Question: I am tasked with setting up training on ethics in business for my company. It sounds cynical to say 'why bother,' but the unethical companies we've heard about over the last couple of years probably had mission and values statements and probably had some good people working there and that didn't stop the unethical people. What would?                                            
                                                                                              – Tammy D., HR Manager

Lyn's Answer:  Many leaders like you are stymied about how to restore ethics and character in the workplace. We strongly believe that it is a crucial time for companies to clarify their ethical standards and guidelines, not just for leaders but for everyone. Anyone who is taking a paycheck needs to play a part in confronting their own ethical lapses and others' to restore confidence and re-build our economic infrastructure. Although this is not simple to do, we sum it up in a simple phrase: Code, Character and Conversation.

Every company must have a written code – a statement of values that is clear and inspiring. As you said, Enron had a written code, and integrity was a stated value, but integrity didn't live in the culture and the everyday practices of that organization. Creating a true "culture of character" requires work every day, and it requires every person in the organization. It takes believing that part of our job on this earth is to become better people, and taking responsibility for every family, team, organization, or enterprise we're a part of -- for both the success and the ethics of that enterprise. Andy Fastow made profits for Enron, but without integrity and without respect for shareholders or employees. Sharon Watkins, the whistle-blower there, saw what was happening and was worried; had the culture encouraged her to speak up earlier, thousands of employees and investors might not have been ruined. Sharon Watkins had character, but organizations need to endorse that kind of character in their employees instead of rewarding those who get results without integrity or respect.

Bob's Answer: Frank Chamberlain, a corporate turn-around specialist, said that there is one thing he does when he goes into a troubled company that makes a huge difference – he tells the truth to everyone. Mr. Chamberlain believes that integrity is the real foundation for getting results. If you tell the truth, he says, it will inspire belief, which will inspire trust, which leads to loyalty, then to commitment, and finally to results.

Character, in other words, is good for the bottom line.

Leaders with character create cultures of character. They are role models of Integrity, Respect, and Responsibility. They model the code and treat everyone around them with respect, which helps leaders earn trust, and helps people see themselves as valued. When a leader is rated low on Integrity, comments about a lack of respect are frequent, comments such as, "She does not engender respect and trust in others because she is often condescending, angry, and self-important." Responsible, self-confident leaders keep their promises to employees and customers and are willing to assert themselves and speak their minds, especially when they encounter something ethically questionable. Overconfidence, though, can be a killer for an individual or an organization, so it has to be tempered with humility. At Enron, again, they became overconfident, certain their people were smarter and their company just more competitive than anyone else.

Lyn: To build a truly ethical organization, ethical issues can't be separate from the ordinary business at hand. Regular, ongoing conversation about ethical issues is necessary, from the board room to the mail room.

Just as every decision is considered in light of financial implications, every decision must be considered in light of ethics. The goal is for ethical discussions to be second nature, just like financial ones. 

Bob: Some companies appoint an ethics officer to make sure that happens. Larry Fillmer, former President of Fujitsu Technology Solutions, Inc, spent significant meeting time with his people, grappling with tough ethical issues not just to prevent a crisis, but to ensure that all stakeholders – employees, customers and stockholders – were treated with honesty and respect. I can say confidently that successful companies that have a culture of character work at it.  Your training will be a good step toward the Code, Character and Conversations needed.

© June 2009, Turknett Leadership Group

Turknett Leadership Group is a corporate psychology and management consulting firm that has guided executives from entrepreneurial firms and Fortune 500 companies to successful answers for over two decades. If you have a question about the best way to lead your organization or develop your own skills as a leader, send a confidential e-mail to: Answers@turknett.com. Find additional resources at www.ethicsandleadership.com.