Category Archives: Ethical Leadership

It’s Not Altruism. Just Good Leadership

Reprinted with permission from my 5/26/18 column in Business Ethics Magazine  

Leaders who believe they have a responsibility to create conditions so that employees can flourish aren’t altruists. They’re just good leaders equally committed to maximizing financial success. They know the two are connected. They also know engagement occurs when employees feel accepted and valued for their contributions. These leaders understand the role respect plays in flourishing so they pay attention to, and address, issues like bigotry, sexual harassment and exclusion before talented people leave or the culture becomes toxic.

When big or small companies miss the mark on paying attention to respect and are in the headlines or become a cautionary tale (because we know someone who works there) it raises the obvious question of how could the CEO, senior leaders or Human Resources not see or act in time?

What we know about conduct is that when leaders model and insist that certain behaviors are a foundational priority and condition of working at a company, a culture shows different results than leaders just expecting we all understand how we should behave. The discrepancy illustrates the chasm between aspirational values and values that are actual cultural building blocks that define how an organization treats customers and each other. The defining question: how important is it to leaders that employees feel safe and have a sense of belonging?

If the “yes” is without enough anchors supporting it, the companies navigating current problems remind us that good intentions may win some diversity awards (as the three companies below have won) but won’t create sustainable change.

What follows are recent examples of what isn’t working and some suggestions of what companies can do to create conditions so that employees have the opportunity to flourish.

Visa, Nike and Microsoft

Leaders at Visa and Nike apparently failed to know female employees complained of misconduct, discrimination and a “bro culture” but now have culture change on their radar. After many female senior leader departures, Visa CEO Alfred F. Kelly, Jr.  met in May with women executives about advancement issues and inappropriate behavior they’ve experienced. Visa has also just created a Women’s Advisory Group. At Nike women, who’d said they’d been marginalized and sexually harassed with no action taken, initiated a survey. The survey results were left on Chairman, President and CEO Mark Parker’s  desk. Subsequent investigation into behaviors resulted in 11 senior executives resigning or losing their jobs.

Microsoft is among technology companies dealing with complaints of a “bro culture” and gender discrimination. An April 2018 Seattle Times article (“’I felt so alone’: what women at Microsoft face and why many leave”) captures the isolation, discouragement, bias and lack of support (from human resources as well as leaders) reported by media about women in other companies.

Creating conditions so employees can flourish

2018 isn’t our first rodeo for diversity and inclusion. The business case for diversity has been made, reiterated with new data for gender diversity and there are even CEO testimonials on business impact.  The human case for diversity has been evident for decades. However, it seems in change and uncertainty — where innovation, collaboration and conversations about new ways of seeing and doing are badly needed — there is an even greater dependence for some to surround themselves with “people like us” and act out unacceptable behavior to gain dominance and control over others. When unchecked by leaders, any sense of belonging by those harmed – and those watching who know it could also happen to them — is destroyed.

Companies of all sizes have been addressing in some way issues of bigotry, sexual harassment and exclusion because they know it’s illegal and toxic to a work environment. The bigger question is how good is their information about what is actually going on? And, are actions being taken designed to support employees in flourishing? Some suggestions for consideration:

Augmenting what CEOs know

First-hand information is the most useful.

  • Most CEOs need to get out of their offices more often to evaluate if their sense of reality is corroborated by what they hear and see. For example, what might Nike and Visa CEOs have known far sooner if they’d practiced managing by walking around (MBWA) and had a series of random skip level meetings to listen and learn?
  • As town meetings can inhibit some from asking questions, CEOs might encourage questions through an internal blog.  They may find their time well spent scanning comments and arrange with the internal communications team the best way to handle CEO responses.
  • Once a quarter, CEOs could initiate an open door policy for a few days, and encourage direct reports to do the same, to encourage two-way exchanges.
  • CEOs need to send Human Resources and their direct reports a clear message that they want unfiltered, accurate information about how complaints and problems are being handled – particularly those that address whether employees feel safe, have experienced intimidation, harassment or exclusion and how issues of fairness and respect are being addressed. Presumably someone from the CEO’s office is on the company’s diversity committee to give feedback on how issues are being addressed there.

Using information to strengthen culture

Speaking at a global business ethics symposium on diversity and inclusion this month, State Street Corporation’s  Chief Diversity Officer Paul Francisco indicated that a lot of implicit bias happens in workplaces when people are under stress. He advised slowing down to ask oneself if a decision is being made with the right context and facts or just because it feels easier.

How feedback is given, support provided and values linked with behaviors influences a workplace environment.

  • Research indicates some managers are uncomfortable giving feedback. In addition to getting tips from Human Resources, here are additional suggestions.  It’s important that employees receive constructive support and encouragement so they know what they are doing well and have specific suggestions for improvement. For employees violating policies, consequences need to be clear and consistent.
  • Managers should ask employees what support they need. Getting employees’ ideas in each team can help managers understand how to support team members and encourage them to support each other. This fuels a spirit of community and identifies values most important in that team.
  • Values need to be cultural building blocks with behaviors identified. Nike is an example of a company whose mission and 11 guiding principles are heavily brand driven.  The principle, “Do the right thing,” needs elaboration especially in light of Nike’s current crisis. Elaborating on what is meant by that principle could serve as an opportunity for teams to discuss how that should show up in how they treat each other.

BlackRock’s  Managing Director and Global Head of Diversity and Inclusion Jonathan McBride  has said his goal is for the company’s 14,000 employees to have a sense of belonging. He is actively discouraging employees from surrounding themselves with people “just like them” because “it creates risk, hampers resiliency and lowers performance.” McBride is using survey questions to get more data on employees’ sense of belonging to the company, team and global function.

Information provides insight and ideas for leaders to build understanding, strengthen culture, learn from mistakes and work together with employees to create a sense of belonging and safety so employees are motivated to do their best work.

It isn’t altruism, just good leadership.

Gael O’Brien, a Business Ethics Magazine columnist, is an executive coach and presenter focused on building leadership, trust, and reputation. She publishes The Week in Ethics, is a Kallman Executive Fellow, Hoffman Center for Business Ethics, Bentley University and Senior Fellow for Social Innovation at the Lewis Institute, Babson College.

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The Week in Ethics: Wells Fargo’s Next Move? 10 Suggestions

Update: See my 12/10/16 Business Ethics column on Where Wells Fargo Goes From Here .

Update: In October 2016 Timothy Sloan replaced Chairman/CEO John Stumpf, becoming CEO and President. The chairman role was split and given to independent lead director Stephen Sanger.

Update: September 27, 2016: Wells Fargo Independent directors issued a statement  they will lead an investigation into “the bank’s retail sales practices and related matters” with the Board’s HR Committee and independent counsel. Chairman/CEO John Stumpf to forfeit $41 million unvested equity awards and “will forgo salary during the investigation.” The U.S. House Financial Services Committee will hold a hearing on bank’s “unauthorized customer accounts” on 12/29/16.

How will Wells Fargo resolve the ethical and culture issues it faces? And, how will it move beyond a poor showing at the Senate Banking Committee hearing and start to rebuild trust? First some background. Then 10 suggestions.

The best thing a CEO with strong convictions about the “rightness” of his/her own position can do when embroiled in a crisis is to spend time with trusted sources (inside or outside their company) who see things very differently. Being open to these viewpoints and questions iphone-pictures2-222and multiple perspectives raised make it harder for  CEOs to stay wedded to their position. However, once a CEO is under fire the temptation to stick with like-minded people can increase. What’s lost then is stimulation to think deeply about different aspects of an issue to gain new insights and awareness that enable developing alternatives legitimately aligned with values. Being stuck in “rightness” can lead to error blindness, a term popularized by Kathryn Schulz  who points out, “Trusting too much in feeling you are on the right side of anything is dangerous.”

It can lead to decisions that put a CEO on the defensive in front of a U.S. Senate hearing, as John Stumpf Chairman and CEO of Wells Fargo experienced September 20, 2016 testifying before the U.S. Senate Committee on Banking, Housing & Urban Affairs.

Stumpf was questioned about the bank’s unauthorized accounts and allegations of a pressure-cooker sales culture which became public in 2013 (Los Angeles Times story) and continued. Wells Fargo has fired 5,300 employees, paid a fine, faces an investigation into its sales practices by New York and California federal prosecutors and can anticipate an upcoming hearing by the U.S. House Financial Services Committee in addition to follow up from the Senate Banking Committee. Earlier this month The U.S. Consumer Financial Protection Bureau filed a consent order outlining findings of the bank’s “improper sales practices”from 2011 to 2016.

A few days before the Senate hearing Stumpf, in an interview, disputed Wells Fargo has a culture problem. He maintained that stance with Senate committee members, while indicating changes the Bank planned to make. However, the bipartisan committee was united in criticism that Stumpf, the Board and senior leadership hadn’t gone far enough, fast enough and weren’t showing accountability. From the Republican Committee chair to Democratic challengers, Senators didn’t buy that the bank’s culture isn’t an issue.

Where does this leave Wells Fargo? Anyone who has been through corporate crises — as I and many others have — knows that criticism from outsiders is hard to take. However, there are huge pitfalls if Mr. Stumpf stays locked in the “rightness”of his position (in spite of his 30 plus years service at Wells Fargo, presiding over several of its acquisitions and knowing his industry and company better than outsiders).

His performance at the Senate hearing this week indicates his time has been spent with legal and public relations teams and like-minded insiders. Getting out of a crisis, turning around a culture and re-earning political and public trust, doesn’t happen by working harder with the same mindset. (The much touted definition of insanity is doing the same thing over and over and expecting different results.)

I’ve limited myself to 10 suggestions for Wells Fargo to support the start of a turnaround:

  1. The board should appoint a new chairman — an independent director — separating the role from the CEO for many reasons including signaling stronger board governance.
  2. The board should immediately decide about claw backs related to compensation of former head of community banking Carrie Tolstedt, Stumpf and any others. As part of re-earning trust, all their actions should be transparent and well communicated.
  3. The board should direct Stumpf and his team to meet with Wells Fargo’s ethics and compliance teams and risk officers to discuss/evaluate ethics, compliance and risk operations for strengths, weaknesses and safeguards to better integrate sales and all business strategies with corporate values and prepare a report for the board.
  4. The compliance and ethics leaders (and C-suite leader to whom they ultimately report) should initiate meetings with leaders of the Ethics & Compliance Initiative and the Society of Corporate Compliance and Ethics to address best practices, implementation challenges and examples where ethics and compliance leaders weigh in on business strategy discussions in sales and all areas.
  5. The board and senior management should identify outside experts to discuss how to  realign authentically culture around values. A place to start is the nearby Markkula Center for Applied Ethics.
  6. Stumpf and his management team should become acquainted with Margaret Wheatley’s concept of self seal (the rightness of one’s position), Kathryn Schulz’ TED Talk (error blindness) and Margaret Heffernan’s  Willful Blindness for starters. These are lenses that encourage conscious and unconscious unethical behavior.
  7.  A cross-functional team of senior leaders with ethics and compliance leaders should review the company’s five primary values; for each, identify five or six specific expected behaviors to be incorporated into company policy and discussed in ethics training and performance reviews. Currently, the values are too abstract.
  8. Under the value “Ethics” the company says “We strive to be recognized by our stakeholders as setting the standard among the world’s great companies for integrity and principled performance. “This should become a business objective with Board and CEO focus to keep this commitment at the center of the turnaround’s activities.
  9. At the upcoming House Financial Services Committee hearing, Stumpf and those testifying can start rebuilding trust by being fully prepared to answer questions directly and completely, having with them information relevant to committee questions. Stumpf should also make himself available to Senate Banking Committee leadership to make sure information provided since that hearing addressed open questions.
  10. Trust is a relationship where “integrity” and “principled performance” are realities, not marketing slogans. In relationships with employees, customers, customers affected by unethical actions, employees pressured by aggressive sales tactics, Wells Fargo leaders have to admit what went wrong and make systemic changes. A start is to amend the vision statement that says “We want to satisfy our customers’ financial needs and help them succeed financially” and add “in ways that build lasting relationships of trust and integrity.”

The Week in Ethics

Gael O’Brien, September 22, 2016

Gael O’Brien is The Ethics Coach columnist  for Entrepreneur Magazine. She is also a columnist for Business Ethics Magazine where her September column is “One man’s Leadership Toward a Goal: ‘The Great Mission of Business Ethics.'”

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The Week in Ethics: Women Leaders Galvanize Detroit Around Justice

photo gold key in puzzle doorWhen things fall apart for lack of human and financial resources, becoming overwhelming, the key that enables leaders to transform the impossible to solvable is a compelling sense of greater purpose that is shared.

An illustration is the story of how Kym Worthy, Prosecutor of Wayne County, Michigan raised, and is a catalyst in efforts to continue to raise, the millions of dollars needed to process over 11,000 rape kits that were unopened and untested, found in Police storage; some there as long as 30 years. The move to solvable is often slow, demanding resilience. For Worthy, who began this effort in 2009, it evolved from personal and professional commitment and actions to enlisting others in the goal that justice be available to each rape victim.

As with any leadership act once it taps into others’ shared beliefs, momentum builds that can overcome obstacles. Worthy’s efforts got on the radar of Detroit businesswoman Joanna Cline who involved other Detroit businesses in raising funds, awareness and donating services. A public-private partnership called Enough SAID (Sexual Assault in Detroit) has been created.

Meanwhile, Detroit had its own problems filing for, and then emerging from, bankruptcy. This could have derailed the business leaders’ efforts. However the fundraising continued. As an outcome of ethical leadership, the stakeholders had grown to include the city of Detroit as well as the rape victims.

“The business community has rallied around us,” said Peg Tallet, chief community engagement officer at Michigan Women’s Foundation in an interview, “particularly businesswomen who are saying this can’t happen here if we are going to make this the city we’re all working to make it.”

Worthy’s office “has been able to identify 625 people suspected of being serial sexual assault offenders.” According to one of the businessmen involved in Enough SAID, “…you can’t have economic development if you can’t feel safe walking to your car after work.”

Those involved in Enough SAID provide a crucial teachable moment for other cities, governments, chambers of commerce, businesses and communities in general.

The Week in Ethics

Gael O’Brien, November 8, 2015

Gael O’Brien is The Ethics Coach columnist  for Entrepreneur Magazine. She is also a columnist for Business Ethics Magazine where her September column  is “Volkswagen’s Next Challenge: Keep Scandal from Happening Again.”

The Week in Ethics: Is Ethical Leadership Contagious?

If you were trying to foster ethical leadership in your organization, could anything make it “contagious?”

For starters, labeling it as “ethical leadership” might not take you as far as you’d like. How often do people say they are on board, “get it” and don’t need more?  While they might be willing to read about or take courses in strategic or global leadership, for example, many equate ethical leadership with what they learned growing up; if they need to spend more time talking about it, it might look like they are deficient in Golden Rule 101.

That’s the problem with blinders leaders, high potentials and any of us can have about our own ethical development — why it can suddenly be hard to give voice to values (because we’ve never thought about a potential conflict that suddenly surfaces) or why decisions are made weighing only legal and financial consequences (without noticing the potential for unintended ethical consequences) or why we need to be right.

When we talk about ethics and leadership in organizations, we need to translate it into values and behaviors we want visible in the culture that in turn build off a company’s values. While we say that ethical leadership encompasses the highest personal and organizational standards that vagueness creates an abstraction where everyone “gets it”  in theory, and can overlook it in practice.

Our language sets up creating the norm of what the organization stands for — and the behaviors supporting that — which then demystifies and brings the type of leadership we want to see and cultivate into day-to-day reality. If those qualities are talked about in examples and stories when the CEO meets with the board, direct reports and others; if they are linked to business success, reinforced in informal and formal mentoring programs, meaningfully incorporated into performance reviews, and play a role in why people get recognized, promoted or let go: the norm can be imitated and then owned.

Emotional Intelligence (EQ) is increasingly being reinforced in organizations as a way to develop leaders and help them succeed. (See Daniel Goleman’s What Makes a Leader.) Reinforcing EQ reinforces attributes important in ethical leadership so it is a win-win.

Some resources for thinking about how ideas can take hold in a culture include Contagious: Why Things Catch On by  Jonah Berger (video above) and the books that fueled his thinking: Gladwell’s The Tipping Point and the Heath brothersMade to Stick.

Applying that to what could make ethical leadership contagious involves first looking at what  natural advantages exist in your culture to tap into to help ideas take hold. Then, what ideas might offer perceived value. For example, creating a special leadership forum site with links to good articles, blogs, book reviews and news stories fosters leadership development that reinforces the norm you want, with triggers to keep the subject top of mind, while saving leaders’/potential leaders’ time in finding useful information they can apply and share with others. Launch it with a sense of exclusivity: perhaps needing a password. Enlist the support of admired leaders in the organization to make reference in meetings to an article on the site they liked, and find other ways to have the site talked about and positioned as a place high potentials go for useful leadership tips. Who wouldn’t want to be considered “high potential”?

How do the values and attributes of ethical leadership become contagious in organizations?

They are modeled by the board, CEO and other leaders. They are talked about and interrelated with business and personal success. They are mentored and cultivated, enmeshed in the culture’s stories and allied with how people feel/see they can make a difference. They are linked to reducing stress. They are connected to what stakeholders’ value, attached to what it takes to belong and reinforced throughout the organization.

Gael O’Brien July 24, 2013

The Week in Ethics

Gael O’Brien is The Ethics Coach columnist for Entrepreneur Magazine. Gael is also a columnist for Business Ethics Magazine; her November 6, 2013 column looks at whether loyalty is owed when a boss acts as a good leader. 

The Week in Ethics: Leadership Lessons at American Academy of Arts and Sciences

column photo of ethics under microscope The integrity of the leader of an honorary society for independent public policy — founded  in 1780 during the American Revolution — is  under question as a result of misrepresentations on her resume and criticisms from former employees over her bullying, micromanaging management style.

While there is never a good moment for negative media attention, it is coming at a particularly awkward time for the American Academy of Arts and Sciences. It is landing on the eve of the June 19, 2013 release of a commission report the academy has guided for more than two years, expected to offer far reaching recommendations for education and cultural institutions.

Leslie Berlowitz, the head of the academy for the last 17 years, is now on leave while an internal investigation by an outside law firm addresses issues raised in a series of articles in the Boston Globe in June 2013. The articles indicate that the academy’s applications for at least three federal grants list Berlowitz having a doctorate from New York University (NYU) that NYU has no record of her completing. The National Endowment for the Humanities, which gave $1.2 million to the academy based on grant applications that included Berlowitz’s inflated credential, has referred the issue to its inspector general.  The Massachusetts Attorney General’s Office (charged with overseeing nonprofits) has also announced an investigation. Two others who gave grants to the academy (US Department of Energy and Carnegie Corporation of New York) are checking to see if false information was provided on their grant applications.

The articles indicate that in checking her resume against NYU records, where she worked before joining the academy, a job title for one position is misstated and length of service for another is misrepresented.  Academy employment ads refer to Berlowitz as “doctor” and further investigation by the Globe reporter found an email two years ago from Berkowitz where she implied she had a doctorate.

A month after turning down requests to be interviewed by the reporter and two weeks after the first Globe story was published, Berlowitz said in a statement that she “never intentionally misrepresented her accomplishments,” accepted responsibility for materials that left “an incorrect impression,” and acknowledged that she had the title of vice president of institutional advancement at NYU rather than academic advancement which, the Globe reported, has appeared on the academy website and in grant applications.  An academy spokesman originally blamed Berlowitz’s staff for resume errors, saying she was unaware of them.

The profile that emerges in the article is of a board/governing council extremely supportive of Berlowitz, who in 2004 bypassed the normal election process for membership into the Academy of Arts and Sciences — which honors the most accomplished scholars, innovators, and artists in their fields — when they added her as an inductee. They quietly inserted her name into “the original six-month-old announcement, a spokesman acknowledged, making it look as though Berlowtiz had been voted in along with everyone else in the spring.” Berlowitz’s $598,000 salary — higher than many college presidents’ — and first travel perks also indicate Board support. Former employees quoted in the article indicated the board ignored complaints about Berlowitz’s management style made to them.

The significant number of former employees willing to talk (anonymously and as named sources) to the Globe about their criticisms of Berlowitz’s leadership, calling her management style bullying, harsh, dismissive and micromanaging raise the question of what is motivating them. Is it a set up or revenge by those who believe they were treated badly capitalizing on her current vulnerability? Or is the issue an outcome of a detached governance process with too heavy reliance on the internal leader and no means to ensure that the leader’s management style and the organization’s work environment are functional and appropriate?

Either way it offers a cautionary tale about leaders vulnerability when they are unaware of the impact their leadership tone, style and communication have on employees; or worse, when they ignore or rationalize that impact without seeking to address it.

The unfolding saga at the academy also sends a message to boards that they have a responsibility to help an organization’s leader succeed by not just looking at the results, but being aware of the impact a leader is having on the larger team; and when there are red flags, stepping up to ensure the leader gets coaching in emotional intelligence or other issues, monitoring his or her workplace performance to be clear about expectations of improvement.

The academy’s purpose is to honor excellence. The need for all the investigations indicate that excellence has been compromised in terms of how the academy and their leaders have operated internally. Restoring integrity will involve transparency about the investigations’ findings, dealing directly with allegations about Leslie Berlowitz’s leadership, and putting as high a priority on how things are done internally as the achievements that result from them. The founding fathers would expect no less.

Gael O’Brien June 18, 2013

The Week in Ethics

Gael O’Brien is The Ethics Coach columnist for Entrepreneur Magazine. Gael is also a columnist for Business Ethics Magazine; her June 2013 column looks at leadership vulnerabilities of departing OSU president Gordon Gee.