Nothing breaks trust faster than an ethical issue — especially when it becomes visible.
First, there is probably no crisis more preventable than an ethical lapse. Unlike many company crises — weather-related damage to a warehouse, sudden death of a CEO or other unpredictable events — there is never any excuse for an ethical lapse.
Second, ethical issues come to light. This isn’t about Enron or Madoff-level visibility. It’s customer water cooler visibility. It’s snide comments at an industry trade association meeting. It’s an angry customer talking to another customer.
Don’t for a minute think the fact a manager’s misstep didn’t appear on “NBC Nightly News” means nobody knows about it. You can safely assume lots of people know and more will subsequently learn of it. This can lead to what is known as “death by a thousand cuts” for a business.
Issues of fair play, judgment and transparency define an organization. When a manager abuses an employee or a company tolerates unethical competitive practices, than can be the start of sliding down a slippery slope. Before you claw your way back up that slope you will have spent big dollars on lawyers, public relations experts and other helpers.
Prevention options
One good way to prevent an ethical lapse is by scanning your organization for vulnerabilities that can identify potential ethical issues. Ask these types of questions:
- Are ethical expectations clearly understood at all levels?
- Is the culture compatible with high ethical standards?
- When a problem arises such as a product quality issue, does the company put customer interests ahead of its own?
- Does the company encourage employees to report ethical issues and does it listen when they do that?
- Would the company protect a whistleblower or just give lip service to that?
- Does the company cut corners in pursuit of short-term profits?
Facing the music
At the U.S. Military Academy, there are signs posted on campus that say this: “If you see something, say something.”
Organizations of all types and sizes would be wise to follow the West Point example.
Ultimately, every company must decide whether it is merely compliance-based (letter of the law) or if it also wants to be integrity-based (spirit of the law). The first option is mandatory. The second is optional.
If you believe trust is a competitive tiebreaker, there is much to be said for being integrity-based.
