Ethics drive profits

Ethical, or unethical, leadership behaviour is a hot topic in our country. One issue receives relatively little attention – the relationship between the moral high ground and less lofty considerations such as profits, brands and careers.

There is a business case for moral behaviour. Doing the right thing is also the right thing for organisations, leaders and managers, according to pragmatic yardsticks such as business sustainability, corporate earnings and career success.

Put bluntly, unethical business is unprofitable business; at least, across the only time-scale that matters, the long term.

‘The Business Dictionary’ says ethics deals with the fundamental principles of human conduct.

So, unethical behaviour is not limited to theft and fraud. You can be innocent of looting the company and still be unethical.

‘Integrity An Essential Executive Quality’ by Donald G Zauderer spells out 10 characteristics of ethical and unethical executives without once mentioning prosecution for having your hands in the till.

The top two unethical behaviours are being arrogant and self-serving and aggressively promoting your own interests.

Consequences can be severe. Leaders who simply look out for themselves find it difficult to build team spirit and inspire staff.

The danger is they will surround themselves with Yes-men (or women). The quality of decision-making suffers. The key driver in the C-suite is pleasing the boss, rather than doing the best thing for the business.

The result is likely to be underperformance by managers and workers, with impact on the bottom line.

The next five unethical behaviours (practising deception, breaking agreements, dealing unfairly, shifting blame to others and diminishing the dignity of others) all erode trust in a manner that can’t be disguised or excused for long.

South African executives work in a village. Word soon spreads about the management style and behaviour of various personalities. A liar, cheat and bully is soon identified and his (or her) behaviour is quietly communicated across the pool of executive talent.

This makes it tough to find high calibre recruits. Impacts might not be immediate, but in the long run business growth and innovation will be hard to deliver.

Zauderer’s identikit picture of the unethical leader also highlights the tendency to neglect senior staff development while withholding help and support.

An arrogant egotist is unlikely to do much for succession and long-term planning. Consequences can be dire, especially for a brand that’s been around for decades and plans to stay around for a few decades more.

People suffer as well as businesses. Workers might lose jobs. Executives might lose career opportunities.

Stanford University research shows that dirt sticks – even to innocent parties. Researchers found executives at a hiring company are reluctant to recommend candidates for a management job if applicants come from a scandal-hit firm.

Taint from the so-called ‘Enron effect’ has multiple impacts. None good.

It’s best to avoid these problems. Stay clean. Shun dubious operators.

All in all, being good is good for you, your reputation and your business.

by Auguste (Gusti) Coetzer* www.talent-africa.co.za

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