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Ethics and building trust

Decisions need to made in an ethical way that supports, rather than undermines, the messages of the change process, as Dr Julie Hodges explains.
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One of the leadership practices important to the change process is sponsorship. And part of that, for leaders and managers, is to role model the behaviours you want to promote in your employees. This helps to build and maintain trust in how the process will be managed, all of which are linked to going about the process in an ethical way. Ethical leadership covers the following dimensions– respects others, serves others, shows justice, manifests honesty, and builds community. Most organisations that I’ve seen tend to rely on systems or technologies or key performance indicators to instil a sense of ethics or to instil the right behaviour within the organisation.
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In my experience though, I’ve seen success in instilling such behaviour comes from the leadership teams having a clear understanding for what they want to instil within the organisation, embedding that within the culture of the organisation, and then living that on a day-to-day basis. So demonstrating those behaviours. An example would be one of the banking clients that I consult for. It was a clear rule in the organisation that they cannot hire in certain suppliers outside of the preferred supplier list. However, the CEO had a relationship with one of the partners from an agency and brought in that agency for a project. So this clearly doesn’t demonstrate the kind of behaviour that you want to instil within a bank, for example.
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So I think really leadership teams living those ethical behaviours in a day-to-day basis in the business is quite important. There can be a number of ways to deal with unethical issues when they arise. First of all, it’s important to identify what the issue is. It can help to try to separate ethical issues from simple disagreements about manners and social conventions. For example, an individual fails to attend a kickoff meeting to discuss changes to operating processes. This may be considered bad manners and falls short of peer and team expectations. However, this is not an ethical problem involving right or wrong.
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On the other hand, a decision over whether to make someone’s job redundant during a restructuring exercise because you do not like them is an ethical issue. If you decide it is an ethical issue, you’ll need to determine who is responsible for addressing it. It may be more than one person. For example, you may be concerned that one of your suppliers involved in changes to your supply chain is exploiting child labour, and, therefore, you need to decide what you should do. It’s important to make sure you have all the relevant facts.
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For instance, in deciding whether it is fair to suspend a colleague for being rude and aggressive about a proposed new IT system, you’ll need to discuss the issue with the individual’s colleagues, line manager, and the offender to determine the seriousness of the offence and the reason why they criticised the system before you make a decision.
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Take time to reach a decision on whether you feel an issue or course of action is right or wrong. Does the decision cause a negative reaction? Would it make you uncomfortable if it was publicised on a social media site? Does it violate the ethical code of your organisation, if there is one?
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If the organisation has an ethical code of conduct, make sure you apply these standards and practises in what you do. Redundancy is one area where the ethical behaviour of an organisation will inevitably be tested. How can we apply the ethical standards and practices of an organisation while at the same time reducing the workforce? Transformational change, in particular, could involve difficult decisions as well. For example, cost reduction exercises or job cuts, restructuring, in these types of situations it’s challenging to motivate people and keep a positive environment, but a leader would be someone who is able to then drive the change in a very human way.
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A good example would be a manufacturing company in Dusseldorf, Germany that I consulted for a few years ago. And we basically identified 25% job cuts, so that was part of the cost reduction exercise. And I was very impressed with the way the management team handled that situation simply because with union discussions in Germany it’s obviously a difficult environment, and it’s challenging to initiate job cuts. They were able to actually create a very positive situation around the reductions where employees were supported post-reduction. They were helped with skill revisions, for example. They were helped with career counselling and things like that to help them re-enter the market.
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So they were supported through the journey, and they were not just cut out of the system. Another example that’s kind of the opposite situation would be a bank that I consulted for where employees were brought into a conference room in the morning and told that they had lost their jobs that day and were told to leave the premises. So you can see kind of a different way to handle change in an organisation. Once you fully consider the issue, make the decision. It’s crucial to lead from the front and not shy away from difficult situations. Of course, having made the decision, it will be important to revisit and reflect on this.
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Ask yourself, what lessons emerge from this case that you can apply to future decisions? What ethical issues were raised? Did you address them in the correct way? Ethical leadership is not something you can pick and choose when you apply it. It’s got to be something that’s there and part of how you work on a day-to-day basis.
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I think I would start from the perspective of how would I want to be treated and how would this approach or decision impact on me. And I think it’s important to think about not only the intended consequences of decisions and actions, but also the unintended consequences of those decisions and actions because it gives you a better opportunity to see the big picture and understand things from different perspectives.

The change process, as we’ve seen, may not be positively perceived by everyone. In fact, there may be some difficult decisions that have to be communicated which have direct effects on individuals – for example redundancies or job relocations.

It’s also important to bear in mind that employees who may be unaffected by the change are also important to this process as they will have responses of their own to what is happening to colleagues. Care needs to be taken to ensure business decisions are made in a way that supports, rather than undermines, the messages of the change process and the role-modelling of behaviours that leaders and managers want employees to adopt.

In this video we will also consider how we could, as managers and leaders, respond to change situations in a way that is authentic and ethical in outlook and as such, helps build trust.

Further reading

If you are interested in exploring ethical responses in more detail, the following books are recommended:

Ciulla, J. B. (ed.) (2014) Ethics, the heart of leadership, (3rd edition), California: ABC-CLIO. Kitson, A. and Campbell, R. (2008) The Ethical Organisation, London: Palgrave McMillan.

And also this article in The Times (UK), which is subscription-based.

Chynoweth, C. (2015) ‘Ethics v profit: the fight goes on’, The Times, 25 January 2015.

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Leading and Managing People-Centred Change

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