What are Your REAL Values?

Lila Maclellan has written an important story for Fortune titled "The recent debacles at Boeing and Meta highlight the dangers of shrugging off employee concerns."  Boeing, of course, has been saddled with product quality and safety troubles for several years, including two fatal crashes of the Boeing 737 MAX, about which I wrote a case study.   Meta has had repeated instances of internet safety and privacy issues, for which senior leaders dismissed or downplayed employee concerns.  

In this article, Maclellan cites Ann Skeet, senior director at the Markkula Center for Applied Ethics at Santa Clara University.  Skeet says, “When people bring things to your attention, it’s an opportunity to reset expectations and to clarify culture.  But if the leadership says that we can continue even when people are surfacing things they feel are inconsistent with the organization’s espoused values, it suggests there is another set of values that are actually being applied.”  

Skeet makes an important distinction here between an organization's espoused values and its values-in-use (a concept first articulated by Chris Argyris).  The espoused values are those that we find on the placard posted on the wall, or articulated by senior leaders when addressing employees and other stakeholders.  The values-in-use are the REAL values as identified by the ACTIONS of the leaders in the organization.   When employees perceive a serious disconnect between the espoused values and the values-in-use, then disenchantment and disengagement rise.    Some people stay silent in the face of serious problems.  Others simply exit the organization.  Leaders at all levels need to constantly ask themselves: Are we walking the talk?  Are we living up to our espoused values?  Or, are employees perceiving us as disingenuous?  If so, why has that perception arisen?

Do the Word Choices in Your Company Code of Conduct Matter?

Source: Needpix.com

Maryam Kouchaki, Francesca Gino, and Yuval Feldman have conducted a fascinating series of studies regarding company codes of conduct. These scholars examined many different codes of conduct. They noticed many similarities with regard to content. In other words, companies tend to prohibit the same types of misbehavior, as well as encourage the same types of positive conduct. However, the researchers found that word choices differed in at least one important way. Some codes of conduct employed "communal" words such as "we" and "us." Other codes spoke in more formal language: "Employees should not..."

Did these word choices matter? Initially, the researchers hypothesized that communal words would encourage more ethical behavior. Surprisingly, though, their research found the exact opposite! Through a series of experimental studies, Kouchaki, Gino, and Feldman discovered that people tended to engage in more unethical behavior when given a code of conduct including many communal words and phrases. 

The scholars then examined corporate misbehavior. Here's what they found, according to this description of their research by Kellogg Insight:

Finally, the team wanted to test whether communal language was linked to acts of corporate misbehavior in the real world. So the researchers examined codes of conduct from 188 S&P 500 manufacturing firms. They also looked up news articles about bad behavior at those companies, such as employees committing fraud or breaking environmental laws, and found 873 such violations from 1990 to 2012. Employees at companies with “we” language were more likely to act unethically.

What explains this surprising result? Kouchaki offers one interesting potential explanation: she argues that communal language create a situation in which, “the group is being seen as forgiving and tolerant." In those situations, perhaps individuals do not believe that unethical or inappropriate conduct will be punished in a substantial manner. If people believe that the response to bad behavior will be "soft" then perhaps they will be more likely to misbehave. The scholars don't argue that we should avoid trying to create a communal atmosphere, but they do prescribe a clear emphasis on an intolerance for inappropriate and unethical behavior, and a clear message that misconduct will be handled seriously and substantively.

Rationalizing Bad Decisions: How Moral Disengagement Plays a Key Role

Source: Pixabay

Darden Ideas to Action, a site that features cutting edge research insights from the Darden School at UVA, published a fascinating piece earlier this year titled, "TALKING OURSELVES INTO IT: HOW WE RATIONALIZE BAD CHOICES."  The article describes research by James Detert and Sean Martin, along with several colleagues from other schools.  Jim and I went to graduate school together, and he is a terrific scholar of organizational behavior.   You can read the underlying research here.  

These scholars have documented a rationalization process that they call "moral disengagement" that unfolds when we are trying to justify to ourselves and others our poor decisions.  Detert and Martin have created a typology of moral disengagement strategies, and they offer some examples of the types of pharses associated with each strategy.  Here are the eight types.  The list proves a useful tool for self-reflection.  You can ask yourself:  Am I thinking or saying something similar to these phrases?  If you answer yes, it might be time to step back and reconsider your course of action or your decisions.  

Here are eight common moral disengagement strategies and what they sound like:

Moral justification (“This is actually the morally right thing to do; we’re actually helping them by doing this.”)

Euphemistic labeling (“I’m just ‘borrowing’ this.” “It’s ‘collateral damage.’”)

Advantageous comparison (“Doing A, is not as bad as doing B.” “It’s not like I’m doing B.”)

Displacement of responsibility (“My boss told me to do it.” “I’m just following orders.”)

Diffusion of responsibility (“Everyone’s doing it.” “It’s a group decision.” “This is just a small part of a bigger system.”)

Distortion of consequences (“This is a victimless crime.” “No harm done.” “It’s no big deal.”)

Attribution of blame (“They brought it on themselves.” “Buyer beware.”)

Dehumanization (“They’re a bunch of dogs.” “They’re like robots.”)

Understanding Unethical Behavior

Maryam Kouchaki, Nour Kteily,  and Adam Waytz have conducted experimental research to examine repeated unethical behavior.   What psychological mechanisms drive serial offenders to lie and cheat time and again?   These scholars found that individuals try to escape taking personal responsibility for their deceitful actions by blaming their own personality.   It's sort of a "Woe is me, I can't control these bad attributes that drive my behavior" type of thinking.  Kouchaki notes, "Because morally questionable behavior is uncomfortable, people don’t want to take responsibility for it."  

The scholars call it self de-humanization.   Individuals conclude that they have less capacity for self-control, that they don't have the capacity to prevent themselves from making bad choices. Kouchaki explains, "You behave consistently with your self-view that you lack these human capabilities of agency and experience."  In other words, people adopt a negative self-image as a way to justify their unethical behavior.   A vicious cycle ensues.  Bad choices beget this rationalization process, which then makes it easier to cross the line and lie/cheat/steal in the future. 

Confronting Unethical Behavior in the Workplace

I recently read a thought-provoking piece by Darden Professor Mary Gentile about what she calls values-based conflicts in the workplace.  Gentile argues that we often hear a series of rationalizations if and when we try to raise concerns about the ethics of certain behavior in organizations. Gentile argues that it is worthwhile to step back and try to understand the nature of the objections and rationalizations. In so doing, one can formulate a more effective response and can speak up more effectively. Here are the questions we should consider according to Gentile: 

• What are the main arguments you are trying to counter? What are the reasons and rationalizations you need to address?
• What’s at stake for the key parties, including those who disagree with you? What’s at stake for you?
• What levers can you use to influence those who disagree with you?
• What is your most powerful and persuasive response to the reasons and rationalizations you need to address? To whom should the argument be made? When and in what context?

I think these four questions are incredibly helpful.   Moroever, I'm particularly interested in the second question.  I think that question pertains to any conflict in the workplace, even if it has nothing to do with ethics.  Suppose you want to question a plan of action proposed by another manager.  Asking yourself what they have at stake in this situation, how invested they are in this plan, can be important, as it may help you understand the extent to which they will be defensive.  Moreover, it will help you understand what might trigger interpersonal friction and conflict in this situation.  If you want to engage others in a productive debate (i.e. constructive conflict), it's crucial to understand how high the stakes are for the other party, to understand where their passion and emotional investment resides.  

Law of Unintended Consequences

Organizations and people within them respond to incentives.  They just don't always respond the way that we would like them to do so.   We might have a policy designed with the best of intentions, but it may have serious uintended consequences.   Take, for example, this article from yesterday's Wall Street Journal.  It reports on a new study published in the JAMA: Cardiology.  Melanie Evans reports: 

The Affordable Care Act required Medicare to penalize hospitals with high numbers of heart failure patients who returned for treatment shortly after discharge. New research shows that penalty was associated with fewer readmissions, but also higher rates of death among that patient group.

The researchers said the study results, being published in JAMA Cardiology, can’t show cause and effect, but “support the possibility that the [penalty] has had the unintended consequence of increased mortality in patients hospitalized with heart failure.”

The article goes on to report some disagreement among researchers about the impact of this policy.  Nevertheless, it notes concerns by some physicians about the possibility of unintended consequences and the desire by many to see further research on this matter.

More broadly, this article reminded me that managers need to consider the law of unintended consequences as they establish policies, metrics, and procedures.  For instance, managers may have great intentions when they create a new incentive compensation scheme.  However, the reward system may cause behaviors that they did not foresee or intend to stimulate.  In fact, they may see some adverse effects because of the ways in which their scheme distorted behavior.   One can blame individuals for unethical behavior that emerges as people try to achieve ambitious targets and garner bonuses, for example.  Or, one could ask:  Did we create policies that unintentionally encouraged people to act in unethical ways?  I'm not excusing bad behavior, but I am encouraging to think carefully about the systemic reasons for unethical action within firms.  

More CEOs Fired for Ethical Lapses

The Wall Street Journal reported this week on new research from Strategy&, the consulting practice of PWC, about CEO dismissals. The researchers found that more CEOs are being fired these days due to ethical transgressions. According to the newspaper, "CEO ousters due to ethical lapses—either their own improper conduct, or their employees’—are climbing. Such forced exits rose to 5.3% of CEO departures in the 2012-to-2016 period, up from 3.9% during the previous five years." 

 The article goes on to quote Per-Ola Karlsson, a Strategy& partner, about the reasons for this uptick in such firings. Karlsson argues that the trend is not the result of an increase in unethical behavior. Instead, Karlsson cites the rise of social media, the loss of trust in institutions as a result of the scandals from the 2007-2009 period, and the enhanced attention from regulators as reasons for the increase in dismissals. The bottom line - for whatever the reason, CEOs are being held accountable for ethical lapses.  That's a good thing.  It shows that they can't escape from responsibility for flawed decisions that due harm to consumers and other stakeholders.   The data suggest that CEOs should have all the more reason to be highly vigilant about uncovering hidden risks in their organizations, welcoming those who wish to share bad news, and demonstrating transparency when problems do surface.  

Unreasonable Goals, Unethical Behavior

In a recent Harvard Business Review post, Liane Davey explores the connection between unreasonable objectives and unethical behavior.  Sometimes, you face a difficult situation as a team leader.  You have been given an unreasonable goal to achieve.   Davey examines how team leaders can prevent their employees from engaging in inappropriate conduct as a means to achieving highly aggressive goals.  

First, Davey argues that you need to "define the off-limits options" when discussing how to achieve your objectives.  Davey recommends asking, "What would we not be willing to do to hit our target?”  Second, Davey argues that you need to probe carefully to understand how people are trying to achieve their targets.  Don't just focus on results.  Focus on the behaviors and the processes that are being employed to try to achieve those results.  Third, don't single out publicly those people who are struggling to achieve highly aggressive goals.   Such shaming may cause them to resort to unethical methods to achieve better results.  Finally, keep your eye out for outliers... people doing extraordinarily well in the face of aggressive targets.  If one person or unit is exceeding all others by 30%, you might want to ask, "How could they be doing so much better than all the others?"  Don't accuse them of inappropriate behavior without any evidence, of course.  Probe to understand what their best practices might be, for purposes of sharing those with other team members.  However, be on the lookout for any evidence that they may be crossing the line in pursuit of top notch results.  

In sum, these types of vigilant behaviors will help avoid some very unpleasant surprises.   Don't just complain about unreasonable objectives, or demand that your team go above and beyond to achieve those results. Keep a close eye on how people go about their work so as to avoid putting you and your organization at great risk.   

The Benefits & Risks of International Experiences

A team of scholars has published an interesting new study in the Journal of Personality and Social Psychology regarding the impact that foreign experiences have on our behavior (Jackson Lu, Jordi Quoidbach, Francesca Gino, Alek Chakroff, William Maddux, and Adam Galinksy).  They built upon prior research that has demonstrated that foreign experiences bring certain important benefits to individuals.  Specifically, prior work has shown that foreign experiences foster cognitive flexibility and enhance creativity.   They also reduce intergroup bias.  

This new study shows that foreign experiences have negative impacts as well.  These scholars conducted eight studies using multiple research methodologies.  They found that foreign experiences enhance moral flexibility.   By that, they mean that foreign experiences increased moral relativism, and thereby enhanced immoral behavior on the part of individuals.  The findings held true even for people of different ages and cultures.  The study certainly does not mean that we should limit our international educational, travel, and work experiences.   However, it does sound a note of caution about the effects these experiences have on us.  The benefits can be substantial, but some important risks do arise.   

Remembering (or Forgetting) or Own Misdeeds

Maryam Kouchaki and Francesca Gino have conducted some interesting research about how we think about dishonest or unethical behavior.   In a series of experiments, they examined how we recall our own misdeeds versus the unethical decisions and actions of others. What did they find? First, according to this article from Kellogg Insights, they discovered (not surprisingly) that, "People recall their unethical behaviors with less-than-vivid clarity—increasing the likelihood that they will take similar actions in the future."  The scholars describe this phenomenon as "unethical amnesia."  They argue that such behavior is problematic because forgetting our own misdeeds makes us more likely to take such actions again.   If we recalled that behavior more clearly, it would act as a deterrent.   Why do we engage in unethical amnesia?  Well, of course, we are employing a defense mechanism.  We don't like to consider ourselves in a negative light.  Failing to reflect on our own misdeeds, however, may heighten the risk that we engage in such bad behavior again.  

What about others' misdeeds?  The scholars find that we are much more likely to recall the unethical behavior of others than our own.   Here's the experimental result:

So are all memories of unethical behavior hazy? Or are we just fuzzy on our own bad deeds? The researchers tested this question by having people adopt the perspective of someone else. They recruited participants online to read a story describing either ethical or unethical behavior. Some of the stories used a first-person perspective so that the reader assumed the point of view of the main character. The other stories used a third-person perspective.

Four days later, the participants rated their memory of the story. Indeed, the perspective of the narrator—and therefore, presumably, the reader—mattered. Participants who read a story with a third-person perspective remembered it just as clearly whether it was about ethical or unethical behavior. But participants who read a first-person story reported remembering the story about unethical behavior less clearly.

Does Group Loyalty Breed Unethical Behavior?

Angus Hildreth, Francesca Gino, and Max Bazerman have conducted a fascinating set of experimental studies that study the question: Does group loyalty breed unethical behavior?   Here's how they examined that research question.   They engaged members of three college fraternities.  First, they asked them about their loyalty to their organization.   A week later, they asked the fraternity brothers to solve a series of puzzles.  They could earn money if they solved them correctly.  Moreover, they could earn an additional cash prize if their organization outperformed the other two fraternities in the study.  The participants could score themselves in this exercise, providing them an opportunity to cheat.  The researchers employed a mechanism to determine who had cheated.  What did they find?  Interestingly, the fraternity members who expressed stronger loyalty to their organization tended to cheat less in this exercise.   Loyalty did not breed unethical behavior.  

Then the researchers conducted another experiment.  This time, they engaged four fraternities.  They provided each subject a note from their fraternity president at the outset of the experiment.   Some people received a note that said, "Please take these tasks seriously. Good luck!"  Others received a longer message that included the following statement in bold and underlined: "It is a tough competition, but I know we can win."  Before the experiment, each brother received a note from his house president. In some cases, the note read, simply, “Please take these tasks seriously. Good luck!” For others, the note was a much longer call to action, specifically referencing the competition with the other houses, and adding, in bold and underlined, “It is a tough competition, but I know we can win.”  

What did they find?  The members who received the first note again tended to show the same pattern: loyalty tended to be correlated with ethical behavior.   However, for those receiving the second note, they saw a different pattern: "Strongly loyal brothers cheated at a rate of 66 percent, compared to only 42 percent for those who were less loyal."  In this case, loyalty seemed to breed unethical behavior.  

Hildreth concludes, "We provided evidence suggesting loyalty can be a good thing, but there is a big caveat, which is beware when you tell people what their loyalty demands because that can have a strong blinding aspect to it.”

Creativity, Entitlement, & Unethical Behavior

Maryam Kouchaki of the Kellogg School and Lynne Vincent of Syracuse University’s Whitman School of Management have conducted some fascinating experimental research addressing the relationship among creativity, entitlement, and unethical behavior.   They conducted an interesting experiment in which they gave subjects a test to examine their creative potential.  Some were told that they scored highly, and that many others did as well.  Others were told that they stood out, scoring much higher than the typical participant.  Then the subjects participated in a game in which dishonest behavior could yield higher payoffs.  Here's what they found, according to Kellogg Insights:

The results show that when participants were told they were creative but that creativity is common, there was no adverse effect on behavior. It was when they were told that they were uniquely creative that bad behavior ensued. Participants who had been told that they were creative and that creativity is rare were more than twice as likely to lie to their partners in the game than those in the other two groups. That same group also had a much higher entitlement score on a post-game questionnaire, which asked participants to rate their level of agreement with statements like, “I honestly feel I’m just more deserving than others.”

Kouchaki offers the key takeaway from this line of research:  She notes, “You want to encourage a culture of creativity, rather than a special treatment of creative people.”  I would add one other important notion to her conclusion.  It's not constructive to categorize employees (the creative, innovative folks vs. the "regular" people). That's a recipe for decreasing engagement and fostering resentment.  Moreover, it's not the way to drive innovation.  You don't want to bet on a flash of lightning from a select few.  Instead, you want to leverage the collective intellect of the crowd.  You absolutely want to create a culture where everyone feels responsible for coming up with better ways of working, improved products, enhanced systems and processes, etc. 

Does Thinking Quantitatively Cause Us to be More Selfish, More Unethical?

Scholars Long Wang, Chen-Bo Zhong and Keith Murnighan have conducted new research examining the link between a "calculative mindset" and selfish/unethical behavior.  They used the ultimatum game and the dictator game to conduct their studies.  These two exercises often used in business schools to teach basic principles of game theory.   They split study participants into two groups.    In the control condition, participants were primed by reading a historical account of the industrial evolution.  In the experimental condition, participants were primed by reading a tutorial about net present value analysis.   What did the scholars find?   The participants who examined the net present value tutorial acted more selfishly, and they lied more often during these games than those who read about the history of the industrial revolution.  In other words, those primed to think quantitatively tended to act more selfishly and unethically.   The scholars argue that the calculative mindset is not problematic in and of itself, but it becomes dangerous when it comes to dominate people's thinking.  They also point out that business schools often emphasize the calculative mindset a great deal.  They should question the impact of asking students to think quantitatively so often. 

Compelling Others to Lie: The Power of Social Pressure

Two weeks ago, the New York Times ran an article titled, "Would You Lie for Me?"  The article featured the work of scholar Vanessa Bohns and her colleagues.  In a series of studies, Bohn and her co-authors examined whether people could compel others to engage in unethical acts.  Moreover, they looked at whether people thought that they could persuade others to behave unethically.  The results demonstrated that most people underestimated the extent to which they could pressure others to comply with their requests.   Here's an excerpt:

In one study, 25 college students asked 108 unfamiliar students to vandalize a library book. Targets who complied wrote the word “pickle” in pen on one of the pages.  As in the Milgram studies, many of the targets protested. They asked the instigators to take full responsibility for any repercussions. Yet, despite their hesitation, a large portion still complied.  Most important for our research question, more targets complied than participants had anticipated. Our participants predicted that an average of 28.5 percent would go along. In fact, fully half of those who were approached agreed. Moreover, 87 percent of participants underestimated the number they would be able to persuade to vandalize the book.

The scholars replicated this finding in a series of different studies.  What's the implication of these findings?   In my view, leaders need to take stock of their actions.   They need to think about how much their behavior, however subtly, may be affecting others' behaviors.  Leaders may not realize how much they may be influencing their organization members.  We may not think we are placing undue pressure on others, yet in fact, these colleagues are feeling compelled to act in a certain way.  In some cases, we may be pressuring them to behave in ways that are not consistent with their values or the stated organizational values.  We may not even intend to pressure them.   Nevertheless, we are influencing them.  In addition, we may fail to appreciate how difficult it might be for lower level employees to ask questions, push back, or resist engaging in certain conduct.  They may comply without ever questioning a course of action. We may fool ourselves into believing that they would object if they felt strongly.   Bottom line - they may not object because they feel such social pressure to comply. 

Mental Fatigue and Ethical Behavior

The Wall Street Journal reports today on a study by Maryam Kouchaki and Isaac Smith published in Psychological Science.  In a series of experimental studies, their research shows that people have a great tendency to engage in unethical behavior in the afternoon than in the morning.  Why?  According to the newspaper, "The researchers found evidence that, as the day wears on, mental fatigue sets in from hours of decision making and self-regulation, raising the odds of transgression."  It makes me wonder... have any studies examined whether people are more likely to engage in unethical behavior while multitasking?  Does distraction work in the same way that fatigue does, raising the odds of transgressions? 

Cheaters vs. Cheating: Words Matter When It Comes to Crossing The Ethical Line

Christopher Bryan and Gabrielle Adams have conducted a neat new study regarding ethical transgressions.  They examined whether wording mattered when it came to the rate of unethical behavior in which people might engage.  Specifically, they examined whether people might cheat to win $5. They asked subjects to think of number between one and ten; they could win $5 if their number was even.  Much prior research suggests that people are much more likely to think of an odd number.  Therefore, a high rate of even numbers would indicate that quite a few folks were likely to be cheating.  Now, here's the interesting twist.  They broke the subjects into two experimental conditions.  One group was told that they were playing a game that "tests how common 'cheating' is on college campuses."  The other group did not use the word 'cheating' - instead, it used the word 'cheaters' to describe the purpose of the research. In addition, subjects were being told that it would impossible for the researchers to know if subjects were "cheating" vs. were a "cheater." 

What did Bryan and Adams find?  Approximately 20% of the subjects in the "cheater" group reported an even number.  That's what we would expect if people are being honest (given the tendency of most folks to pick an odd number in prior studies).  Roughly one-half of the folks in the "cheating" group reported an even number!   Therefore, the slight alteration of wording seemed to matter a great deal.   No one wants to be called a cheater!  People worry very much about how they think of themselves, not just how others think of them.  The word "cheater" moves people to honesty! 

CEOs with Military Experience

The Boston Innovation blog reported on a new study today about CEOs with military experience. New research by Efraim Benmelech of Harvard and Carola Frydman of Boston University found that CEOs with military experience tended to engage in less fraudulent behavior than those executives who had never served in the armed forces. The study findings suggest that the leadership training and emphasis on honor and ethics at the military academies may have a lasting impact on personal behavior - years after the individuals depart the military. Does this research suggest that we can teach ethics in places such as business school and thereby increase ethical behavior of business leaders? I'm not sure it is quite that simple. The military inculcates a certain sense of honor and character in many ways, well beyond the classroom. In short, the armed forces employ a holistic approach to building character. If business schools wish to enhance ethical behavior, they must do more than teach a class or two on ethics and morality.

Sign First To Make Ethics Salient

A group of scholars from Harvard, Toronto, and Duke have conducted an interesting study on how we might induce people to be more honest in self-reporting.  The scholars are Harvard's Lisa L. Shu, Francesca Gino, and Max H. Bazerman, the University of Toronto's Nina Mazar, and Duke's Dan Ariely.   People self-report on forms such as tax returns and expense reports.  In those instances, they often sign the form upon completion. Of course, they might have already lied at that point.   The scholars examined whether asking respondents to sign first, before completing the forms, might actually enhance the level of honesty.  Indeed, their experiments show that moving the signature line to the front of the form increases truthfulness.  The researchers argue that the up-front signature might enhance the salience of ethical norms and standards.   Simply doing that alone appears to increase truthful behavior.   Hmm... will the IRS make any changes based on this research?  Can companies take advantage of this research finding to raise adherence to ethical and legal standards? 

Banning Ronald McDonald?

Ronald McDonald made big news this week after a corporate watchdog group encouraged approximately 600 health-care professionals to sign a letter asking McDonald's to stop using Ronald to appeal to children.   When I heard the news, I became a bit  perplexed.   I'm open to hearing a vigorous debate about the issue of the ethics of marketing certain products to children.  That's not my source of surprise.  My real question is this: Is Ronald really relevant to children these days?   Do my kids connect with him at all?  I don't think so.  He doesn't have a bad image.  He just doesn't appear very prominently when it comes to characters with which they resonate.  Put simply, I'm not sure Ronald is the reason my children, or most children in fact, want to go to McDonald's - I'm pretty sure it's the really tasty french fries!   At the end of the day, if we want to get our children to eat healthier, I'm not sure banning Ronald will have a measurable effect.

What's the lesson of this story for other companies?   Many firms have to think about the ethics of marketing to children.  They need to be ready for an increasing amount of challenges to their policies, especially around the issues of health and wellness.  For start-ups and younger firms, executives might even ask:  Do we have a clear policy yet as to what marketing strategies are allowed or not allowed in our firm?   Should we work together with our employees to outline such a policy before we have a public relations mess on our hands?