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When I talk to people about the factors that go into making ethical decisions, I often get the response that the same factors go into making good management decisions, whether or not ethics are involved. This is true. It is not true that ethical thinking always leads to a better business outcome. If you are ethical but have a lousy product, ethics will not make it sell. But the habits of mind that go into ethical thinking increase your competence as a manager.
Standing in others' shoes
When you think ethically, you are in sympathy and empathy with others. Being in sympathy with others means feeling some of what they feel, while being empathetic means seeing things as others see them. In simple terms, ethics requires you to stand in the shoes of those affected by your actions. The best way to do that is to get to know them, preferably in person. Consider, from a management standpoint, how much harder it is to fire someone face to face. That's because your sympathy and empathy are engaged by their presence.
What ethics requires in terms of standing in the shoes of others is exactly what has become known as "management by walking around." Instead of relying exclusively on what market research says about your customers, it pays to meet them in person. And no matter what human resources says about your employees, it is a good idea to let employees tell you in person what is on their minds. Consultants have made tens of millions of dollars hawking these simple ideas. And these ideas come to no more than standing in the shoes of those affected by your actions – as ethics requires.
Where ethics and management converge
One of many cases that illustrate the ways in which good ethics and good management converge is the story of how Nordstrom Inc. became a retail force of nature. It was Nordstrom's policy on returned merchandise that built the legend. The underlying principle is an ethical principle: "Treat customers making a return just as you treat customers making a purchase."
The idea is to stand in the shoes of your customers. When customers are less fearful of having to return something, they find it easier to make the purchase. There was certainly risk in Nordstrom's strategy, but it worked.
Another example of convergence between good ethics and good management comes from Jan Carlzon, former chief executive officer of SAS Group, the Scandinavian airline holding company.
When Mr. Carlzon got the top job at SAS in 1981, it was on the brink of insolvency and had earned a reputation for poor service. He did not have the money to match the marketing efforts of larger competitors, so he hit on the idea he calls "managing the moments of truth." Whenever an employee directly interacts with a customer, that is a moment of truth. Mr. Carlzon believed that if you manage the moments of truth, advertising – or the lack of it – doesn't matter as much. Mr. Carlzon trained the members of his company to stand in the shoes of its customers, and turned SAS into a legendary success story.
The convergence between ethical decision making and good management should not surprise. People will give more on behalf of a person or company they trust. Customers will be more comfortable buying from a company that treats its customers fairly. Does this mean that good ethics will deliver success? Not really, since ethics is only one factor among many that determine success. But it is definitely one of the factors on the plus side of the balance sheet for success.
Standing in the shoes of others is only one part of ethical thinking, but it is a good habit of mind for all leaders and managers to learn and practise.
Mark Pastin, author of Make an Ethical Difference: Tools for Better Action, is chief executive officer of the Council of Ethical Organizations, a non-profit organization dedicated to promoting ethics in business, government and the professions. He is based in Alexandria, Va.