Culture of Quality - The Elusive Butterfly - Part Four - ETHICS!

ETHICS

When it comes to ethics, you’re either all in or out.

I have been told that I like to “color outside the lines,” but it is strictly black and white regarding ethics. There is no in-between. Anyone who thinks otherwise is not being honest, and honesty happens to be one of the most critical components of ethics. So, there you have it!

Ethics is a strategic imperative and a competitive or marketplace necessity that should be considered by all organizations, regardless of size and whether public or private. Performance Excellence dictates that ethical business practices and stewardship responsibility starts at the top of an organization with its chief executive and governing body. This is clearly outlined in the Baldrige National Quality Program’s Criteria for Performance Excellence.

Senior management is responsible for creating an environment where employees’ decisions, actions, and stakeholder interactions conform to the organization’s moral and professional principles. This means going beyond distributing a code of conduct or considering profits and losses. What’s required is creating an organizational culture that places the highest value on sound governance, transparency, integrity, and social responsibility.

There is a strong connection between quality and ethics. Organizations establish ethics to promote integrity among their employees and ensure they have the trust of their key stakeholders, investors, customers, community, country, and even the world.

Along with the increased scrutiny that comes with the age in which we live, senior leaders are responsible for building trust in how their organization is governed and ensuring legal compliance and ethical behavior. Careful consideration must be given when considering how interested parties may perceive situations. Senior leaders must consider the long-term consequences of their short-term thinking and strategic actions.

Senior leadership must ensure that the organization’s mission and vision are aligned with ethical principles. No matter what type of business or industry, leadership’s behavior will impact the entire organization.

Senior Leadership must communicate and demonstrate the organization’s philosophy about ethics, and they are responsible for being role models for those principles.

Like everything related to the Culture of Quality, it begins with making ethical behavior and the quality of the whole system a core value.

Without a well-established ethics program, leaders and managers may be tempted to only focus on some of the principles of quality and ethics. Wrong approach!

This is not Ethics a la carte! A targeted focus is a detriment to the quality management system and the organization and defeats the purpose of having an ethical approach to delivering quality. Critical ethical attributes include:

Honesty | Integrity | Impartiality | Fairness | Loyalty | Dedication | Responsibility | Accountability | Understanding

 I have witnessed several examples of severe breaches of ethics during my career. I could give you detailed accounts of these instances, but I choose not to. I will say that it has haunted me each time it occurred.

I can tell you that if you witness a severe violation of ethics firsthand, it will probably leave you with your mouth hanging open, and I am not keen on that visual. It’s like, “What were they thinking?” Instead, I will review the most critical points for unethical behavior. Perhaps you have encountered some of them during your career.

Although there are many categories of misconduct, most fall within three broad areas: 1) mistreating employees and other workers, 2) financial misconduct and fraud, and 3) misrepresentation and falsification. Critical unethical attributes include:

Misuse of company time | Abusive behavior | Employee theft | Lying to employees |Lying to leadership | Lying to customers | Violating company Internet Policies | Violating company trade secrets | Data breaches | Taking credit for others’ hard work | Manipulation of numbers | Manipulation of systems | Withholding critical information

Ethics refers to the standards for morally right and wrong conduct. Organizations are devoting more resources to business ethics and with due cause to avoid negative implications.

Ethics drive employee behavior. A strong ethics culture prepares employees to handle ethical issues and maintain integrity. When an organization communicates why ethics is essential, employees will be more likely to apply ethical reasoning.

Honesty and integrity rank high for business leaders. Professionals need to understand the link between business ethics and business success. And although corporate ethics programs have become common, the quality and effectiveness vary.

In this digital age of instant information, it is much easier to identify ethical missteps and immediately publicize them, which can harm an organization’s reputation and brand in minutes. Organizations with questionable ethics may experience a decrease in stock prices and severed business relationships, or both, in a single day, which can adversely affect profitability.

Consider the damaging effect of unethical behavior and how it can affect a celebrity or an athlete and their brand. Millions of dollars in endorsements can be lost in a day. The star becomes an outcast and may never regain popularity, not to mention the lost endorsements and job opportunities. Their phone stops ringing.

Ethics has been used to refer to a system of values or moral principles for a group or profession. Organizations need employees who are dedicated to ethical decision-making. The first step in building an ethical culture is creating an ethics program. A complete ethics program should fully integrate all business functions to maximize the impact. An ethics program should:

1. Define the program mandate
2. Establish the policies and procedures
3. Provide training and communications
4. Reinforce behavioral expectations
5. Oversee allegations of misconduct
6. Mitigate and monitor risk
7. Manage the function of behavior ethics

 Besides establishing formal ethics programs, organizations can create an ethical work environment by hiring the right individuals whose energy matches the organization by demonstrating honesty and integrity.

Bottom line…a well-implemented ethics program can promote moral conduct, cultivate trust, improve profitability, reduce losses, improve customer loyalty, and strengthen branding and sales.

Without ethics in the organizational bones, a quality culture or world-class quality are unattainable dreams.