The investigations on Wells Fargo’s ethical issues led to suspension of business relationships with the Sates of California and Illinois. A high pressure sales environment drove employees to create as many as two million fake accounts. The investigation revealed that the bank has ignored and discouraged employees who tried to voice concerns about their internal unethical practices. Further, some former employees had come forward alleging the company to have a culture of fear and daily intimidation by its managers and leaders.
We live in a world where high performance has become an important determinant of organizational survival and sustainability. However, the above case clearly proves how an unethical climate can have a direct and devastating consequence in terms of organizational success.
Humongous cases of ethical dilemmas are being experienced in every sphere of life – be it professional or personal. From being a student to a teacher or taking charge as the CEO of a firm, one thing that needs to be inculcated in each of them is how to have an ethical mindset. There is much research evidence that proves how ethical environment plays an important role in determining organizational excellence by providing an environment that fosters trust and commitment, provides positive leadership, and creates a high quality of workforce to improve organizational performance. No one can undermine the importance of ethical environment in enhancing organizational performance.
Sadly, even a strong ethical mind can be susceptible to the external ecosystem. In a research conducted by Duke University, it was found that high performing ethical MBA student too may be prone to cheating in exams when they see people around them are cheating during exams. He does it because ‘everyone does it’. Even if one starts out with high personal ethical standards, it is easy to wander off seeing how other minds are rewarded in short term. The myopic vision blocks creates ethical conundrum. However, there are examples like James Burke; the CEO of Johnson & Johnson who has been narrated many a time when one talks about ethics. When Burke recalled all Tylenol products during the scare of 1980s, he exemplified ethical code of conduct in the face of all challenges during his time.
So, try and understand where you as a leader stand between ethics and organizational performance. Try to inculcate a culture of ethics in your organization by following these simple five steps:
- Articulate your organizational ethical values, codes and standards in the most effective way. Share these among each and every team through several possible medium. Inculcate it in every process including from joining function where employees are hired or promoted based on their competence and not on favoritism; where individuals are appreciated, trusted, and fairly treated.
- Promote a full proof whistle-blowing policy which must be taken extremely seriously by the organization and their inmates. An actionable policy that echoes the sanctity of the process that all voices are being heard and will be taken in high regards. Employees must be free to blow the whistle without the fear of risking their jobs. And Whistle blowers need to be well protected in every organization.
- Functional managers need to make sure that employees are aware of all ethics requirements during any operational challenges. They need to use training programs to keep reinforcing the need at every instance. Help create a culture where compliance with rules and procedures is taken seriously; and unethical behavior is punished harshly.
- Leaders need to showcase and act according to high ethical standards at every instance. They need to walk the talk by following laws and codes of ethics and consider them while making decisions. They also need to incorporate performance improvement strategies with strong ethical values and practices.
- Coach and mentor employees who are unwilling to report ethical violations. Majority of employees fall under this category, hence increase the periodicity of your interactions with them. Create campaigns that bring in all stakeholders together to highlight success stories that have been a result of ethical decision making.
Remember an ethical environment creates trust and integrity that safeguard against all ethics failure. Research proves the assumption that organizations that provide employees with the opportunity to work in an ethical environment are better off in dealing with misconduct, safeguarding against corruption and hence improving organizational performance. This is truly the case because an ethical environment is more likely to increase job commitment and job satisfaction in a fearless ecosystem. Hence, put all your efforts to create an ethical environment that does not emerge and operate in a vacuum but in an organizational culture by which it is greatly influenced and shaped.