I have been in the work world for just over 20 years. During that time, I noticed what should have been obvious to me right from the start, had I not been naïve and idealistic: Terrible decisions are easy to make when you’re not personally affected by them.
For example, I experienced an office move outside the city that required most employees to commute an hour or longer. They accepted their jobs with the idea that they would be commuting within the same city and suddenly found they were required to commute up to an hour-and-a-half outside the city three days a week. I asked myself: If the decision-makers had to do the same, would this decision have been made? My guess is no.
That led me to what I think is a handy test of whether a business decision is ethical. The leader could ask themselves: If I had to do what this decision will require my employees to do, how would I feel about that? Would it be acceptable to me?
If the answer is “No,” you have your answer on whether the decision is unethical. It’s unethical because you are asking another person to do what you know—if you are being honest with yourself—you would not be willing to do.
Decisions that Are a Matter of Business Survival
There are times when a leader has no choice but to make a decision that will be disastrous for some, such as when the organization is losing so much money that if it doesn’t lay off a portion of its workforce, it will not be able to stay in business. I don’t consider those decisions to be unethical because they are the same decisions a person in their private life must make when in dire financial straits. They must stop receiving services they can no longer afford, for example. Decisions made as a matter of survival are typically not unethical.
Optional Decisions Driven by Greed
Then you have decisions that are made as a matter of greed. For instance, you have the company that had its best year or two ever. The leaders of that organization say it’s time to double down and make even more money. On its own, there is nothing wrong with that; that’s how business and capitalism work.
However, it’s not right if they make promises to investors that they know are unrealistic (maybe because the numbers are based on circumstances, such as the pandemic, which are temporary). They then are forced to lay off numerous individuals and create a much more spartan workplace. They must furiously cut costs, not because of a financial emergency that is a matter of survival, but because of greed.
They decide perhaps to lease substantial office space in an inconvenient location for most employees because they got such a good deal, including tax incentives. One problem: They must ensure a minimum number of employees return to the office every week to receive their tax break. They know (based on their recent outstanding performance) that it is not necessary for most of their employees to be in an office. They require it anyway to keep their tax break. They lower the quality of life for their employees, while not being transparent about why they asked employees to return to the office.
How Transparent Can You Be?
When faced with a decision that will have negative consequences for employees, honesty and transparency can feel highly difficult.
In the case of an unfortunate office move, could the company be honest with employees, and tell them the reason they want them back in the office is so they don’t lose their tax break? Or do they have to couch their decision in terms of the importance of in-person collaboration?
In the long run, the organization’s leaders will gain more with their honesty than they would with the phony rationalizing and excuses.
“Transparent leaders earn more respect from their followers because they know they can trust them. To establish this trust, leaders must be honest and straightforward about their decisions and why they make them,” Wayne Elsey, founder and head coach/CEO, The Funds2Orgs Group, wrote in Forbes.
Acknowledge Mistakes and Show Empathy for Employees
Elsey notes that ethical leaders also take responsibility for their decisions. That means, for example, that ethical leaders would acknowledge they made a mistake offering business performance numbers based on extraordinary circumstances to investors, and that they should never have signed a long-term office space lease at the height of the pandemic, before anyone knew how work world expectations would be transformed by that experience.
They then would show empathy for the negative impact on employees, seeking ways to offset that impact.
Business leaders, like anybody, make mistakes. How ethical you are in the clean-up is essential to consider. You want to do your best to ensure your clean-up doesn’t require employees to do what you, personally, would be unwilling to tolerate.
Do your leadership development courses include discussion about ethical decision-making?
