the scale below (1–5) for each statement as it relates to your managerial leadership linking practices. Your ratings indicate how often you act, when appropriate, in the manner described. Rating Scale: 1

2

3

4

5

Almost never

Sometimes

Half of the time

Often

Almost always

Practice

Rating

1. Serve as an ethical and positive performance role model.

_______

2. “Strategically touch” people in specific ways.

_______

3. Effectively manage teamwork.

_______

4. Effectively represent my people and our work to external parties.

_______

5. Effectively manage key stakeholders.

_______

6. Effectively coordinate resources within the organization.

_______

7. Effectively develop a system of strategic projects.

_______

8. Effectively manage strategic projects.

_______

9. Allocate resources competently and fairly.

_______

10. Manage technologies effectively.

_______

11. Reinforce people’s alignment with our core virtuous values.

_______

12. Reinforce people’s alignment with our strategic direction.

144

_______

Chapter 8: The Managerial Leader as Linker Overall General Interpretation Guidelines: This self-assessment is intended to help you examine the actions you take when linking and coordinating resources. Linker role practices with a rating of “4” or higher should be considered strengths. Practices rated “2” or lower are likely areas for development. Use this self-assessment tool as a springboard to discuss with a trusted colleague or performance coach your self-rating.

145

This page intentionally left blank

Chapter 9

Behavioral Standards A set of standards to guide behavior in the organizational setting can be a valuable mechanism in building a strong, ethical workplace. Optimally, behavioral standards will help create an internal barometer, enabling employees to make sound ethical decisions on a daily basis. There will be times, however, when some within the organization need the external guidance of established standards to determine a proper response or course of conduct. Behavioral standards might include, for example, a statement such as “All salespeople will present product features honestly.” This standard should discourage dishonest sales presentations and is based on the organizational values of honesty and integrity. Behavioral standards are the third component in our Professional Proactive System (PPS) to value-centered managerial leadership: Values are at the center of the PPS, with the effective execution of managerial leadership roles and behavioral standards strengthening the system. Behavioral standards are used to reinforce an organization’s espoused values, offering concrete ways to operationlize those values. This chapter provides a description of behavioral standards, some important benefits, and a practical approach to develop them. As you proceed, remember that behavioral standards need to be aligned with your virtuous values.

What Are Behavioral Standards? Behavioral standards underscore what behaviors, actions, and decisions are important in an ethical organizational culture. They offer proactive guidance on how individuals can make decisions and behave ethically. For instance, standards might include a statement that “Recruitment and hiring practices shall not serve to 147

Value-Centered Ethics

discriminate against qualified individuals.” This is intended to encourage open hiring practices and is dictated by the values of fairness and justice. Effective behavioral standards help individuals recognize when they are at an ethical crossroads, and choose the ethical path consistent with the organization’s virtuous values. Organizations frequently employ traditional codes of ethics, which are rule-centered approaches to dictating behavior. Codes of ethics typically focus on rule compliance, general principles, and/or values, and tend to impose disciplinary action for violations. Codes of ethics fall into three types of categories: inspirational idealistic, regulatory, and educational-learning oriented. Behavioral standards within the Professional Proactive System (PPS), on the other hand, stress a virtuous values-centered approach to guiding behavior. The behavioral standards, while providing external guidance, are primarily intended to tap peoples’ internalized virtuous values. They become triggers to inspire people to do what is right and to learn from their experiences in grappling with ethical dilemmas. For those people whose internalized value system varies from that of the organization, behavioral standards can provide external guidance for ethical behavior. (A discussion of procedures and consequences in the event of ethical lapses follows in Chapter 10.) While the use of behavioral standards alone represents more of an “outside-in” approach to ethical managerial leadership, within the PPS approach, they are explicitly linked to a set of virtuous values that guide behavior from within.

Benefits of a System of Behavioral Standards The goal of building a strong ethical workplace culture is advanced through an organizational system of behavioral standards. Many aspects of the ethical workplace are fostered, such as: 1. Preferred behavior is pinpointed. Behavioral standards focus on the most important ethical considerations and define expected behavior. They communicate that ethical behavior is important and that your espoused virtuous values will be operationalized. They encourage discourse and dialogue 148

Chapter 9: Behavioral Standards

around ethical challenges. In this way, ethics can become part of daily organizational life. 2. Accountability is established. Virtuous values are translated into clear behavior expectations. Behavioral standards offer a sense of accountability, especially when the standards are taken seriously by management and supported by recognition and consequences. 3. Trust is engendered. Knowing that managerial leadership is paying attention to what is good and right enhances the trust that employees have in that leadership. Involving your people in the process of developing behavioral standards further promotes a sense of trust. Consistent reliance upon behavioral standards engenders trust that key ethical behavior is truly desired and that an organization’s espoused virtuous values will be operationlized. 4. The conceptual is linked to daily life. Behavioral standards serve to link theory to reality by showing how virtuous values can be operationalized through key ethical behavior patterns. When ethical behavioral standards are aligned with your virtuous values, ethical conduct is more likely to occur, especially when your people have actively participated in developing the standards. 5. Legal risks are reduced. Proactively specifying behavioral standards can significantly reduce the occurrence of ethical lapses and legal violations. In certain circumstances, even when legal violations occur, showing a good faith effort to prevent such violations can reduce the risk of financial penalties. Certain legislation, such as the Sarbanes-Oxley Act of 2002, requires public companies to implement codes of ethical conduct. Legal counsel can advise you as to when a good faith effort to avoid illegal behavior is necessary or otherwise might be used to reduce potential penalties. The U.S. Sentencing Commission’s Federal Sentencing Guidelines are also informative on this. 6. Awareness and expectations are heightened. Behavioral standards increase people’s awareness of ethical issues, even daily 149

Value-Centered Ethics

occurrences that they would not otherwise have considered to be an ethical choice (e.g., a salesperson accepting expensive gifts from a customer). When virtuous values are clear and behavioral standards are in place, ethical behavior becomes the expectation. 7. Inquiries are stimulated. As behavioral standards become commonly known and accepted, people are more inclined to seek each other’s opinions and perspective regarding ethical choices and behavior. Initiating dialogue and giving advice concerning ethics become part of the culture, bolstering ethical consciousness. 8. Ethical decision making is enhanced. Behavioral standards provide criteria on which to base ethical decisions. Established standards for ethical problem solving and decision making also provide a rational context within which to fairly review questionable ethical behavior. 9. Standards serve as a yardstick for ethical performance. The ethical performance of individuals, work teams, and the overall organization can be evaluated in comparison to behavioral standards. Comparisons can be used to determine “compliance levels” as well as highlight praiseworthy performances. This value-centered approach is intended to inspire, offer assistance in decision making, and help establish and maintain an ethically oriented workplace. The various aspects of the ethical culture impacted by these standards are broad ranging.

Developing Behavioral Standards So how do you go about developing ethical behavioral standards for your organization? Ethical standards need to be developed with active participation from organizational members, addressing specific key behaviors and ethical issues identified as needing attention. Ideally, behavioral standards will be established for each key work area. Based upon available research and resources, the following seven step approach to develop value-centered behavioral standards is offered. 150

Chapter 9: Behavioral Standards

Step 1: Laying the groundwork. Behavioral standards are an integral part of the Proactive Professional System (PPS) of ethical managerial leadership and should be developed within the context of organizational values and an integrated management system. During this initial step, several things need to happen. First, top management needs to communicate its commitment to this process and reinforce the importance of having behavioral standards throughout the organization that link with the core virtuous values. Second, an organization-wide Behavioral Standards Steering Committee needs to be formed with representatives from all key areas within your enterprise. This group will become a key linkage in the development and implementation of your behavioral standards. If possible, limit this group to ten members. Third, select two members of this steering committee as co-chairs, one being primarily responsible to lead the committee in developing and organizing a plan to write the behavioral standards and gain necessary approvals. The other co-chair will be the strategic project manager who oversees the steering committee’s work, including running meetings, confronting differences, and keeping the plan on track. With this step, the following are accomplished: 1. Top management has committed to the process and communicated its importance throughout the organization. 2. An organization-wide Behavioral Standards Steering Committee (BSSC) has been established. 3. Co-chairs of the BSSC have been selected, one responsible for “the plan” and the other in charge of the BSSC’s performance. Step 2: Begin linking virtuous values to specific behavior. Initially, the BSSC will review and clarify each of the organization’s virtuous values. (If organizational values have not been identified, or if they need to be further refined or updated, the BSSC in conjunction with top management will need to go through the process of identifying, refining, and updating the organization’s virtuous values.) In light of the organization’s espoused virtuous values, the BSSC will identify key ethical challenges that need to be addressed in each organizational area (for instance, in the research department of a securities brokerage 151

Value-Centered Ethics

firm, an issue might exist regarding exposure of stock analysts to individuals or companies that might be represented in that analyst’s buy/sell recommendation). From this, the BSSC will brainstorm various key behaviors to expect from individuals and groups within the overall organization and within different areas of the organization. The behavioral standards need to link to the organizational virtuous values. The ability of the BSSC members to model how behavioral standards align with virtuous values helps ensure that the standards will remain value-centered. This step ends when BSSC members have: 1. Reviewed and/or clarified organizational virtuous values. 2. Identified various ethical challenges, and brainstormed and discussed a variety of behavioral standards that guide behavior in the face of these challenges. 3. Explicitly linked potential behavioral standards to the organization’s virtuous values. Step 3: Seeking input regarding the greatest ethical challenges. Using the ethical dilemmas and behavioral standards compiled in Step 2 as talking points, the BSSC will gather information from various parts of the organization to identify key ethical issues and areas of potential problematic behavior for specific work areas within the organization. For example, potentially problematic areas that could benefit from behavioral standards in a sales department might include product representations, commissions, bonuses, and client relationships. Relevant ethical issues for a sales department might involve dealing with cross-cultural business transactions, confronting questionable entrenched industry norms, and establishing fair pricing structures. In this quest, the BSSC will divide the organization into key work areas, typically functional areas. Each member of the BSSC will be assigned to one such work area to facilitate the collection of relevant and useful information. This work area coordinator will establish a small work area project team to devise an appropriate 152

Chapter 9: Behavioral Standards

way to collect and process information from key stakeholders of that area (such as select employees, managers, and customers). Techniques to solicit input might include structured interviews, small focus groups, and/or questionnaires. Based on the BSSC talking points, the area coordinator will steer the content of discussions and questioning. The project team will then gather the information regarding key ethical issues and areas of potential problematic behavior as planned and, with the area coordinator, organize the information received, capturing its essence. The coordinator will report this information to the BSSC. At the conclusion of this step, the following should be completed: 1. Establish a meaningful way to organize the various work areas within the organization, perhaps around key functional work groups. 2. Assign each BSSC member to one of the organizational work areas, becoming the work area coordinator. 3. Each work area coordinator forms a work area project team. 4. The work area coordinator and project team devise and implement a practical and appropriate program to gather needed information. 5. The work area coordinator and project team organize and prepare the information gathered for the coordinator’s presentation to the BSSC. Step 4: Fashioning a system of value-centered behavior standards. Addressing the key issues identified relating to potential ethical situations, each work area coordinator will develop an initial draft of value-centered behavior standards for that work area. In most cases, standards should be written for specific work areas within your company. The behavioral standards should cover circumstances in the following four areas: ✥

Recurring issues and situations

✥

Opportunities that positively help differentiate you from your competitors and/or industry practices 153

Value-Centered Ethics ✥

Non-negotiable behavior where there is a zero tolerance for activity outside of a prescripted norm

✥

Relevant compliance requirements

Link each behavioral standard to one or more virtuous core values. Definitions and examples are helpful. By way of illustration, consider an accounting department having trouble with employees using company supplies and computers for personal business. The behavioral standard to address this situation might be that “Company supplies and resources are to be used for the benefit of the company and customer needs.” This links to the values of honesty and integrity. In another context, a behavioral standard for a sales division may state “Be responsive, respectful, and helpful to customers.” This would be linked with the organization’s value of transcendence—satisfied customers are necessary and integral to the continued success of the overall organization. An example of this behavioral standard in operation might be “Responding to all customer inquiries within 24 hours.” As part of the system, procedures should be created to enable employees to ask questions about the behavioral standards and to report possible violations comfortably. Effective methods, such as ethics hotlines, must be established to provide confidentiality for those who report violations. These measures are especially important in light of studies showing that people in organizations are often reluctant to report behavior in violation of standards for fear of retaliation. In this step, the following should be accomplished: 1. The work area coordinator will draft written behavioral standards for identified key ethical issues for his/her work area and tie them to organizational values. 2. The work area coordinator will specify examples of behavioral standards. 154

Chapter 9: Behavioral Standards

3. The BSSC will establish mechanisms for people to inquire about aspects of the behavioral standards. 4. The BSSC will establish procedures to report violations of ethical standards. 5. The BSSC will ensure the confidentiality of individuals who report violations. Step 5: Feedback, approvals, and commitments. Work area coordinators will submit their proposed standards to the BSSC to review, coordinate, and finalize the behavioral standards submitted. In turn, the BSSC will submit a final draft to top management for their review and comment. It may also be useful to gain input from other key stakeholders. In public companies, the Sarbanes-Oxley Act mandates that this review include the audit committee and board of directors. During its review, the board of directors may similarly choose to develop behavioral standards relating to its areas of responsibility. The CEO or top management team will provide the gathered feedback to the BSSC, which will make appropriate revisions. Legal counsel should then review the document to give input regarding compliance with applicable laws and regulations. When legal counsel’s feedback has been incorporated, the revised behavioral standards document is ready to be distributed to select organizational members for feedback regarding clarity, relevance, and importance to maintaining the highest level of ethical standards. After incorporating these last suggestions, if acceptable to the BSSC, the document is ready to obtain final approval from the appropriate person or body (e.g., the CEO and the board of directors). Upon final approval, the BSSC will meet, committing to work together in Step 6 and to connect behavioral standards to relevant organizational results. This commitment will serve to underscore the importance for all work areas to link specific behavioral standards to performance outcomes. 155

Value-Centered Ethics

During this step, the following tasks will be undertaken: 1. The BSSC will review, revise, and coordinate the distribution of draft behavioral standards to top management and others as appropriate. 2. Top management and the specified others will review and comment on the behavioral standards. 3. Legal counsel will review and comment on the revised behavioral standards. 4. Behavioral standards will be reviewed by select managers and employees. 5. A final behavioral standards document is prepared. 6. Final approval of the behavioral standards document from the CEO and/or the board of directors is obtained. 7. BSSC members commit to reinforce the linkage of behavioral standards to performance outcomes in Step 6. Step 6: Moving into action. As you implement your new system of ethical behavioral standards in the organization and specific work areas, how you introduce the system and train your people in its application is critical. Start with a presentation from top management or the CEO. Later discussions and implementation of your standards, to the extent possible, can be integrated into existing communication structures and training mechanisms. For highest probability of success and acceptance, the system should be presented and administered by managerial leaders who have effective interpersonal influence skills (see Chapter 5). To present and integrate your system throughout the organization, consider the following: ✥

Have top management effectively communicate the behavioral standards to all personnel.

✥

Share the system of behavioral standards with appropriate key stakeholders.

✥

Whenever possible, relate the behavioral standards to your organization’s mission, core virtuous values, management practices, and performance outcomes. 156

Chapter 9: Behavioral Standards ✥

Establish ways to link daily operations to the practice of the behavioral standards.

✥

Attempt to “catch” employees acting in alignment with the behavioral standards. Provide meaningful and appropriate recognition to individuals and groups who model desirable behavior (see Chapter 10).

To ensure full awareness and understanding, present a series of training workshops that provide learning forums, allowing personnel to practice and apply behavioral standards to daily dilemmas. In these workshops, explicitly link each behavioral standard to your organization’s virtuous values and performance goals/outcomes. This will help reinforce those values as part of employees’ internal value structures. In Step 6, you should have completed the following tasks: 1. Have top management communicate the system of behavioral standards to the organization and, thereafter, align the system with the current operating environment. 2. Present behavioral standards to key stakeholders. 3. “Catch” groups and individuals modeling behavioral standards and recognize them for their behavior. 4. Lead a series of training workshops, using them as learning forums to practice and apply behavioral standards. Step 7: Continuous reviewing and fine tuning. The development, implementation, and fine tuning of your behavioral standards make up a dynamic process. While built upon stable virtuous values, behavioral standards need to be regularly reviewed and fine tuned as dictated by the successes and shortcomings of the written standards. The standards should be regularly updated to reflect additional information and situations that might have surfaced both within and outside of the organization. It is advisable to form a new BSSC every 12 to 24 months to review your system. Publicly held companies need to review compliance with relevant key requirements and reporting obligations. Public 157

Value-Centered Ethics

companies need to keep abreast of relevant recommendations and regulations established by various regulatory bodies, including the Securities and Exchange Commission. At the end of this step, the following should have been accomplished: 1. Recognize that your behavioral standards development process is dynamic and ongoing. 2. Commit to establish a new BSSC every 12 to 24 months. 3. Commit to review recommendations and applicable regulations regarding reporting and review (especially for publicly held companies). With the completion of the first six steps and the ongoing monitoring of Step 7, your system of behavioral standards should be well established. Ongoing application of the behavioral standards can be integrated into a managerial leader’s management roles. Operationalization of organizational values through behavioral standards will be bolstered through a system of reward and consequences, as discussed in Chapter 10.

Summary Behavioral standards encourage ethical behavior, offer guidance in facing ethical decision points, and ultimately work within the context of the PPS to build an ethical work culture. Your behavioral standards should be continuously linked to your virtuous values. To help you in your endeavors with the behavioral standards development process, work through the Behavioral Standards Development Checklist below.

The Behavioral Standards Development Checklist Instructions: Consider each task as you plan for and implement your behavioral standards development process. Check off each task as you complete it during the process.

158

Chapter 9: Behavioral Standards Task

Done

1. Review reasons to establish behavioral standards; commit to the process. 2. Obtain top management commitment to the process. 3. Establish organization-wide Behavioral Standards Steering Committee (BSSC). 4. Select co-chairs for BSSC. 5. Review and clarify (or establish, refine, and/or update) the organization’s virtuous values. 6. Preliminarily identify key areas of ethical challenge, and brainstorm potential behavioral standards. 7. Establish work area coordinators. 8. Establish work area project teams. 9. Gather input and information concerning key ethical issues and problem areas within each area of the organization. 10. Draft behavioral standards for each work area. 11. Link the behavioral standards to virtuous values. 12. Develop practical examples of behavioral standards. 13. Establish a procedure for people to ask questions about standards.

159

Value-Centered Ethics 14. Establish a procedure to ensure confidentiality for people reporting ethical violations. 15. Have top management and key stakeholders review and comment on draft standards. 16. Have legal counsel review and comment on behavioral standards. 17. Ensure that behavioral standards comply with regulatory requirements (especially for publicly held companies). 18. Distribute an advance copy of behavioral standards to a select group of managers and employees for additional feedback. 19. Obtain final CEO and board approvals before releasing the document. 20. Present the system to the organization. 21. Develop an effective communication and training program to practice and apply behavioral standards. 22. Establish a program for continuous review, and fine tuning of standards. Use the above checklist as a springboard to discuss with a trusted colleague or performance coach your process of developing and implementing behavioral standards. You will enjoy more success if you use effective interpersonal influence skills to develop and implement the system.

160

Chapter 10

Managing Consequences As managerial leaders work to increase their ethical behavior and the ethical behavior of their people, they need to define and/or identify what behavior is desired and what behavior is not desired. One way to do this is to establish ethical behavioral standards, as discussed in Chapter 9. The effective managerial leader will tailor his or her managerial practices in such a way as to effect desired behavior and discourage undesired behavior. How a manager responds, or doesn’t respond, to certain behaviors will serve to encourage or discourage that same behavior in the future. We call the response (or lack of response) to behavior a “consequence” to that behavior. Consequences are the “C” in the basic A-B-C Model we reviewed in Chapter 1. Managing consequences, or responses to behavior, is an important function for managerial leaders as they strive to establish an ethical work environment. In this chapter, we will review the nature of consequences and how they operate to help you shape and sustain ethical behavior. A specific approach and specific practices for managing behavioral consequences are offered.

Revisiting the A-B-C Model Introduced in Chapter 1, the “Antecedents–Behaviors– Consequences Model” is a systematic way to examine cause and effect in human behavior. In summary, all behavior has at least one preceding antecedent, something that influences or triggers behavior, which is the action or what we say, do, think, or feel; and consequences are a result of, or response to, that behavior. For example, hunger (antecedent) prompts eating (behavior), which causes the feeling of being full (consequence). Consequences also affect how we behave in the future. For instance, eating too much causes physical discomfort (consequence), which will tend to cause you to eat less the next time you eat (shaping future behavior). The key to effective 161

Value-Centered Ethics

behavior management is knowing that consequences are also powerful in shaping future behavior. In addition to using consequences as a way of responding to employees’ behavior, the sophisticated managerial leader will use consequences for past behavior in such a way as to shape and drive future behavior. For example, you asked your assistant to prepare a report (antecedent); the assistant worked very hard, completing the report on time (behavior), then you praised your assistant for his or her timeliness and effort (consequence). As a result of your specific praise of effort and timeliness, your assistant feels satisfied that his or her efforts were acknowledged and appreciated, and he or she is more likely to behave this way (working hard to meet job demands in a timely fashion) in the future. It is a proven maxim of behavioral management that, over time, consequences have significantly greater impact on behavior than do antecedents. The diagram of the A-B-C Model in Figure 10-1 further illustrates key aspects of the concept.

Figure 10-1: A-B-C Framework A

B

C

Antecedents

Behaviors

Consequences

Events that precede behavior.

What a manager or employee says, does, thinks, or feels.

Events that follow behavior.

Need to be aligned with consequences for sustained impact on behavior.

Behaviors must be clearly pinpointed and defined in measurable terms.

Strengthen, maintain, or weaken future behavior.

Tend to be over utilized in relationship to consequences.

Positive reinforcement is the preferred consequence.

Influence about 20% of what we do.

Influence about 80% of what we do.

Adapted from: Braksick, L. W. (2000). Unlock behavior, unleash profits. NewYork: McGraw-Hill.

162

Chapter 10: Managing Consequences

In managing your people to shape specific ethical behavior, consider three critical areas. First, identify the antecedents associated with the pinpointed ethical behavior. Antecedents can include such things as the behaviors of others, written requests, mission statements, goals/objectives, training, and our Proactive Professional System (PPS) including virtuous values, managerial leader action roles, and behavioral standards. Second, identify the consequences that you would like to have associated with the pinpointed ethical behavior. Consequences can include a simple “attaboy,” public praise and acknowledgement, and formal rewards. Consequences can also be negative, such as reprimands, withdrawing decisionmaking authority, or with dramatic ethical lapses, termination. For the most impact on behavior of your people, antecedents and consequences will be aligned with each other. The third area to consider in shaping ethical behavior of your people is the positivity, immediacy, and certainty of the consequences flowing from the specific behavior. Think of this as “PIC-NIC”: the consequences with the most impact will be “PIC” (positive, immediate, and certain) rather than “NIC” (negative, immediate, and certain). This analysis was developed by Dr. Aubrey Daniels, as detailed in his book Bringing Out the Best in People (updated edition). Generally speaking, in shaping behavior, positive consequences are much more effective over time than negative consequences. Consequences are also more likely to shape behavior if they are immediate rather than delayed, and certain rather than uncertain. Strive to create as many “PICs” as possible to shape and sustain ethical behavior in your organization. Positive, immediate, and certain consequences are powerful! PIC Ethical Behavior Example Antecedent

Behavior

Consequence

PIC/NIC Analysis

Behavior Standard: Provide accurate and honest product information to customers.

Salesperson provides honest assessment of product features to customer.

Upon observing the presentation, sales manager praises salesperson.

The consequence is positive, immediate, and certain.

163

Value-Centered Ethics

Recognizing the powerful impact you can have on shaping behavior through consequences, let’s consider the various types of consequences.

Four Types of Consequences Consequences can be distinguished by their nature and their impact on behavior. Specifically, consequences are either added or removed following a behavior (contingent). Consequences are either desirable or undesirable. Finally, consequences can either increase or decrease the likelihood of a behavior occurring in the future. The interplay of these variables works to establish these generally recognized types of consequences: positive reinforcement, punishment, extinguishing or ignoring, and negative reinforcement. The relationships are depicted in Figure 10-2.

Figure 10-2: Four Types of Consequences Nature of C ons equence Des irable

C ontingency

Adding

Positive Reinforcement (behavior increas ed)

Undes irable B B

Punishment (behavior decreas ed)

B Removing

Extinguishing or Ignoring B (behavior decreas ed)

Negative Reinforcement (behavior increas ed)

As revealed in the graphic, positive reinforcement and negative reinforcement increase the likelihood that behavior will occur, while extinguishing (ignoring) and punishment decrease the likelihood that behavior will occur. 164

Chapter 10: Managing Consequences

1. Positive reinforcement. Positive reinforcement is giving something desirable in response to a behavior. The purpose of positive reinforcement is to maintain behavior and increase the likelihood that it will occur in the future. For example, a CEO asks the Human Resources manager to communicate the organization’s values as they relate to hiring practices to the hiring staff (antecedent), the HR manager presents the organizational values in a memo and at a department meeting to the hiring staff (behavior), then the CEO tells the HR manager how clear and motivating his or her presentation was to the staff (consequence—positive reinforcement). The impact of the positive reinforcement is that the HR manager will more likely communicate the organizational values again in the future. Positive reinforcement produces a work culture that becomes reinforcing in itself. People working in operating environments filled with positive reinforcement tend to exert more discretionary effort and experience higher levels of satisfaction. This typically translates into workforce results. The approach of providing positive reinforcement also makes the managerial leader more approachable and motivating to his or her people. This positive impact is effectively highlighted by Tom Rath and Donald Clifton in their book, How FULL is Your Bucket? Positive Strategies for Work and Life. 2. Negative reinforcement. Negative reinforcement occurs when something undesirable is avoided or removed as a result of a behavior. Negative reinforcement increases behavior—the behavior is strengthened and reinforced (more likely to occur) in order to avoid or escape an undesirable event. For example, an employee complies with (behavior) a written behavioral standard (antecedent) in order to avoid a reprimand (consequence). Compliance is the behavior that is negatively reinforced. Unlike positive reinforcement, this type of consequence merely increases compliant behavior. Extra discretionary effort is not enhanced. 3. Punishment. Punishment, or punitive action, occurs when an undesirable consequence follows a behavior. Punishment 165

Value-Centered Ethics

serves to decrease the chances of that behavior occurring in the future. The most effective punishment is negative, immediate, and certain (NIC). For example, being told to “shut up” at a meeting would likely limit your participation at that meeting. It is important to note that punishment is upsetting to the recipient. While highly effective in limiting undesirable behavior in the short term, punishment should not be used frequently because it has a dramatic negative effect on employee morale and motivation over the long haul. 4. Extinguishing. Extinguishing or ignoring is the act of removing or withholding positive reinforcement for a particular behavior. Ignoring behavior, or withholding expected positive reinforcement, tends to extinguish behavior. For example, a manager asks a staff member to prepare a presentation for a meeting (antecedent) and the staff member puts in extra time to complete the presentation (behavior), but the boss does not call on him at the meeting to make his presentation (consequence). By ignoring the employee’s efforts in this way, the manager is decreasing the likelihood that this employee will exert extra effort for this manager in the future (i.e., put in discretionary effort to perfect a presentation). Extinguishing is not the same as punishment. It is withholding reinforcement or ignoring behavior, while punishment provides a punitive consequence. Punishment decreases behavior immediately. Extinguishing, on the other hand, can produce a “soda machine effect”: when a soda vending machine takes your money without delivering the soda, you are likely to bang on the machine a few times to try to get the soda (reinforcement). Similarly, when reinforcement of behavior is withheld, an immediate increase in the rate of behavior is likely to take place, in an attempt to get that reinforcement. After the initial spike in behavior, the behavior being ignored will subside (you stop banging on the machine). While all four types of consequences may play a role in an organization, positive reinforcement is the most powerful tool for managers to shape ethical behavior. Consequently, I want to emphasize the power of positive reinforcement and how best to deliver it. 166

Chapter 10: Managing Consequences

Delivering Consequences The balanced and effective delivery of consequences to influence behavior constructively is a key ethical responsibility of managerial leaders. The type of consequences that a managerial leader delivers will help define how he or she is perceived. The type of consequences used also influences an organization’s culture, whether it is a “must do” culture or a “can do” performance-oriented culture. Managerial leaders who primarily use punishment and/or ignoring (extinguishing) will likely be seen as unapproachable, hard-nosed, and threatening. Punishment focuses the performer on what not to do, rather than what is expected, meaning that full potential will likely not be realized. Punishment engenders negative emotions, inhibiting learning and high performance. Fear, for example, is not an effective tool to sustain peak performance. While punishment stops the behavior, it does not provide a constructive alternative. When behavior is simply ignored, there might be a “spike” in behavior, i.e., the “soda machine effect.” Over time, the targeted behavior will be extinguished and other less desirable behaviors might occur. Frustration and anger might result. This type of consequence requires a much longer time frame before behavior is influenced. The managerial leader might be accused of not following through on his or her commitments. The reliance on negative reinforcement to influence others yields an orientation toward mere compliance rather than performance. Since negative reinforcement typically involves threats, the leader using primarily negative reinforcement is perceived as coercive, threatening, and unapproachable; employees in this environment often do the minimum amount of work needed to escape or avoid the undesired consequence and no more. In contrast, when delivered effectively, positive reinforcement can motivate performers to maximize their performance and exceed expected performance levels. Positive reinforcement is a management leadership tool that encourages discretionary effort, including good citizenship behavior integral to building an ethical work culture. It is in this environment of positive reinforcement that an ethical performance culture can thrive. The managerial leader who 167

Value-Centered Ethics

uses primarily positive reinforcement is perceived as fair, motivating, and approachable. While certain situations require negative reinforcement or punishment, on balance, positive reinforcement is the consequence of choice for ethical managerial leaders. In managing consequences and to ensure that positive reinforcement is applied effectively, I recommend the following five-step approach to delivering positive reinforcement.

Five Steps to Managing Positive Reinforcement Step 1: Pinpoint specific desired behavior. What behavior do you want to encourage? Define desired behavior in clear, specific, and observable terms. For example, if you want salespeople to respond quickly to customer e-mail requests and inquiries, don’t say to salespeople “Respond to customers as best you can.” Instead, you might set a behavioral standard that “Salespeople will respond to all customer e-mails requesting information or clarification within 24 hours.” Step 2: Create menu of positive reinforcement. Ultimately, it is the recipient who decides whether a consequence is reinforcing. To help determine what will be reinforcing, ask or watch your people to better understand what things have positive reinforcement value. Drs. Gary Martin and Joseph Pear at the University of Manitoba classify most positive reinforcers into five categories: ✥

Consumable reinforcers. What does the performer like to eat or drink?

✥

Activity reinforcers. What does the performer like to do?

✥

Manipulative reinforcers. What types of games and toys does the performer prefer?

✥

Personal reinforcers. What kinds of personal items might a performer like to receive, e.g., items for hygiene, for the home, for travel, etc.?

✥

Social reinforcers. What kinds of public comments will be reinforcing? 168

Chapter 10: Managing Consequences

A variety of useful resources exists to help managerial leaders create an appropriate reinforcement menu. One excellent book is by Dr. Bob Nelson, 1001 Ways to Reward Employees. After extensive research, Dr. Nelson has developed a practical framework for administering positive reinforcers. He divides recognition into three broad categories: informal rewards, rewards for specific achievements or activities, and formal rewards. His book is a good reference to identify specific positive reinforcers. Dr. Nelson has also authored two surveys to help identify positive reinforcers: the Recognition Practices Inventory (RPI) and the Recognition Practices Inventory for Managers, both published by HRD Press. The RPI is an employee survey to determine what employees want most as rewards for performing well. It also measures what types of recognition employees currently receive for good performance. This inventory allows for the prioritizing of 13 factors of recognition, such as electronic praise, cash or cash substitutes, and autonomy/authority. Additionally, consider involving your people in creating a menu of reinforcers. Ask what they would like to have or do when they perform well, and then have them prioritize and weight the importance of each reinforcer on a scale of 1 to 10. From this input, create a positive reinforcement menu—a simple list of prioritized items that each individual perceives as desirable—for each employee. You will then look to the appropriate menu when planning positive reinforcement of targeted behavior. Reinforcement menus, whether derived from formal questionnaires or informal surveys, can be a valuable reference as you and your management team seek high impact from your positive reinforcement. Menus can be made available to others within the organization seeking to give desirable reinforcement. Step 3: Plan for delivery. In planning for the delivery of positive reinforcement, link the key behaviors that you want to increase with a performer’s highest priority positive reinforcers. When consulting the performer’s reinforcement menu, determine what is realistic and practical to deliver. Will the reinforcement be expected or will it be 169

Value-Centered Ethics

“planned unexpected” recognition? With the former, the recipient knows that positive reinforcement is coming, but with the latter, the performer is surprised. Planned unexpected recognition can be very powerful. One CEO client used this approach with his senior vice president of Sales to reinforce and recognize seven consecutive quarters of increased profitable sales with consistent customer ratings of “high integrity” for the sales force. He requested that the SVP accompany him on an important appointment; however, the CEO drove to a haberdashery where the SVP was fitted for three new high quality suits. The SVP was stunned and full of appreciation. He continued to achieve very high sales numbers while maintaining high integrity within the sales force. Step 4: Effective delivery. Skillful delivery of positive reinforcement fosters discretionary effort. Discretionary effort can raise performance from good to great, creating a competitive advantage for an organization. Over time, managerial leaders who effectively plan for and deliver positive reinforcement will outperform those who do not. Use the following guidelines for your delivery of positive reinforcement: 1. Link “As” to “Cs” to get consistent “Bs.” Remember that an antecedent (A) is more powerful when it signals that a certain desirable consequence (C) is coming, helping to shape and maintain behavior (B). A consistent connection between antecedents and consequences establishes trust. In this way, the organizational environment is more predictable and enhances performance. 2. Preview the contingencies. Before delivering positive reinforcers, make sure that the performer(s) understand the contingent relationships. Make it clear what behaviors are needed to produce positive desirable consequences. 3. Diversify positive reinforcement menu. Performers can become “satiated” with a diet of the same reinforcers. Use a variety of types of positive reinforcers to keep it interesting and motivating. Refer to individualized reinforcement menus in selecting reinforcers. 170

Chapter 10: Managing Consequences

4. Make it immediate. Reinforce desired behavior immediately. This highlights the association between the behavior and the positive event. 5. Be specifically positive. Praise using specific positives is credible. You will be considered insincere if you make general platitudes like “great job,” “good job,” “nice job,” etc. I recall a client who would walk around various stores within his retail chain and bark out “looks like diamonds.” He received poor ratings in employee surveys, owing largely to his poor positive reinforcement delivery skills. 6. Pair socials with tangibles. Social reinforcement (i.e., public praise) is effective to motivate others. To maintain the strength of social reinforcers, however, occasionally pair them with some type of desired tangible reinforcement. Social reinforcers also help wean performers off a steady diet of tangible reinforcers, which can be costly. Keep your reinforcement menus close at hand to help you intermittently deliver desirable tangibles along with social reinforcement. 7. Eliminate the “buts.” The power of positive reinforcement is diluted by praising and at the same time asking for better performance in another area. Do not say “Good job, but. . . .” 8. Practice the “4-to-1 Rule.” Typically given with emotion and specifics, negative feedback tends to make a bigger impact than positive feedback; however, the impact of negative feedback is generally not motivating or reinforcing. To be perceived as giving an equal number of positives and negatives, give four positive reinforcers for each instance of negative feedback given. 9. Separate positive reinforcement from punishment. Positive reinforcement should not be accompanied by punishment. While this might be efficient, punishment given at the same time completely negates the impact of positive reinforcement. Both positive reinforcement and punishment have a time and place, but not together. 171

Value-Centered Ethics

10. Probe—“How did you do it?” This important open-ended question facilitates discussion about successful experiences. It is very reinforcing for individuals to explain what they did to be recognized. Delivering recognition in the form of positive reinforcement is a powerful tool to shape and maintain ethical behavior. To be effective in delivering positive reinforcement, however, the managerial leader needs to be strategic, to be thoughtful, and to work to deliver his or her positive reinforcement with as much impact as possible. Step 5: Assess impacts and troubleshoot. The primary purpose of applying positive reinforcement is to increase desired behavior. Did your five-step process accelerate the desired behavior(s)? Remember that the ultimate judge of whether an event is desirable or positive is the performer. If your impact is coming up short, troubleshoot your weakness(es) in these areas: 1. Is the desired behavior clearly defined? 2. Are the antecedents clearly specified? 3. Are the consequences (positive reinforcers) appropriate and relevant to the behavior? 4. Is my reinforcement plan effective? 5. Is my delivery effective? Incorporating these five steps of managing positive reinforcement into your management system can significantly help you focus your positive reinforcement strategy for high impact. Managing positive reinforcement is critical to your effectiveness as a managerial leader.

Consequences in Summary The effective management of consequences is a cornerstone to effective managerial leadership. It takes an understanding of the A-B-Cs of human behavior, and of how consequences work in this framework, to influence behavior. Of the four basic consequences, positive reinforcement is the preferred mode to shape and maintain behavior. 172

Chapter 10: Managing Consequences

Delivering positive reinforcement is a specific skill area. To assess where you are in this important dimension of managerial leadership, take the Managing Consequences of Ethical Behavior SelfAssessment Survey below.

Managing Consequences of Ethical Behavior Self-Assessment Survey Instructions: Rate yourself on the scale below (1–5) for each statement as it relates to your management of consequences. Your ratings indicate how often you act in the manner desired. Rating Scale: 1 Almost never

2 Sometimes

3 Half of the time

Managing Consequences

4 Often

Rating

1. I understand the functional relationship between antecedents, behaviors, and consequences as they relate to ethical behavior.

_______

2. I use positive reinforcement to influence ethical behavior.

_______

3. I do not use extinguishing (ignoring) to influence ethical behavior.

_______

4. I do not use negative reinforcement to influence ethical behavior.

_______

5. I do not use punishment to influence ethical behavior.

_______

6. I pinpoint desired ethical behaviors in specific/ observable terms.

_______

173

5 Almost always

Value-Centered Ethics 7. I use reinforcement menus to help influence ethical performance.

_______

8. I establish effective positive reinforcement programs to help shape ethical behavior.

_______

9. I deliver positive reinforcers effectively to ensure ethical behavior.

_______

10. I regularly check the impacts of positive reinforcement programs on ethical behavior.

_______

General Interpretation Guidelines: This self-assessment survey is intended to help you examine the actions you take when managing consequences. Any action with a rating of “4” or higher should be considered a strength. Any item rated “2” or lower is likely an area for development. Use this self-assessment tool as a springboard to discuss with a trusted colleague or performance coach your self-rating.

174

Chapter 11

Putting It All Together: A Self-Management Approach The practices for ethical managerial leadership offered in this book bridge the gap between philosophical discussions about ethics and the personal opinion pieces that appear regularly in the popular press and media, stating that people need to be more ethical. Putting it all together into a practical resource package for you, I will quickly summarize the key ethical managerial leadership practices we have reviewed, walk you through a self-management development program, and offer ways to assess your success. Bear in mind our major premise: what you do as a managerial leader is critical in determining whether people behave ethically within an organization.

Key Ethical Managerial Leadership Practices There are a dozen essential practices you should be able to execute to enhance your ethical managerial leadership. Here is a brief summary of them. Practice #1: Having a working knowledge of the A-B-C concept of behavior. Too often, ethics are left to philosophical discussions or to become a topic for armchair ethicists. The A-B-C Model of Behavior, however, is a practical, scientifically proven approach to analyzing behavior, which can be applied more narrowly to ethical behavior and the practice of ethical managerial leadership. I encourage you to read more about this applied behavioral analysis approach (see the Reference and Resources section). Unfortunately, there are few published practical applications of this approach to enhancing ethical managerial leadership. Practice #2: Recognizing the importance of virtuous values, managerial leader actions, and behavioral standards in shaping 175

Value-Centered Ethics

ethical behavior. Virtuous values, managerial action roles, and behavioral standards are all key antecedents that managerial leaders can use in ethical managerial leadership. These three components, when incorporated into managerial practices, help prompt ethical responses to ethically challenging situations. Practice #3: Providing proactive professional responses rather than personal reactions to ethical challenges. Strong managerial leaders apply professional frameworks and tools to improve work culture and performance. Likewise, in managing ethics in the workplace, managerial leaders need to have a professional approach to managing ethical behavior and applying professional frameworks and tools. Virtuous values, ethically applied managerial action roles, and selective behavioral standards are integral components of this professional approach. We have referred to the core of this program as the Proactive Professional System (PPS). Without a professional system, your responses will likely be haphazard and inconsistent. Practice #4: Recognizing and managing your tendencies toward derailment. As part of self-awareness, managerial leaders need to recognize and manage the 15 derailers reviewed in Chapter 2. Of particular concern are those managerial leaders who manage with “fuzzy” values, without a professional system. These derailers often cause otherwise good people to do bad things. (Refer to Ethical Behavior Derailment Self-Assessment Survey, Chapter 2.) Practice #5: Identifying and assessing your motivations to managing ethically. While ten specific motivations for managing ethically were reviewed, two are pivotal to value-centered managerial leadership as espoused in this book. First and foremost, value-centered leaders believe that managing ethically is the right thing to do. They hold a set of values that are virtuous. Second, they believe that business results are improved by managing ethically. (Refer to Motivation to Manage Ethics Self-Assessment Survey, Chapter 3.) Practice #6: Clarifying, espousing, practicing, and measuring your virtuous values. Values management is critical. Certain virtuous values appear to be universally accepted, such as wisdom and knowledge, self-control, justice and fair guidance, transcendence, 176

Chapter 11: A Self-Management Approach

love and kindness, and courage and integrity (see Chapter 4). Be clear about your own values so that you can communicate them meaningfully to stakeholders. Equally important, you need to be able to “walk your talk” (i.e., live your values, practice what you preach). Track how clear and effective you have been by measuring the strength of these values in your organization. A starting point is the Virtuous Values Managerial Leadership Self-Assessment Survey in Chapter 4. While you might want to add or delete values to or from this assessment, the important point is for you to be able to clarify, espouse, and practice your virtuous values. Practice #7: Assessing and practicing interpersonal influence skills. To be effective, a managerial leader needs to be able to influence people. Interpersonal influence skills improve your ability to get things done through people. These are people skills that, when applied appropriately, communicate competence and professionalism. (Refer to Managerial Leader Influencer Role Self-Assessment Survey, Chapter 5.) Practice #8: Assessing and practicing the director role. Managerial leaders have a responsibility to communicate the direction and goals of the organization to their people. This involves documenting a clear direction and communicating it in a clear and motivating manner. (Refer to Managerial Leader Director Role Self-Assessment Survey, Chapter 6.) Practice #9: Assessing and practicing the focuser role. A professional approach to focusing people on the most important things that they can influence is essential for high performance. People are energized when they focus their talents on meaningful and important assignments, regardless of their position within an organization. This process relies heavily on your interpersonal influence skills and your ability to implement performance management methodologies. The result is high performance. (Refer to Managerial Leader Focuser Role Self-Assessment Survey, Chapter 7.) Practice #10: Assessing and practicing the linker role. Coordinating and linking organizational resources is a demanding responsibility of managerial leaders, fraught with ethical challenges. 177

Value-Centered Ethics

Resources need to be assessed and allocated fairly. People want to be treated fairly and get the resources needed to perform well. Most major corporations are challenged in this area because of the large compensation packages that CEOs receive. In 2002, the average CEO of a major corporation was paid approximately 250 times the earnings of the average employee. Among other things, this is an issue of fair resource allocation and will become an increasingly visible and important topic of debate. (Refer to Managerial Linker Role Self-Assessment Survey, Chapter 8.) Practice #11: Developing and implementing behavioral standards that encourage ethical behavior. Behavioral standards can prompt us to perform ethically. When professionally and systematically developed, they help alert people to ethical challenges and reinforce what are the most important areas for ethical functioning. They are behavioral cues to help us do what is right. (Refer to the Behavioral Standards Development Checklist, Chapter 9.) Practice #12: Managing behavioral consequences to enhance ethical behavior, primarily through positive reinforcement. Ethical behavior is shaped and maintained by behavioral consequences. The management of those consequences will greatly impact the work culture and how the manager is perceived. A manager who gives too much negative reinforcement and/or punishment will be seen as coercive and unapproachable. In contrast, a manager who effectively plans and delivers positive reinforcement will increase people’s efforts and will be seen as approachable and encouraging. (Refer to Managing Consequences of Ethical Behavior Self-Assessment Survey, Chapter 10.) These practices can be integrated into a practical approach to managing yourself so as to enhance your ethical leadership. As you review this approach, think about how you can adapt it to your specific organizational situation.

A Self-Management Approach When asked, most people report that their behavior is more ethical than average. Considering the widespread ethical breaches in U.S. 178

Chapter 11: A Self-Management Approach

businesses today, it would appear that people are not forthcoming when they report about their ethics. Indeed, in response to the inquiry “Are you ethical?” there is little variability in people’s scores. In view of people’s reluctance to admit openly to ethical shortcomings, public discourse on how we can behave more ethically is a nonstarter. Alternatively, I propose that you start from within, using a self-management approach to assessing and improving your practice of ethical behavior and using this as a platform for managing the ethical behavior of others. Ethical managerial leadership requires self-control, self-management, and selfimprovement. The approach I propose is based on your set of virtuous values, an effective approach to management and selected behavior standards. This approach is adapted from the field of self-directed behavior change; it offers a practical framework for assessing and changing ethical behavior patterns. While experts like Drs. David Watson and Roland Tharp have extensively researched and applied self-directed strategies to personal adjustment, very little has been extrapolated to ethical behavior within a managerial leadership context. What follows is an adaptation of some of the frameworks and tools of self-directed behavior change to ethical behavior. I will outline a five-step model that works as a cycle of self-improvement, and walk through a practical application of the model. A Five-Step Model This is a model for managing your practice of ethical behavior, which is the springboard for managing the ethical behavior of others. The steps are sequential, each describing the primary objective and the key tasks involved.

Step 1: Assessing Primary Objective: Identify ethical practice areas needing improvement. 179

Value-Centered Ethics

Key Tasks: ✥

Review each of the dozen managerial leadership practices summarized earlier in this chapter.

✥

Complete each of the self-assessment surveys found in Chapters 2 through 10.

✥

List practice areas where you have room for development and to improve your effectiveness at managing ethical behavior.

Step 1 yields a picture of your opportunities or areas in which you can develop to become a more effective manager of ethical behavior.

Step 2: Aiming Primary Objective: From your list of development opportunities, select two or three specific behaviors for your initial focus. Key Tasks: ✥

From the list of improvement opportunities identified in Step 1, list concrete examples of relevant behaviors to improve your ethical performance in these areas.

✥

From these examples, select two or three behaviors on which to focus as opportunities for improvement. These behaviors should be the most important and actionable areas for improvement.

✥

Identify what you want to modify as well as the circumstances/ situations where you want to make this change. Set specific goals or performance targets for change. Goals should be realistic yet challenging.

✥

Develop a practical and simple way to monitor the behavior(s) you want to change and record your progress.

At the end of this step, you will have identified specific behaviors to change as you improve your ethical leadership, set specific performance targets, and established self-monitoring methods.

180

Chapter 11: A Self-Management Approach

Step 3: Analyzing Primary Objective: Identify the As and Cs connected to the behaviors that you are aiming to change. Key Tasks: ✥

Make sure you are clear as to the behavior you are aiming to modify.

✥

Identify the events that precede the targeted behavior (antecedents) by asking who, what, when, where, and why questions.

✥

Identify the events that follow the targeted behavior (consequences).

✥

Document your analysis using the A-B-C Analysis Worksheet:

A-B-C Analysis Worksheet A (Antecedents)

B (Behaviors)

C (Consequences)

Who? What? When? Where? Why?

Be specific and clear

What took place following B? Was it perceived as positive or negative?

Step 3: Analyzing Antecedents

Step 2: Aiming

Step 3: Analyzing Consequences

✥

List the promoters likely to help or support your efforts, and detractors or barriers you expect to face as you work to change the targeted behavior.

Step 3 should produce a list of antecedents and consequences that surround the behavior you want to modify, and any promoters or detractors you may encounter. Antecedents and consequences should be clearly identified, and you should assess promoters and detractors realistically.

181

Value-Centered Ethics

Step 4: Action Planning Primary Objective: Document specific practical ways to modify your behavior to improve your effectiveness at managing ethical behavior using antecedents, consequences, and promoters to your advantage, and planning around detractors. Key Tasks: ✥

Specify two to five concrete actions that you will take to influence or impact the changes for each behavior you targeted in Step 2. Identify how and by whom these actions will be accomplished, and any assistance or resources that you will need.

✥

Develop a timetable of milestones and target dates for completing key actions.

✥

Determine the likelihood of obtaining needed assistance and resources; include only those that you can influence and that have a high probability of being available to you.

✥

Document your plan using a simple Action Planning Worksheet such as:

Action Planning Worksheet Actions

Who/How

When

Assistance/Resource

1.

1.

1.

1.

2.

2.

2.

2.

3.

3.

3.

3.

4.

4.

4.

4.

5.

5.

5.

5.

Done

Your action plan should capture the specifics of what you plan to do, presenting a road map to get there. A successful plan sets the stage for concrete action. 182

Chapter 11: A Self-Management Approach

Step 5: Taking Action and Adjusting Primary Purpose: Implement your action plan, making adjustments as needed. Key Tasks: ✥

Work to the plan; continuously review your goals to determine if you are making progress.

✥

Remind yourself of the things that promote the success of your plan and use this as encouragement to keep you on track.

✥

Monitor the detractors or potential sources of resistance operating against implementation of your plan; be proactive against derailment.

✥

Be flexible and willing to make adjustments in your plan. Needed changes might involve target behavior(s), antecedents, and/or consequences based on your observations and implementation experience.

Implementing your plan should help you enhance your ethical managerial leadership. Stay positive and flexible.

Managing Your Self-Improvement Cycle The five-step model of self-management represents a dynamic cycle of interconnecting steps, with considerable overlap and interdependence. Assessing your ethical practices sets the stage for you to identify the most important areas for self-improvement. Aiming your efforts on key behaviors to be modified is refined when you start analyzing these behaviors using the A-BC approach. Action planning requires that you integrate what you have learned from your behavioral analysis into concrete and practical plans to change the targeted behavior. Finally, improvement is achieved by taking action and adjusting your plan as appropriate. This self-improvement cycle should be managed as a dynamic interconnecting process.

183

Value-Centered Ethics

Self-Improvement: A Practical Application Consider Albert, a senior vice president of Sales for a large transportation company. The CEO and board of directors for this company have recently called for all senior executives, including Albert, to initiate a program of self-improvement to enhance their practice of ethical managerial leadership. Through his leadership, Albert needs to improve the ethical behavior of his sales division, including salespeople. To address this need, Albert applies the five-step self-improvement cycle to his management of his direct reports, the regional sales managers.

Step 1: Assessing After reviewing the managerial leadership practices and completing each of the self-assessment surveys found in Chapters 2 through 10, Albert identified “setting behavioral standards” and “using positive reinforcement” as areas where he could develop to improve his ethical managerial leadership.

Step 2: Aiming Albert was managing the sales division without clear expectations regarding ethical behavior; no behavioral standards had been established. Additionally, praise for ethical behavior was infrequent, and he rarely linked behavioral expectations to consequences. The result was that undesirable behavior became the norm as ethical behavior was ignored. Given Albert’s assessment of the situation, he decided to change the focus of his monthly regional manager sales meetings, dedicating a portion of each meeting to the discussion of ethical standards and expectations. He established two goals for changing the undesirable behaviors: 1. Develop and implement a set of behavioral standards for his sales management team. The team would in turn develop and implement a set of behavioral standards for the entire sales force. One behavioral standard is to have expense reimbursements 184

Chapter 11: A Self-Management Approach

comply with company guidelines for reimbursement, addressing the current problem of questionable or even personal expenses being reimbursed. 2. Albert also wanted to increase the quality and frequency of his recognition of sales successes. He would focus on his regional sales managers and provide more targeted recognition (positive reinforcement) based on compliance with published behavioral standards. In this way, he wanted to link his goal relating to behavioral standards with his goal of increasing his recognition of salespeople. Monitoring and tracking these behavioral goals became a matter of keeping records of and charting the successes (and failures) of himself and his team in achieving these goals.

Step 3: Analyzing Using the A-B-C Analysis Worksheet, Albert identified the antecedents and consequences connected to the behavior he wants to eliminate, namely allowing undesirable behavior because no behavioral standards or positive recognition goals exist to mold or encourage desirable behavior.

Albert’s A-B-C Analysis Worksheet A ✥ No clear behav-

ioral expectations ✥ No specific ethical goals ✥ Frequent verbal comments to “act ethically” ✥ Negative self-talk “salespeople are largely unmanageable”

B ✥ Allowing unde-

sirable behavior

185

C ✥ Ethical behavior

ignored ✥ Undesirable behavior becomes the norm, perpetuating itself

Value-Centered Ethics

Some promoters that help or support Albert in his effort to change this behavior are as follows: ✥

He expects to see significant improvement in meeting budget constraints by “cleaning up” expense reimbursement requests.

✥

He will be performing as the CEO and board requested to enhance his practice of ethical managerial leadership.

✥

Training in how to develop behavioral standards will be available to him.

✥

Training in the power of positive reinforcement will be available to him.

✥

This behavior change is consistent with Albert’s virtuous core values.

Detractors that might provide barriers or difficulties for Albert as he works to make the change include: ✥

His sales personnel want job autonomy, without a lot of supervision or oversight.

✥

The company’s compensation package for most sales personnel is not competitive, such that his salespeople feel “entitled” to receive more money from the company, even if it is by cheating on their expense reports.

✥

The CEO is a negative role model for positive reinforcement, providing no support in this area.

✥

It is common practice for salespeople to seek reimbursement of many personal or other non-sanctioned expense items.

✥

Company funds for employee development are limited.

With this analysis in hand, aware of his promoters and detractors, Albert proceeded to develop an action plan.

Step 4: Action Planning Albert specified the following concrete actions that he would take to influence his target areas of setting behavioral standards and 186

Chapter 11: A Self-Management Approach

using positive reinforcement to increase ethical behavior among sales personnel: ✥

Apply the systematic approach to setting behavioral standards presented in Chapter 9 of this book.

✥

One of the standards will address the accurate and timely reporting of expense reports by all sales personnel within company reimbursement guidelines.

✥

Design and implement an effective positive reinforcement system.

✥

Link positive reinforcers to compliance with selected behavioral standards.

187

Actions

Who/How

188

I. Developing Behavioral Standards: ✥ Designate time for development in monthly strategic sales meetings. ✥ Follow key actions for developing behavioral standards using the Behavioral Standards Development Checklist (Chapter 9)

Albert

II. Implement Effective Positive Reinforcement for Behavioral Standards: ✥ Identify menus of positive reinforcers for sales personnel ✥ Select specific behaviors within standards to reinforce ✥ Link positive reinforcement to specific standards ✥ Practice “planned unexpected recognition”

Albert/Sales Managers

When

First Quarter

Assistance/Resources The Behavioral Standards Development Checklist (Chapter 9)

Second through Fourth Quarters

✥ Recognition Practices

Fifth Quarter Sixth Quarter Seventh Quarter/Ongoing Ongoing

Inventory (RPI—Bob Nelson, Ph.D.) ✥ Recognition Practices Inventory for Managers (RPIM—Bob Nelson, Ph.D.)

Done

Value-Centered Ethics

Albert’s Action Planning Worksheet

Chapter 11: A Self-Management Approach

Step 5: Taking Action and Adjusting Working to implement his plan, Albert successfully developed selected behavioral standards for ethical behavior using the Behavioral Standards Development Checklist. Positive reinforcers were offered to strengthen ethical behaviors in sales personnel, including compliance with standards for accurately and in a timely way completing expense reports within company reimbursement guidelines. Several adjustments were made in the menus of positive reinforcers initially developed. Several regional sales managers and their salespeople were given “planned unexpected recognition” for their consistent performance across a variety of the behavioral standards. One unexpected detractor was the fact that one regional sales manager was not acting with justice or fairness: He maximized his own rewards by maximizing his bonuses and being unwilling to shift bonus dollars downward throughout his sales region. After an extensive period of guidance and coaching, he decided to leave the company.

Summary There is a set of managerial leadership practices that can enhance ethical behavior and guide your quest for improved ethical functioning in your workplace. These practices have been integrated with other tools into a five-step self-improvement program to help you more systematically change or fine tune your ethical behavior and/or the behavior of others. Ultimately, ethical managerial leadership requires self-control, self-management, and self-improvement. Value-centered ethics starts on the inside. Our virtuous core values help us manage with character and focus. To help you in your selfmanagement and management of ethical behavior, two surveys are provided. The first survey, Ethical Enhancing Managerial Leadership Practices, helps you assess yourself in relation to 12 essential practices. The second survey, Ethical Self-Management Practices, helps you index your self-management skills. These two rating scales are presented on the following pages. 189

Value-Centered Ethics

Ethical Enhancing Managerial Leadership Practices Self-Assessment Survey Instructions: Rate each statement (1–5) as it relates to your practice of ethical managerial leadership. Your ratings indicate how often you act in the manner desired. Rating Scale: 1

2

3

4

5

Almost never

Sometimes

Half of the time

Often

Almost always

Rating 1. I understand and apply the A-B-C Model of Behavior.

_____

2. I recognize the key role that virtuous values, managerial leader action roles, and behavioral standards play in prompting ethical behavior.

_____

3. I proactively provide professional responses to ethical challenges rather than “off the cuff” personal reactions.

_____

4. I recognize and manage my tendencies to act in ways that might derail me ethically.

_____

5. I know what motivates me to act ethically.

_____

6. I clarify, espouse, practice, and measure a set of virtuous values.

_____

7. I impact ethical behavior by practicing interpersonal influence skills effectively.

_____

190

Chapter 11: A Self-Management Approach 8. I impact ethical behavior by executing the director role effectively.

_____

9. I impact ethical behavior by executing the focuser role effectively.

_____

10. I impact ethical behavior by executing the linker role effectively.

_____

11. I use a set of behavior standards that encourages ethical behavior.

_____

12. I use behavioral consequences as I manage ethical behavior.

_____

General Interpretation Guidelines: This self-assessment survey is intended to help you examine the actions you take when managing ethical behavior. Any item with a rating of “4” or higher should be considered a strength. Any item rated “2” or lower is likely an area for development. Use this self-assessment tool as a springboard to discuss with a trusted colleague or performance coach your self-rating.

191

Value-Centered Ethics

Ethical Self-Management Practices Self-Assessment Survey Instructions: Rate each statement (1–5) as it relates to your practice of ethical self-management. Your ratings indicate how often you act in the manner desired. Rating Scale: 1

2

3

4

5

Almost never

Sometimes

Half of the time

Often

Almost always

Rating 1. I am assessing my practice of ethical managerial leadership.

_____

2. I am able to target behaviors for improvement.

_____

3. I am able to record and track my own ethical behaviors.

_____

4. I set goals for self-improvement.

_____

5. I can analyze the antecedents and consequences in an ethical situation.

_____

6. I can develop action plans to improve my ethical leadership.

_____

7. I can pinpoint concrete actions needed to act in an ethical manner.

_____

8. I can implement self-improvement plans that enhance my ethical managerial leadership.

_____

General Interpretation Guidelines: This self-assessment survey is intended to help you examine the actions you take when conducting a self-management program to improve or fine tune your practice of ethical managerial leadership. Any item with a rating

192

Chapter 11: A Self-Management Approach of “4” or higher should be considered a strength. Any item “2” or lower is likely an area for development. Use this self-assessment tool as a springboard to discuss with a trusted colleague or performance coach your self-rating.

193

This page intentionally left blank

Chapter 12

Take Aways and Calls to Action As we conclude our journey through this book, I would like to underscore some of the key “take aways” and make a call to action to three audiences. Use this book as a springboard to reflect and act on ethics in your organization. The actions a managerial leader takes can spell the difference between advancing ethical behavior in business and causing business ethics to languish or evaporate.

A Dozen Key Take Aways At the end of all my MBA classes and in-house training and development class sessions, I ask each participant to quickly summarize their most important take away from the session. For our “sessions” in this book, I will comment on one take away from each chapter. Then I encourage you to reflect on each chapter and summarize your own actionable take aways. Take Away #1: Have a Proactive Professional System. Managerial leaders need an internalized system of virtuous values, action roles, and behavioral standards to proactively respond to ethical challenges. Without this internal system, you are left to react to ethical challenges on a more personalized basis, which will inevitably provide inconsistencies and will not inspire your workforce to work ethically. The Proactive Professional System helps promote professionalism, performance, and ethical behavior. Take Away #2: Good people can do bad things. Even the most ethical people can find themselves derailed from an ethical course. At least 15 potentially lethal derailers can cause you to stray from what is good and right. The likelihood of these derailers bringing you down can be diminished with a system of virtuous values. Affirm your virtuous values through managerial leadership actions and by encouraging compliance with a set of behavioral standards. 195

Value-Centered Ethics

Take Away #3: Have some good reasons to care. When faced with ethical challenges, you need to be motivated to follow the ethical course. There are many good reasons to care about managing with ethics. These rationales range from the fact that it makes solid economic sense to it is simply the right thing to do. Take Away #4: Virtuous values are at the heart of the matter. Virtuous values, a subset of managerial leadership values, drive ethical behavior. It appears that these virtuous values have universal appeal, which calls for managerial leaders to espouse and affirm them over the long haul. Because it is very difficult for people to act counter to their internalized value system, managerial leaders who sincerely embrace virtuous values are less vulnerable to unethical temptations. Take Away #5: Interpersonal influence is integral. Using interpersonal influence skills in conjunction with your virtuous values enables you to promote the practice of ethical managerial leadership. This skill set begins with self-awareness and control, which answers the question “Who am I as a managerial leader?” Ten key actions are widely considered to constitute effective interpersonal influence. You would do well to know these and where you stand on each of the ten areas. Take Away #6: People deserve to know where things are going. Managerial leaders have a responsibility to effectively communicate a clear and meaningful direction to their people. No one wants to board a rudderless ship. To bring out the best in people, let them know what you stand for and where things are going. There are ten key actions for managerial leaders to clarify where things are headed. Take note of these areas and assess where you are in your abilities to execute each one of them effectively. Take Away #7: Focus, focus, and focus! What is important and doable needs to transcend what is unimportant and unnecessary. Managerial leaders have a responsibility to help focus their people on success. There are ten key actions ranging from profiling performance to documenting people’s impact on the bottom line that help them achieve performance focus. You can enhance your 196

Chapter 12: Take Aways and Calls to Action

achievement of ethical results by taking these actions in alignment with your set of virtuous values. Take Away #8: When “1 + 1 = 3”: the Linking Bonus. Linking skills contribute to the effective and efficient use of organizational resources, especially people. Effective linking makes the whole greater than the sum of its parts. Prerequisite to linking is the need for a clear direction, operational focus, and interpersonal influence. Strong managerial skills in direction setting, focusing, linking, and interpersonal influence create a potent package. Take Away #9: Behavioral standards help operationalize virtuous values. Behavioral standards highlight actions that need to be practiced to help ensure ethical behavior. They strengthen the Professional Proactive System to value-centered managerial leadership by providing concrete ways to “operationalize” your virtuous values. Ethical choice points often yield better decisions when behavioral standards have been put on the table. They can offer guidance and confidence when making ethical decisions. Take Away #10: Ethical behavior is shaped and maintained best by positive reinforcement. At the end of the day, how you manage consequences will determine whether ethical behavior in your organization is on the incline or decline. The primary and most powerful tool in your managerial tool kit to put ethical behavior on track will be the effective delivery of positive reinforcement. Managerial leaders who use positive reinforcement will be seen as more approachable and motivating. Their effective application of positive reinforcers, when aligned with a set of virtuous values, will help create and sustain an ethical and motivating workplace culture. Take Away #11: Ethical behavior starts with you. Most people believe they are ethical and are reluctant to state anything to the contrary publicly. Because of this, and in keeping with the theme of “Knowing thyself,” it is preferred that you take charge of your own ethics. This means that you should assess yourself against a set of ethical practices and develop a self-improvement program for your own ethical practices. Managerial leaders owe it to themselves and their people to be honest about where they stand ethically and about 197

Value-Centered Ethics

what they are going to do to close the gap between where they are and where they can be in the practice of ethical managerial leadership. Take Away #12: Don’t forget your “take aways.” This book is designed to offer you practical take aways that you can use to enhance your practice of ethical managerial leadership. I challenge you to review each chapter to identify your take aways. Keep them short and to the point, with an eye on what you can do immediately to advance your practice of ethical managerial leadership. Review your results on all the surveys/checklists and go back and complete the ones you might have missed.

Calls to Action Whether you are a managerial leader, a business school administrator or professor, or a researcher in the area of ethical managerial leadership, here is my call to each of you. Calling Managerial Leaders It is well documented that the actions or inaction of managerial leaders play an important role in determining the ethical climate of an organization. You can sit back and let the ethical events of the day catch you by surprise, or you can take a more proactive position. Without a proactive position, you will likely react to situation after situation with lower self-confidence and effectiveness. A more proactive stance will help you act with confidence and effectiveness. My call to you is to adapt the Professional Proactive System (PPS) to your situation to become a more take-charge managerial leader of ethics. Your stakeholders deserve the best that you can offer when it comes to managing ethically. Your impact extends to stakeholders, including employees, and even to your employees’ significant others. So the question becomes: What are you doing to manage ethical behavior in your organization? This book has endeavored to lead you in this quest with confidence. While adopting the entire system and practice that I have presented creates a solid framework 198

Chapter 12: Take Aways and Calls to Action

on which to build an ethical organization, you can begin by taking at least these five actions: 1. Clarify your virtuous values and list them on a 3" × 5" card; keep it close at hand. Refer to it often. 2. Ask yourself each day, “Have my actions today affirmed my virtuous values?” 3. Ask yourself once per quarter the following about your effectiveness at executing the four Corperformance managerial leader action roles: ✥

To what extent am I leading with a clear direction?

✥

To what extent am I focusing my people and operations on the things that matter?

✥

To what extent am I linking our resources effectively and efficiently?

✥

To what extent do I talk and act in ways that promote performance on a daily basis?

4. Identify and document three to six behavioral standards that will guide you and your people in making sound decisions when faced with ethical dilemmas. 5. Catch your people in the act of doing what is right on a daily basis; be specific and positive in your praise of their actions. It is my hope that managerial leaders will answer this call to action and move beyond addressing these five preliminary actions. Your actions hold the key to shaping and sustaining ethical organizational behavior. Calling Business Schools Business schools are professional institutions that should advance the practice of effective and efficient managerial leadership across disciplines and functional work areas. Finance departments, for example, should be adding value for their students by looking at ethical practices and studying the myriad of real-world examples of ethical lapses in the financial arena. Ethics can be taught in separate 199

Value-Centered Ethics

courses within a stand-alone department, or integrated into other courses across disciplines. I would submit that the latter is the preferred arrangement since ethical behavior is not bound by functional areas in business nor by discipline/academic departments within a school of business. Ethical issues and dilemmas routinely arise in all areas of organizational life. CFO’s (finance department), accountants (accounting department), marketing executives (marketing department), CIO’s (information systems department), and human resources executives (applied behavior science departments) all encounter ethical challenges within and between their boundaries. If business schools are to remain relevant voices in the discussion of ethics, they need to view ethical challenges from a functional as well as cross-functional perspective. Given the importance of ethics to the economic and humanistic bottom lines of businesses, it would appear to be elementary that business schools should be teaching ethics. There are those, however, who question the place of ethics in schools of higher learning. I believe strongly that ethics should be part of every school of business curriculum. The real questions are “What should be taught?” and “How should it be taught?” My call is for business school academic administrators and faculty to address these two questions. Let me weigh in on this issue. In light of the research showing that managers exert an enormous influence on their peoples’ propensity to act ethically, I believe that business schools need to integrate ethical decision making and behavior into their existing courses, across disciplines. This should focus on typical ethical challenges and situational temptations that professionals face in the real world. Professors of Finance should include ethical dilemmas that CFOs face, while Management Systems faculty members should address ethical challenges that confront CIOs. Schools with Departments of Law can offer their students a strong compliance perspective and show how the various functional areas of business interface with ethics and the law. Initial courses in Applied Behavior Sciences should emphasize managerial leadership practices that help create and sustain ethical behavior in organizations. I believe that the contents of this book would 200

Chapter 12: Take Aways and Calls to Action

be essential elements in this behavioral course with special emphasis on the value of having a Professional Proactive System to guide the development and maintenance of ethical organizational behavior. This initial course would lay the groundwork, for example, on how to develop behavioral standards and codes of ethics that are most aligned with the discipline and its occupational referents in the business marketplace. Business school faculty should be role models for ethical behavior. How they design, develop, and manage the classroom experience can help shape business students’ behavior in the workplace. If faculty can connect a virtuous set of values to how they facilitate classroom activities and discuss and analyze real-world ethical challenges, the business classroom becomes more fully a laboratory to explore ethical problem solving and decision making. Many of the elements found in the workplace are mirrored in the business classroom, i.e., performance expectations, evaluations, communication, and managing differences in styles. Professor Noel Tichy in his book edited with Dr. Andrew McGill, The Ethical Challenge: How to Lead with Unyielding Integrity, shows how business students can bring their ethical dilemmas from the workplace into the classroom to enhance their learning of ethics. Professor Henry Mintzberg also underscores the importance of having business school classrooms integrate students’ work experience into the learning process in his book Managers Not MBAs: A Hard Look at the Soft Practice of Managing and Management Development. As the guest editor of a series of articles on ethical behavior in management appearing in The Academy of Management Executive, distinguished Professor John Veiga at the University of Connecticut further encourages a stronger connection between the business school classroom and real-world ethical dilemmas as experienced by practitioners. At Pepperdine’s Graziadio School of Business and Management, we have been drawing on our students’ work experience to enhance classroom learning since our beginning in 1969. I encourage business school administrators and faculties to take the following five actions, at a minimum, to advance the professional practice of ethical managerial leadership: 201

Value-Centered Ethics

1. Develop value-centered mission statements for the institution that include virtuous values such as fairness, courage, and integrity. 2. Establish behavioral standards for faculty that help members of the academy “live their values.” 3. Teach ethical self-awareness. Help students assess and improve their practice of ethical behavior in organizations. 4. Connect academic disciplines and departments to the real-world ethical challenges being faced by those occupying positions relating to the functional area being taught. Accounting faculties, for example, should identify the types of ethical dilemmas that accountants face. 5. Implement program and curriculum designs that help students deal with discipline-specific issues (#4 above) while also helping them manage cross-functional ethical challenges. These actions can help business schools remain relevant in the quest to establish ethical organizations. Administrators and faculty can both espouse and affirm what it means to be ethical. Their ethical talk and walk can have positive impact on students. Calling Applied Researchers There is a clear connection between practicing ethical managerial leadership, teaching it, and conducting research in this field. This natural synergy is often overlooked. I call this the Business Connection-Teaching-Applied Research Cycle. This cycle is depicted in Figure 12-1. This cycle illustrates the connection between what goes on in the real world with practitioners, what occurs in the business classroom, and what happens in applied research settings. This call is twofold. First, the practice of managerial leadership should influence both our teaching of ethics and our research. The connection of this often-overlooked triad needs to be advanced by willing practitioners, business professors, and applied researchers who are interested in teasing out the key dimensions of ethical managerial 202

Chapter 12: Take Aways and Calls to Action Figure 12-1: The Business Connection-Teaching-Applied Research Cycle

Business Connections (Practitioners)

Intellectual Contributions (Applied Research)

Teaching (Business Schools)

Managerial Leadership Practices Researching Ethics in Applied Settings

Teaching of Ethical Practices

leadership practices. Second, research in managerial and organizational ethical practices needs to emphasize that which is applied and relevant. In order to make the applied research component useful, it must be applied and relevant to the workplace and the classroom. Practitioners can increase their effectiveness at practicing ethical managerial leadership while teachers can offer learners more credible frameworks and tools to help their students better understand and utilize ethics in their careers. In their book Industrial and Organizational Psychology: Linking Theory with Practice, professors Edwin Locke and Cary Cooper convincingly underscore the promise of having practice drive applied research agendas. They see great potential in reversing the normal pattern of theoretical research driving practice. In their 203

Value-Centered Ethics

view, practice can offer applied researchers fertile ground on which to validate and refine frameworks, tools, and practices. Researchers have work to do: “It is no wonder that practitioners almost never read the academic literature. Aside from the jargon and mind-numbing statistics, the theories developed may have very little to do with the real world, or, if they do, they may deal with such minute segments of it, that it is not worth the manager’s time to study them” (page 341). This assertion highlights the need for applied researchers in the field of managerial and organizational ethics to answer this call. Specifically, I suggest that applied researchers, at a minimum, take the following five actions: 1. Seek out business school faculty to explore learning outcomes and the best ways to teach ethical managerial leadership. 2. Seek out business practitioners who have developed applied models (like the Corperformance System included in this book) to help them validate and generalize their frameworks and tools to benefit others in their quest to effectively practice ethical managerial leadership. 3. Use the Linkage Research Model (see Chapter 3) developed by Dr. Jack Wiley, President and CEO of Gantz-Wiley, to identify effective ethical managerial leadership practices that drive employees, customers, and business results. 4. Develop practical methodologies to research the connection between financial health and ethical workplace culture. 5. Benchmark key ethical behavioral standards across industries and occupational groups. This may help us identify a core set of behavioral guide posts that are relevant and useful across industries and occupations. Applied researchers can advance the practice of effective and ethical managerial leadership if they extend themselves to practitioners and business school faculty. Working in independent silos on how

204

Chapter 12: Take Aways and Calls to Action

we can improve our practice of managerial and organizational ethics will prevent us from seeing the collective light. This triad of practitioners, business schools, and practical applied researchers holds tremendous potential for all concerned. I hope these three audiences individually and collectively heed this call. The common good surrounding the practice of ethical managerial leadership might lie in the balance.

Ending on a Positive Note The growing field of positive psychology informs us that optimists cope better than pessimists. I want to leave you with a message that will appeal to your optimistic side and help drown out the doomsday voices that we often hear in the daily media concerning ethics in business. The practice of ethical managerial leadership is teachable and doable. It rests on a set of virtuous values that appear to be universal. A key assignment for you is to adapt these values in a way that makes it easy for you to talk about them and to affirm them in your daily actions. This value-centered approach to managerial ethics will offer you strategic comfort and confidence as you go about applying the many frameworks and tools that we offered in this book. I am secure in knowing that your virtuous ways will lead you and those you touch down a road that is ethically sound. This road will no doubt have ethical challenges that you will have to negotiate. As you travel on your journey, keep this book close at hand. Its contents can help you stay the course and give you optimism. Remember that, in the end, ethical managerial leadership will be advanced by optimists who have the tools to help themselves and others cope. Stay optimistic and use these frameworks and tools to anchor a positive point of view as you strive to shape ethical behavior.

205

This page intentionally left blank

References and Resources

Alberti, R. & Emmons, M.L. 1995. Your perfect right: A guide to assertive living. (7th ed). San Luis Obispo, CA: Impact. Anderson, C. 1997. Values-based management. Academy of Management Executive, 11:4, 25–46. Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. 2002. The boundaryless organization: Breaking the chains of organizational structure. San Francisco, CA: Jossey-Bass. Asmus, P. 2003. The best corporate citizens for 2003: Companies that serve a variety of stakeholders well. Business Ethics: Corporate Social Responsibility Report. Spring Issue. Banaji, M.R., Bazerman, M.H., and Chugh, D. 2003. How (Un)ethical are you? Good managers often make unethical decisions and don’t even know it. Harvard Business Review. Volume 81, 12: 56–64. Bandura, A. 1986. Social foundations of thought & action: A social cognitive theory. Englewood Cliffs, NJ: Prentice Hall. Bazerman, M.H. 1994. Judgment in managerial decision making. (3rd ed) New York, NY: Wiley. Beu, D. & Buckley, M.R. 2001. The hypothesized relationship between accountability and ethical behavior. Journal of Business Ethics, 34:57–73. Blanchard, K. & O’Connor, M. 1997. Managing by values. San Francisco, CA: Berrett-Koehler. Blanchard, K. & Peale, N.V. 1988. The power of ethical management: Integrity pays! You don’t have to cheat to win. New York, NY: Morrow. Boatright, J.R. 2003. Ethics and the conduct of business (4th ed). Upper Saddle River, NJ: Prentice Hall. Boylan, M. 2001. Business ethics: Basic ethics in action. Upper Saddle River, NJ: Prentice Hall. Brady, N.F. 1999. A systematic approach to teaching ethics in business. Journal of Business Ethics. 19:309–318. 207

Value-Centered Ethics

Buckingham, M., & Coffman, C. 1999. First, break all the rules: What the world’s greatest managers do differently. New York, NY: Simon & Schuster. Cieply, M., & Bates, J. 2004. As spender, Ovitz was $6-million man: Documents in a lawsuit could hurt Disney Chairman Eisner before a key shareholder vote. Los Angeles Times. February 28 Al. Clawson, J.G. 2003. Level three leadership: Getting below the surface (2nd ed). Upper Saddle River, NJ: Prentice Hall. Cohen, S. G. , & Bailey, D.E. 1997. What makes teams work: Group effectiveness research from the shop floor to the executive suite. Journal of Management, 23: 239–290. Collins, J. 2001. Good to great: Why some companies make the leap and others don’t. New York, NY: Harper Collins. Conger, J. A. 1998. Winning ’em over: A new model for management in the age of persuasion. New York, NY: Simon & Schuster. Cooper, C.L., & Locke, E.A. 2000. Industrial and organizational psychology: Linking theory with practice. Oxford, United Kingdom: Blackwell Publishers. Covey, S.R. 1989. The 7 habits of highly effective people: Restoring the character ethic. New York, NY: Simon & Schuster. Covey, S.R. 1991. Principle-centered leadership. New York, NY: Summit Books. Cressy, D., & Moore, C. 1983. Managerial values and corporate codes of ethics. California Management Review, 25:53–77. Cropanzano, R. (Ed.) 2000. Justice in the workplace: From theory to practice (Vol. 2). Mahwah, NJ: Lawrence Erlbaum and Associates. Csikszentmihalyi, M. 2003. Good Business: Leadership flow and the making of meaning. New York, NY: Viking. Daniels, A.C. 2000. Bringing out the best in people: How to apply the astonishing power of positive reinforcement. New York, NY: McGraw-Hill. Daniels, A.C. 2001. Other people’s habits: How to use positive reinforcement to bring out the best in people around you. New York, NY: McGraw-Hill. 208

References and Resources

Darley, J.M., Messick, D.M., & Tyler, T.R. 2001. Social influences on ethical behavior in organizations. Mahwah, NJ: Lawrence Erlbaum Associates Publishers. Dean, P. 1992. Making codes of ethics real. Journal of Business Ethics, 11: 285–290. DePree, M. 1992. Leadership jazz. New York, NY: Doubleday. Dorsey, David. 1994. The Force. New York, NY: Random House. Doz, Y.L., & Hamel, G. 1998. Alliance advantage: The art of creating value through partnering. Boston, MA: Harvard Business School Press. Drucker, P.F. 1999. Management challenges for the 21st century. New York, NY: Harper Business. Dyer, W.G. 1995. Team building: Issues and alternatives (3rd ed). Reading, MA: Addison-Wesley. Elias, R.Z. 2004. The impact of corporate ethical values on perceptions of earnings management. Managerial Auditing Journal, 19:84–98. England, G.W., & Lee, R. 1974. The relationship between managerial values and managerial success in the U.S., Japan, India and Australia. Journal of Applied Psychology, 59 (4), 411–419. Ethics Education in Business Schools. 2004. Ethics Education Task Force Report of AACSB International, February 3, 2004. (visit www.aacsb.edu/eerc for a copy of the report). Farrell, B.J., & Cobbin D.M. 2000. A content analysis of codes of ethics from fifty-seven national accounting organizations. Business Ethics: A European Review, 9:180–190. Farrell, B.J., Cobbin, D.M. & Farrell H.M. 2002. Codes of ethics: Their evolution, development and other controversies. Journal of Management Development, 31:152–163. Festinger, L. 1957. A theory of cognitive dissonance. Evanston, IL: Row, Peterson. Fitz-Enz, J. 2000. The ROI of human capital: Measuring the economic value of employee performance. New York, NY: AMACOM. Freiberg, K. 1998. Leaders as value shapers. Executive Excellence. Vol. 15, 11:7–8. Golin, A. 2004. Trust or consequences: Build trust today or lose your market tomorrow. New York, NY: AMACOM. 209

Value-Centered Ethics

Greenberg, J. 2002. Ethics programs help curb employee theft. USA Today (Magazine), December, p. 10. Greenhalgh, L. 2001. Managing strategic relationships: The key to business success. New York, NY: Free Press. Harned, P.J., Matuszewski, I., Brown, J., Navran, F.J., Altizer, L., Sutliff, K., & Larson, L. 2003. Creating a workable company code of ethics. Washington, DC: Ethics Resource Center. Harrington, H.J., Conner D.R., & Horney, N.F. 2000. Project change management: Applying change management to improvement projects. New York, NY: McGraw-Hill. Hatcher, T. 2002. Ethics and HRD: A new approach to leading responsible organizations. Cambridge, MA: Perseus Publishing. Hatcher, T. 2003. New world ethics. T + D, 57:8, 42–47. HR Focus. 2002. Ethical corporate behavior begins with a code of conduct. July 79:8–9 Izraeli, D., & Schwartz, M.S. 1998. What can we learn from the U.S. federal sentencing guidelines for organizational ethics? Journal of Business Ethics, 17:1045–1055. Jennings, M.M. 2003. A business tale: A story of ethics, choices, success (and a very large rabbit). New York, NY: AMACOM. Johannesen, R.L. 2002. Ethics in human communication (5th ed). Prospect Heights, Illinois: Waveland Press. Johnson, C.E. 2001. Meeting the ethical challenges of leadership: Casting light or shadow. Thousand Oaks, CA: Sage. Johnson, L., & Phillips, B. 2003. Absolute honesty: Building a corporate culture that values straight talk and rewards integrity. New York, NY: AMACOM. Joyner, B.E., & Payne, D. 2002. Evolution and implementation: A study of values, business ethics and corporate social responsibility. Journal of Business Ethics, 41: 297–311. Kaplan, R.S., & Norton D.P. 2001. The strategy focused organization: How balanced scorecard companies thrive in the new business environment. Boston, MA: Harvard Business School Press. Kaplan, R.S., & Norton, D.P. 1996. The balanced scorecard. Boston, MA: Harvard Business School Press. 210

References and Resources

Kerns, C.D. 1975. Effects of schedule and amount of observed reinforcement on response persistence. Journal of Personality and Social Psychology, 31, 983–991. Kerns, C.D. 2000. Serving each other on the inside. Graziadio Business Report – Journal of Contemporary Business Practice. Spring Issue. (http://gbr.pepperdine.edu/002/inside.html) Kerns, C.D. 2000. Strengthen your business partnership: A framework and application. Business Horizons, 43: 17–22. Kerns, C.D. 2001. The power of performance profiling: Eight good reasons to concentrate on results. Graziadio Business Report – Journal of Contemporary Business Practice. Winter Issue. (http://gbr.pepperldine.edu/011/performance.html). Kerns, C.D. 2002. An entrepreneurial approach to strategic direction setting. Business Horizons, 45: 2–6. Kerns, C.D. 2002. GBR conversation with Joe Rokus. Graziadio Business Report – Journal of Contemporary Business Practice. Winter Issue. (http://gbr.pepperdine.edu/021/ conversation.html). Kerns, C.D. 2002. Managerial leadership at Twelve O’ Clock: Link management practice to business results. Graziadio Business Report - Journal of Contemporary Business Practice. Summer Issue. (http://gbr.pepperdine.edu/023/leader.html) Kerns, C.D. 2002. Putting spirituality to work: Leaders can make hard decisions a matter of faith!. Graziadio Business Report – Journal of Contemporary Business Practice. Winter Issue. (http://gbr.pepperdine.edu/021/faith.html). Kerns, C.D. 2003. Creating and sustaining an ethical workplace culture. Graziadio Business Report – Journal of Contemporary Business Practice. 6: 3. (http://gbr.pepperdine.edu/033/ethics.html.) Kerns, C.D. 2003. Why good leaders do bad things: Mental gymnastics behind unethical behavior. Graziadio Business Report – Journal of Contemporary Business Practice. 6: 4 (http://gbr.pepperdine.edu/034/leaders.html). Kerns, C.D. 2004. Strengthening values centered leadership: What, why and how. Graziadio Business Report – Journal of Contemporary Business Practice. 7:2 (http://gbr.pepperine. edu/0402/leadership.html). 211

Value-Centered Ethics

Key, S., & Popkin, S.J. 1998. Integrating ethics into the strategic management process: Doing well by doing good. Management Decision, 36: 331–338. Komaki, J.L., Collins, R.L., & Penn, P. 1982. The Role of Performance Antecedents and Consequences in Work Motivation. Journal of Applied Psychology, Vol. 67, 3:334–41. Kouzes, J.M., & Posner, B.Z. 2002. The leadership challenge (3rd ed). San Francisco, CA: Jossey-Bass. Kouzes, J.M., & Posner, B.Z. 2003. Credibility: How leaders gain and lose it, why people demand it. San Francisco, CA: JosseyBass. Labovitz, G. , & Rasansky, V. 1997. The power of alignment: How great companies stay centered and accomplish extraordinary things. New York, NY: Wiley. Lewin, K. 1951. Field theory in social science. New York, NY: Harper & Row. Locke, E., & Cooper, Cary. 2000. Industrial and organizational psychology: Linking theory with practice. Malden, MA: Blackwell Publishing. Locke, E.A., & Latham, G.P. 1984. Goal setting: A motivational technique that works. Englewood Cliffs, NY: Prentice Hall. Magasin, M., & Gehlen F.L. 1999. Case study: Unwise decisions and unanticipated consequences. Sloan Management Review. Fall Issue: 47–60. Margerison, C., & McCann, D. 1990. Team management: Practical new approaches. London, England: Mercury Books. Marquardt, M. 2004. Harnessing the Power of Action Learning. T + D, 58:6, 26–33. Martin, G. , & Pear, J. 2003. Behavior modification: What it is and how to do it. Upper Saddle River, NJ: Prentice-Hall. McCall, M.W., Jr. 1998. High flyers: Developing the next generation of leaders. Boston, MA: Harvard Business School Press. McCann, Dick. 1998. How to Influence Others at Work. St. Louis, MO: Elsevier McDonald, G. 2000. Business ethics: Practical proposals for organizations. Journal of Business Ethics, 25: 169–184. 212

References and Resources

Messick, D.M., & Bazerman, M.H. 1996. Ethical leadership and the psychology of decision making. Sloan Management Review, 37:2, 9–22. Mintzberg, H. 2004. Managers not mba’s: A hard look at the soft practice of managing and management development. San Francisco, CA: Berrett-Koehler Publishers. Molander, E.A. 1987. A paradigm for design, promulgation and enforcement of ethical codes. Journal of Business Ethics, 6:619–631. Moore, M.G. , & Dittenhofer, M.A. 1992. How to develop a code of conduct. Altamonte Springs, FL: The Institute of Auditors Research Foundation. Mulvey, P.W., & Klein, H.J. 1998. The impact of perceived loafing and collective efficacy on group goal processes and group performance. Organizational Behavior and Human Decision Processes, April: 62–87. Nelson, B. 1994. 1001 ways to reward employees. New York, NY: Workman Publishing. Nelson, B. 2004. Recognition practices inventory (RPI). Amherst, MA: HRD Press, Inc. Nelson, B. 2004. Recognition practices inventory for managers (RPIM). Amherst, MA. HRD Press, Inc. Oliverio, M. 1989. The implementation of a code of ethics: The early efforts of one entrepreneur. Journal of Business Ethics, 8:367–374. Ostroff, F. 1999. The horizontal organization: What the organization of the future actually looks like and how it delivers value to customers. New York, NY: Oxford University Press. Parker, G. M. 2003. Cross-functional teams: Working with allies, enemies & other strangers. San Francisco, CA: Jossey-Bass. Patrick, J.A., & Scherer, R.F. 2003. The Enron scandal and the neglect of management integrity, capacity. Mid American Journal of Business, 18:37–50. Pearce, J.L. 2003. Former Enron Vice President Sherron Watkins on the Enron collapse. Academy of Management Executive, 17: 119–125. Peterson, D. 2004. Perceived leader integrity and ethical intentions of subordinates. The Leadership & Organization Development Journal, 25:7–23. 213

Value-Centered Ethics

Petrick, J.A., & Quinn, J.F. 2001. The challenge of leadership accountability for integrity capacity as a strategic asset. Journal of Business Ethics, 34:331–344. Rampersad, H.K. 2003. Total performance scorecard: Redefining management to achieve performance with integrity. New York, NY: Butterworth-Heinemann. Rasberry, R.W. 2000. The conscience of an organization: The ethics office. Strategy & Leadership, 28: 17–21. Rath, T., & Clifton, D.O. 2004. How full is your bucket? Positive strategies for work and life. New York, NY: Gallup Press. Richardson, J.E. (Ed.) 2003–2004. Annual Editions: Business Ethics (15th ed). Guilford, Connecticut: McGraw-Hill/Dushkin. Robbins, S.P., & Hunsaker, P.L. 2003. Training in interpersonal skills: TIPS for managing people at work (3rd ed). Upper Saddle River, NJ: Prentice Hall. Robbins, S.P. 2005. Essentials of Organizational Behavior (8th ed). Upper Saddle River, NJ: Prentice Hall. Russell, R.F. 2001. The role of values in servant leadership. Leadership & Organization Development Journal, 22:2, 76–83. Schumann, P.L. 2001. A moral principles framework for human resource management ethics. Human Resource Management Review. 11:93–111. Schwartz, M.S. 2002. A code of ethics for corporate code of ethics. Journal of Business Ethics, 41:27–43. Seglin, J.L. 2002. Ethics: Good for goodness sake. CFO, Vol. 18, 10:75–77. Seligman, M. 2002. Authentic happiness: Using the new positive psychology to realize your potential for lasting fulfillment. New York, NY: Free Press. Spekman, R.E., Isabella, L.A., & MacAvoy, T.C. 2000. Alliance competence: Maximizing the value of your partnerships. New York, NY: John Wiley & Sons. Sternberg, E. 2000. Business ethics in action. (2nd ed). New York, NY: Oxford University Press. Team Management Index (TMI) – see www.teammanagementsystems. com 214

References and Resources

Thiroux, J.P. 2001. Ethics: Theory and practice (7th ed). Upper Saddle River, NJ: Prentice Hall. Thomas, K.W., & Kilman, R.H. 1974. Thomas-Kilman Conflict Mode Instrument. Palo Alto, CA: Consulting Psychologists Press Inc. Thompson, L. 2002. The mind and heart of the negotiator. (2nd ed.) Upper Saddle River, NJ: Prentice Hall. Thompson, W.D. 2002. Restoring integrity to business. Vital Speeches of the Day, October 15, 69:1. Tichy, N.M., & McGill, A.R. (Eds.). 2003. The ethical challenge: How to lead with unyielding integrity. San Francisco, CA: JosseyBass. Trevino, L.K., Hartman, L.P., & Brown, M. 2000. Moral person and moral manager: How executives develop a reputation for ethical leadership. California Management Review, 42:128–142. Tuckman, B.W. 1965. Developmental sequence in small groups. Psychological Bulletin, 63: 384–399. Ulrich, D., & Smallwood, N. 2003. Why the bottom line isn’t! How to build value through people and organization. Hoboken, NJ: Wiley. Valasquez, M.G. 2002. Business Ethics: Concepts and cases. (5th ed). Upper Saddle River, NJ: Prentice Hall. Veiga, J.F. (Ed.) 2004. Special topic: Ethical behavior in management. Academy of Management Executive, 18:2, 37–90. Von de Embse, T.J., Desai, M.S., & Desai, S. 2004. How well are corporate ethics codes and policies applied in the trenches? Key factors and conditions. Information Management & Computer Security, 12:146–153. Walton, C. 2001. Character and integrity in organizations: The civilization of the workplace. Business & Professional Ethics Journal. 20:105–128. Watkins, S.S. 2003. Ethical conflicts at Enron: Moral responsibility in corporate capitalism. California Management Review. 45:4, 6–19. Watson, D.L., & Tharp, R.G. 2002. Self-directed behavior: Self-modification for personal adjustment. Belmont, CA: Wadsworth/ Thomas Learning, Inc. Weaver, G. 1993. Corporate codes of ethics: Purpose, process and content issues. Business and Society, 32:44–58. 215

Value-Centered Ethics

Weill, P., & Broadbent, M. 1998. Leveraging the new infrastructure: How market leaders capitalize on information technology. Boston, MA: Harvard Business School Press. Wells, W., & Spinks, N. 1996. Ethics must be communicated from the top down! Career Development International, 1:28–30. Whetten, D.A., & Cameron, K.S. 2002. Developing management skills (5th ed). Upper Saddle River, NJ: Prentice Hall. Wiley, J.W. 1996. Linking survey results to customer satisfaction and business performance. In A. Kraut (ed) Organizational Surveys. San Francisco, CA: Jossey-Bass. Wiley, J.W. 2002. Driving organizational outcomes with strategic employee surveys: Best Practices from internal and external practitioners. Pre-Conference Workshop. Presented at the 17th Annual Conference of the Society for Industrial and Organizational Psychology, Toronto, Canada, April 2002. Wilson, I. 2002. The new rules: Ethics, social responsibility and strategy. Strategy & Leadership, 28:12–16. Wisner, P. 2002. Learning how best to behave. http://www.econoist. com/globalExecutive/Education/displayStory.cfm?story_id=13 12966. September 3, 2002. Wood, G. 2000. A cross-cultural comparison of the contents of codes of ethics: USA, Canada and Australia. Journal of Business Ethics, 25: 287–298. Wotruba, T.R., Chonko, L.B., & Low, T.W. 2001. The impact of ethics code familiarity on manager behavior. Journal of Business Ethics, 33: 59–69. Yates, B.T. 1986. Applications in self-management. Belmont, CA: Wadsworth Publishing Company.

216

Index benefits of, 148 seven steps, 150–158 type 1: inspirationalidealistic, 51 type 2: regulatory, 51 type 3: educationallearning oriented, 51 Blanchard, K., 42–43, 45 Business connection-teachingapplied research cycle, 203

A-B-C Model adding a system to, 2, 7 analysis worksheet, 181 albert’s analysis worksheet, 185 basic model, vii, 2, 161–163, 175 of ethical behavior, 3 Action roles for managerial leaders, 4 Alberti, R., & Emmons, M.L., 20 Alignment, 50, 55, 81, 99,128 Approachability index, 18 Arthur Andersen, xiii, 31 Ashkenas, R., 91 Authentic Happiness, 44

Calls to action applied researchers, 202 business schools, 199 managerial leaders, 198 Cameron, K., 56 C-H-A-I-R, 141 Checklists behavioral standards, 159–160 feedback, 61 situational conflict management, 71 Clifton, D., 165 Clark, R., 23 Clawson, J.G., 45 Cognitive dissonance, 15, 42 Collins, J., 12, 106 Conger, J., xi, 66 Consequences delivering, 167 extinguishing, 166 four types, 164

Balanced scorecard, 32 Basic communication model, 59, 62 Basic motivation model, 67 Behavioral integrity quotient (BIQ), 15 Behavioral standards, vi, x, xiv, xv, 4, 6–8, 10, 41, 49, 51, 62, 77, 93–95, 147–160, 161–163, 175, 176, 179, 184, 190–191, 195, 197, 199, 201, 202, 204

217

Value-Centered Ethics

negative reinforcement, 165 positive reinforcement, 164–165, 168–172 punishment, 165 (See also Positive Reinforcement) Cooper, C., 203 Corperformance director role, 78, 81, 98, 177, 191 focuser role, 99–126, 177, 191 influencer role, 55–79, 177 linker role, 127–145, 177–178, 191 performance diamond, 50 self-awareness→monitoring →action→efficacy→ model, 57 system, 49, 78, 93, 127, 204 system index, 94 Covey, S., 45 Credibility, 11, 16, 65, 130 Csikszentmihalyi, M., 30

misaligned incentives, 17–18 no professional system, 9–10 over-confidence, 22–23 poor accountability, 16–17 poor persuasion skills, 11–12 satisficing, 20–21 semantic softness, 22 the need to be liked, 19–20 unclear, unstated, or nonexistent values, 10–11 unrealistic optimism, 12–13 Developmental stages of groups, 71–74 Dorsey, D., 17 Drucker, P., 56 DWYSYWD, 130 Eisner, M., ix–x Enron, vii–viii, 16, 31, 32, 36 Ethical self-management practices, 189, 192 Evaluating performance, 50, 108, 111 External linking opportunities, 135

Daniels, A., xi, 163, 169 DePree, M., 45 Derailers cognitive dissonance, 15 hypercompetitiveness, 20 low approachability index, 18–19 low behavioral integrity quotient (BIQ), 15–16 low maturity index, 13–14

Feedback effectiveness, 61 Festinger, L., 15 Filter analysis, 59, 62 Four to one (4 to 1) Rule, 171 Freiberg, K., 34 218

Index

Global Crossing, xiii Graziadio School of Business and Management, 49, 201

Outside-in approach, 37, 51, 148 Overall mission statement, 84 Overall mission statement example of, 85 Ovitz, M., ix

High-impact communicating, 50, 58–59, 79, 143 Hunsaker, P., 56, 130 Hypercompetitiveness, 20, 29 Inside-out approach,

Peale, N.V., 45 Pear, J., 168 Performance management, 16–17, 93–94, 99, 101, 113, 128, 177 Performance profile, 62, 67, 101–103, 107–108, 112, 117–126, 128 Performance-based appraisal system, 108–111 Personal reaction (PR), 4 PIC, 163 Positive psychology, 205 Positive reinforcement, 68, 162, 164–174, 178, 184–188, 197 5-Steps to Managing Positive Reinforcement, 168–172. (See also Consequences) Posner, B., 45, 64, 130 Potential linking targets, 136 Proactive professional system (PPS), 4–7, 9–10, 93, 151, 163, 176, 198

37, 49

Kaplan, R., 32 Kelleher, H., 35 Kerns, C.D., 46, 50, 57, 96 Key ethical managerial leadership practices, 175 Kouzes, J., xi, 45, 64, 130 Labovitz, G. , 92 Latham, G. , 102, 106 Linkage research model, xi, 27, 204 Locke, E., 102, 106, 203 Managerial leadership at 12 o’clock, 27–29 Margerison, C., 62 Martin, G., 168 Maturity index, 13–14 McCann, D., 62, 63 McGill, A.R., 201 Menu of positive reinforcement, 168 Mintzberg, H., 201

Rath, T., 165 Recognition practices inventory (RPI), 169, 188 Recognition practices

Nelson, B., xi, 169, 188 Norton, D., 32 219

Value-Centered Ethics

inventory for managers (RPIM), 188 Robbins, S., xi, 21, 56, 130 Rosansky, V., 92

Soda machine effect, 166–167 Stockdale paradox, 12–13 Take aways, a dozen key, 195–205 Ten key actions director role, 82–96 focuser role, 101–113 influencer role, 56–78 linker role, 129–143 Tharp, R., xi, 179 Thompson, W., 29 Tichy, N.M., xi, 201 Tyco, 31, 32

Sarbanes-Oxley Act, 37–38, 149 Say-do ratio, 16 Self-awareness model, 57 Self-assessment survey derailment, 24–25 director role, 97–98 focuser role, 115–116 influencer role, 79 linker role, 144–145 managing consequences, 173–174 managerial leadership practices, 190–191 motivation, 39–40 self-management practices, 192–193 virtuous values, 52–53 Self-improvement cycle, 183–184 Self-management approach, 175–193 Seligman, M., xi, 44–46 Seligman’s universal virtues, 46 Situational conflict management checklist, 71 Smallwood, N., 29 Smith, F., 35 Social loafing, 17 Social responsibility, xiv, 32–33

U.S. Federal Sentencing Guidelines, 37–38 Ulrich, D., 29 Unrealistic optimism, 12–13 Values attitude-behavior chain, 42 results interaction matrix, 114 Veiga, J., 201 Virtuous values courage and integrity, 46, 47–48, 52, 56, 75, 82, 89, 90, 100, 111, 129, 177, 202 justice and fair guidance, 46, 47, 52, 75, 82, 89, 90, 110, 111, 176 love and kindness, 46, 47, 52, 60, 75, 82, 89, 90, 100, 112, 177 self-control, 46, 52, 55, 220

Index

56, 57, 58, 75, 82, 89, 90, 98, 100, 102, 107, 128, 176, 179, 189 transcendence, 45, 46, 47, 52, 55, 57, 75, 82, 89, 90, 154, 176 universal, 4, 44–46 virtuous values alignment, 55–56, 81–82, 99, 128

wisdom and knowledge, 45, 46, 52, 75, 81–82, 89, 90, 98, 106, 139, 176 Watson, D., 179 Whetten, D., 56 Wiley, J., xi, 27, 204 Wisner, Professor, 29 WorldCom, vii–viii, 31, 32, 36

221

This page intentionally left blank

About the Author Charles D. Kerns, Ph.D., MBA Dr. Kerns brings more than 30 years of business, managerial leadership, and consulting experience to his position as Associate Dean of Academic Affairs for the Graziadio School of Business and Management at Pepperdine University, and Associate Professor of Applied Behavioral Science. For ten years, Dr. Kerns was involved in the healthcare field as a psychologist, managerial leader, and senior executive. Subsequently, as a management consultant/performance coach for more than 15 years, Dr. Kerns has consulted with and implemented performance improvement programs for companies, ranging from small privately held businesses to large multi-national organizations in numerous industries. He has taught in nearly every program in the Graziadio School as an adjunct faculty member from 1981 to 2000 and as a full-time faculty member from August 2000. Dr. Kerns is an active author, performance coach, and expert in the fields of value-centered leadership development and performancebased management systems. He has applied his vast experience to create his proprietary Corperformance System—values, attitudes, and action roles for maximizing performance. A licensed psychologist, he has earned a Diplomate in Organizational and Business Consulting Psychology as well as a Diplomate in Industrial and Organizational Psychology from the American Board of Professional Psychology. He seeks to facilitate individuals, groups, and organizations to maximize their performance while helping them achieve the highest standards of ethical practice. He lives in Pasadena, California, with his wife and two children.

223