My favorite seminar exercise asks participants to identify organizations they consider “ethical” and those they consider — well — less than ethical. I won’t be naming the bad guys in this post, but I’ll describe the exercise and some of the conclusions I’ve drawn since 1993.
I call this exercise the “Ethical Organization.” Participants break into teams of 5-6 and spend 20 minutes identifying organizations the consider “ethical” and those they consider “unethical.” Teams establish their own criteria for labeling the organizations. We don’t define ethics in advance.
Each group nominates an organization in each category, “ethical” and “unethical,” and they list reasons to support their nominations. A spokesperson from each group then presents its nominees. As moderator, I post the names and the reasons on the whiteboard.
The list of “unethical organizations” is populated with companies that have abused their relationships with one or more key publics. Sometimes this abuse involves deceit and deception, but other times companies become villains because of poor quality and service. Banks are favorite whipping boys in the exercise, owing to complex fee structures and inflexible customer service policies. (Wonder how they’ll fare after the mortgage mess?) One or two major retailers are singled out for mistreatment of employees, abuse of customers and lack of community conscience. And you know, almost no one likes their cell-phone service provider.
The “ethical organization” list is heavy with nonprofits that raise money or provide services to help people in need. Often selected are the Red Cross, Salvation Army, and Susan G. Komen Foundation. Rarely do for-profit businesses make the “ethical” list, unless the companies have a track record of supporting the public interest. Ben & Jerry’s Ice Cream has been the for-profit favorite for years, showing the power of Rainforest Crunch!
What makes an organization ethical? Yeah, I know this exercise oversimplifies the complex issues of ethics. That’s precisely why I do it. As consumers, investors and citizens, we often act based on perceptions of organizations. We prefer to buy from companies we respect, though price and convenience do influence us, as the folks at Wal-Mart can attest. But in end, we would like to support and patronize organizations based on ethics and social responsibility, given the option. (There’s a body of research to support this notion, but I don’t have time today to locate and link to it.)
After 15 years of staging “The Ethical Organization” 4-5 times a year, here’s a short list of what people tell me they respect in organizational behavior:
Respect for people over profits. Even in my seminars loaded with students from the College of Business, this one shines through. Ethical organizations respect their employees and their customers, putting their well-being ahead of the bottom line. You can see why the do-good nonprofits score so well in this exercise.
Respect for the communities where they live and work. Ethical organizations are involved in the community. They encourage and reward employee volunteerism and often they donate money and resources to enhance quality of life for those around them. Management is visible, and shows leadership in the community. They are corporate citizens.
Respect for quality. The quality issue comes up in almost every session I lead, but is quality really an ethical issue? Maybe not, but people respect organizations that strive to “get it right.” Quality of a company’s product or service tells us a lot about how much that company respects its publics and itself.
Respect for communication — 2-way communication. Organizations needn’t be perfect to be ethical, but they must be willing to talk about and correct their mistakes. It could be something as simple as customer service programs that empower employee to “make it right.” It could be a company that uses social media as a listening post, then uses the input to align its policies with the public interest. It could be a quick and transparent response to a crisis. Let’s face it, Johnson & Johnson remains one of the most revered companies in the world based on how it handled a historic crisis 25 years ago. J&J frequently makes the “ethical” list in my seminars as well.
Respect for the environment. It’s clear, particularly among GenX and the millenials, that we respect companies that respect the planet. Seminar participants frequently place polluters and oil companies on their black list. And yes, Exxon still suffers from the errors of Valdez, just as J&J benefits from Tylenol.
Finally, the virtuous organization is led by role models. Seldom do companies whose executives earn 9-figure bonuses make our seminar’s “ethical” list, no matter how financially successful those companies may be. People simply distrust companies that shower a select few executives with obscene riches. Ethical organizations keep their greed in check.
I’ve conducted the Ethical Organization exercise with more than 1,000 participants since 1993, from college students to seasoned professionals. The outcomes are remarkably similar. We respect organizations who respect us. We respect organizations that do right.
Does this surprise anyone?
Now, if only we could show conclusively that ethical behavior translates directly to profitability. It may just get our battered and bruised free enterprise system back on track.
(Ethics graphic from Belmont University)