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Responsible Leadership - How to Make Better Decisions in a More Transparent World
'Globalisation is the widening, deepening and speeding up of world-wide interconnectedness in all aspects of contemporary life… from the cultural to the criminal and from the financial to the spiritual'.
These days all major corporations operate in an age of unprecedented scrutiny in which the decisions they take are of significance to an increasingly wide range of interest groups. For example the decision to out-source or offshore key functions or services, raises strongly positive and negative reactions, simultaneously; internally and externally among a broad cross section of stakeholders including, employees, the media, the unions and financial analysts.
Risk and Reputation
A good reputation is built through the cumulative effect of wise decision making over time in which all stakeholders are appropriately considered. The risks of misjudging or failing to fully engage with the concerns of different stakeholders in decision-making can be costly to reputation.
Additionally your reputation will suffer if your business ethics move slower than the expectations of wider society. As Futurist Patrick Dixon says 'You will be judged not by whether you kept to the rules in 2003, but rather whether what you did then, looks right now'. When a company's ethics are challenged …reputations tremble… shares slide and the default instinct of the media always leans towards suspicion.
Ethically Comprehensible Decisions
This means that your key leaders need to have a 'credible and sometimes incredible' view of the future. Leaders have to make tough decisions, in a world that no longer presents itself in morally transparent terms. Ethics is a process in which we comprehend and take account of values in our decision- making. It comes into play not normally when choosing between right and wrong - but rather when choosing between sets of two rights or two wrongs, where we have competing options.
Leaders have to make their decisions 'ethically comprehensible' to people both inside and outside their organisations. You might disagree with a decision, but at least you can understand the logic by which it was made. So how clear sighted are your leaders in this ethically complex landscape?
Better Ethical Decisions
The eye is a powerful metaphor for making better ethical decisions. Think about integrity - when we look someone in the eye whilst searching for the truth. Consider the 'all seeing eye' of media scrutiny following a decision or the x-ray eyes of auditors and regulator sifting through our activities to ensure that we have been compliant with agreed standards.
IRIS Scanning the Integrity of your Decision Making
IRIS is a thought process that will improve your everyday decision-making by helping you to filter ethical considerations into your thinking. To make better ethical decisions you need to have all stakeholders in your 'line of sight', and bring into 'sharp focus' those most affected by the intensity, duration and impact your decision. So lets scan through the IRIS…
Identify …key stakeholders
- Participants - Who are the key stakeholders?
- Potential - How are they potentially affected?
- Perspectives - What are the competing interpretations and perceptions of the situation?
- Pinpoint - What are the specific issues and concerns associated with the decision?
Reflect ... on the options you have available
- Options - What are the options and associated risks?
- Objections - How might stakeholders respond to an option / what objections might they raise?
- Outcomes - What are the potential (un-)intended consequences of the options available?
- Optimise - Which decision produces the optimal result?
Integrity … check the integrity of your decision options
- Compliant - Is my decision fully compliant?
- Consistent - Is my decision consistent with the core values of the business?
- Candid - Is my decision open and transparent?
- Clear - Is my decision ethically comprehensible to stakeholders?
Scrutiny … think about how your decision will be scrutinised by others
- Discern - What 'message' does my decision convey to those affected?
- Distort - Can the decision be misunderstood or misrepresented?
- Durability - Will the decision withstand scrutiny today…and tomorrow?
- Diminish - Could the decision diminish or damage your reputation?
Why compliance is no longer enough …
The response to the corporate scandals of recent years has been a proliferation of regulation, policy and codes of practice…far less attention has been placed on the character or competence of corporate leadership. In our complex and now interconnected world, responsible ethical decision-making is now a core competence… turning a blind eye to ethics is no longer an option.
The IRIS tool has been developed by TMA's Corporate Responsibility brand - 'Real World Learning' - for details of programmes in Responsible Leadership please email spritchard@tmaworld.com
4 Key Quotes:
- Strategic Focus - 'The main thing …is to keep the main thing …the main thing' - Anon
- Future Focus - 'He that marries the spirit of the age…becomes a widower in the next - Dean Inge in the Spectator
- Ethical Leadership - The ethical leader knows that open and contentious debate is essential for making the best possible decisions'' - Ronald Berenbeim
- Challenging our Priorities - 'We learn geology …the day after the earthquake' Ralph Waldo Emerson
Steven Pritchard - spritchard@tmaworld.com
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