If you’ve read the news lately, you’ve undoubtedly come across details of the recent Volkswagen scandal. Volkswagen leaders admitted that, for the past six years, they had been cheating and deceiving regulators, dealers, and consumers. By equipping 11 million of their diesel engine cars with special software, they effectively falsified the cars’ levels of emissions and enabled them to pass the strict emissions standards set by regulators. In the United States alone, regulators stated the company had deliberately programmed some 500,000 vehicles to emit lower levels of harmful gases during official tests than they did on the roads. Purportedly, this is huge fraud.
It’s hard to believe that so many people, both at Volkswagen and at the company manufacturing the engines, were unaware of the cheating. Martin Winterkorn, Volkswagen’s CEO, has now resigned, expressing both shock and a total lack of knowledge about the cheating.
Winterkorn’s stated vision and goal was to overtake Toyota and GM in selling the most cars. That vision became a reality in 2015, with Volkswagen tripling its profits. It appears that their number one value was growth, outranking even honesty and integrity in importance.
Organizations don’t have values and ethics; organizations and their cultures are shaped by the values and ethics of their leaders. Whether those leaders make ethical or unethical decisions, those decisions and resulting actions send a powerful message throughout the organization. As a leader, it is your responsibility to role model ethical decision-making in order to promote a culture that has a strong foundation of honesty and integrity to support long-term growth.
Here are 11 tips to help leaders make better ethical decisions, especially when the right decision seems difficult to make.
Don’t practice either-or strategies with your values. You can’t say, “Either we’re going to grow and sell more cars or we’re going to be compliant with emissions requirements.” Likewise, it’s not a good decision or long-term strategy to say, “I don’t care if employees are happy as long as our customers are happy.” If they are truly the values you live by and the values with which you govern your organizational decisions, they need to apply to all aspects involved.
Reward employees for speaking up and doing the right thing: Employees need to feel empowered with the knowledge that their leaders want them to tell the truth and do the right thing, even during difficult circumstances. Leaders are better able to make sound decisions when they know the truth.
Generate options: Determine the best solution, and then develop a second or third option in case the first option doesn’t work out. People operating under the belief that they only have one option often times end up making a bad decision, knowing as they make the decision that there is a high possibility for error or problems.
Perform a pro-con or cost benefit analysis: Lay out a range of options and determine the pros and cons of each possible decision and outcome. I believe if the leadership team at Volkswagen had utilized this one tip in 2009, the outcome today would be very different.
Acknowledge your bias: Anytime we’re involved in the decision-making process, there is a good chance that we are biased. Bias helps us feel emotion and to see patterns or outcomes that we want or don’t want to see. This is like the person in their 50’s who gets a divorce (based on his youth’s bias) so he can rekindle a high school or college romance…only to discover that the person he knew 30 years ago has changed.
Get feedback from a nonbiased third party: If you‘ve ever watched Shark Tank, the television show where budding entrepreneurs pitch their great business ideas to a group of the world’s most successful business owners, you’ve seen this point in action. People who don’t have the same vested interest in the decision have a better ability to appraise the decision through a lens that isn’t distorted with biased emotions or past experiences.
Publicly debate the decision: If you want to test the soundness of your decision, engage in debate with people who will be impacted by the decision, or people who are opposed to your decision. The debate is either going to give you more confidence to move forward or it will create the need to make changes to your decision, or develop another option entirely.
Imagine the decision publicized: Imagine that the soundness of your decision is going to be printed on the front page of your local newspaper or written about in an internet blog. Will others reading about your decision consider it a sound one that will stand the test of time?
Determine the right thing to do: Standing behind a decision that everyone agrees with is easy to do. Standing behind a decision that everyone opposes or is fearful of, is what great leaders live for. When it comes to doing the right thing, honesty and full disclosure will seldom be the wrong call. John Wooden, the legendary basketball Coach at UCLA said it best. “In life, there is a choice you need to make in everything you do…so keep in mind that in the end the choices you make, make you!”
Make the decision: Many leaders get themselves in trouble by taking too long to make a decision, or not making a decision at all. In other words, many leaders hope the problem will go away on its own. As Theodore Roosevelt said, “In any moment of decision, the best thing to do is the right thing. The worst thing you can do is nothing.”
Have a contingency plan: The best decisions, even ones where you followed the above 10 points, sometimes go wrong. But it will not be fatal if you have a contingency plan and alternate options to put into action.
What are the leadership values that guide your organizational decisions? You have a choice, and what you choose to value will ultimately determine your leadership legacy. Most leaders will tell you that they value their people, their customers, growth, and results. One leader we worked with once told us he valued not being sued. In Volkswagen’s case, I imagine some of their leaders right about now might highly value not going to jail. Your people, customers, growth, and results are all important values. But, without honesty and integrity, you are designing a long-term strategy built on quicksand.