It’s Time for Your Corporate Culture Health Check.
Does your organization have an ethical leadership problem? Here are the warning signs and what to do about them.
In 2008, I had just left Morgan Stanley and started at IBM. I was a leadership and organizational development consultant working on topics around improving company culture including trust, values, and ethical leadership. We were only a few years past the fall of Enron, and right in the middle of the global financial crisis. The topic of ethical leadership was very relevant, but maybe not the topic in the executive development programs that people were leaning out of their seats to listen to. It was taken for granted at that time.
Cut to today. Perhaps one of the most important lessons we’ve learned from the pain, suffering, and dehumanization of these times is that trustworthy leadership that is ethical and values-based is critical to company culture. Ethical leadership cannot be taken for granted or overlooked in our organizations. Companies that don’t address this oversight face a judgment day. The generations newest to the workforce will not tolerate it, and the generations of employees who have been quiet for decades might finally be ready to speak out, or walk out, too.
Does your organization have an ethical leadership problem? Here are the four warning signs and what to do about them.
1. Are your policies and practices designed for mistrust or trust? We have spent decades designing our rules in organizations around the people who have misbehaved terribly. Something goes wrong, someone does something unconscionable, and we react with a new or tightened rule or restriction.
Here’s an example from an organization I worked with. We held a senior leadership call to brief the leaders on business results and new strategies. A day after the call, information that could have been known only by those on the call was now public. Someone misbehaved badly. They leaked it. What action was taken? The organization stopped sharing sensitive information with the extended group of leaders. That group could not be trusted. As a consequence, the vast majority of the leaders who were trustworthy were no longer treated with trust and now lacked the insight and transparency they needed to lead and engage their teams. One bad egg, and maybe the next one, was addressed. But what was the impact? Trust was eroded, and not just with those leaders, but with their teams as well.
What’s the Solution? Design for the people you want in your organization, not the ones you should be weeding out. Take each rule and policy you have and view it through this lens: Is this rule/policy for the people we want to have or for the people we want to weed out? What you uncover might be eye-opening.
2. Are your programs and processes designed for internal competition or collaboration? To drive results and high performance, we have told employees that not everyone can be a top performer and not everyone can excel. Some people are more valuable or have a higher rating than others. What’s the consequence? People compete rather than collaborate with each other to drive results. This creates a scarcity vs. abundance mindset (read more about that in my article on organizational design principles). It tells people there is not enough and that they are not enough. It impacts their motivation and beliefs about what is possible, which directly affects what is then possible for your organization.
What’s the Solution? Design with a belief that each of your people has capabilities beyond your knowledge and has the desire to do amazing things in community with others. And let them succeed together!
3. Are your leaders leading you into your future or keeping you in your past? There are two dead giveaways that your leaders are future averse. First, notice how precious and protective they are about how things were done in the past. It can sound like nostalgia or a longing for when times were better. It is a signal that they want to go backward and revert to what was vs. create a new future. They are constrained by this longing. It can cloud their ability to see the organization as it is and to identify what is possible going forward. It can also show up as defensiveness around people who bring new ideas and want to drive change. If leaders don’t like those people or those ideas, don’t accept that at face value. There is more to be discovered there. Keep digging.
The second giveaway is that they use intimidation or power plays and have a dark side that shows up in team meetings. There were bullies in our neighborhoods when we were kids and there are bullies in our organizations now. Just because people follow these leaders and perform for them, it doesn’t mean those leaders are effective. Employees can perform out of fear (although not to their potential). The more territorial these leaders are and the more they show up in all the meetings and in all the details, the more you should fear what is really going on.
What’s the Solution? Find and cultivate leaders who care deeply and who are open to learning, listening, and creating new ways forward. Find the leaders who cultivate greatness in others. Your employees know who they would choose to work for; listen to them.
4. Are you looking for the truth or looking to look good? We all fear our personal and organizational imperfections, especially the ones we think others see but maybe we don’t. This is why we fear performance reviews, relationship “talks,” assessments, and organizational surveys. We fear being exposed. We fear being hurt. We fear being misunderstood. So, what do we do? We don’t ask the tough questions. We ask what we hope to hear. We avoid the real conversations. We talk around the real issues. We talk around the person to other people.
We also try to manipulate or influence results. These manipulations can materialize as trying to change the feedback on Glassdoor or as “jokes” with our colleagues like, “Hey, you better be nice to me in that assessment you were asked to fill out. Wink, wink.” We know what we fear, but what do we really want? Do we want to believe we are perfect? That would be nice, but we know that is not real. It is not human. What we want is the truth delivered in a way that we can hear it.
What’s the Solution? We need to find ways in our organizations to give meaningful and human-centered feedback, and to share it in a way that builds people up instead of breaking them down. Looking good inauthentically has no value. Knowing how you can grow and continue to evolve is everything.
We are all being called to do better and be better together, and it is time. It is time for your company culture to be what you and your employees want it to truly be.