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Ask Dr. EthixBiz_____________________________________________________

“Workplace Romance Heats Up: Should I Be Concerned”

Dear Dr. EthixBiz:

I am the CEO of a small software company that I started six years ago with three other friends. We each own a 25% stake in the company but none of the other three partners have been involved in the management of the company for the past four years. We now have about 120 employees and are expecting to add about ten new positions each month for at least the next year.

Everything is going great but I am concerned about a romance that is obviously intensifying every month between our senior software engineer (who is married) and a brilliant young engineer who joined our firm (and his team) ten months ago. I worry about the possible distraction and impact on performances---and if this overheated relationship ever breaks up, what kind of problems could we have then?

We don’t have any official policy statements about workplace romances and I have mixed feelings in part because I met my own husband twenty-five years ago when he was my boss at my first job out of graduate school. Any ideas Dr. E?


Dear CEO:

While it may be true that some workplace romances (like yours) turned out well in the past---others certainly did not. So forget about your own experience long ago; that was then and this is now.

To the extent that this romance stays outside of the workplace you really have to leave it alone as voluntary activity by consenting adults (whether it offends our personal moral compass or not). But to the extent that this relationship affects---or threatens to seriously affect---your workplace, you need to take precautions.
Here are five comments:

(1) does the actual behavior (actions, communication) in the workplace cross the line in your culture (some variation here among different companies of course) and become an unprofessional distraction or offense? If so, you need to speak with the actors and get them back in line. Keep your focus on actual, observable behavior.

(2) where is there (or could there be) any perceived or actual conflicts of interest? While the romance is positive, could there be favoritism of any kind? If the romance cools or ends could there be retaliation of any kind? What kind of authority does the senior engineer have over his team members (including his romantic interest)? This is where it must be clear to everyone concerned that job assignments, performance evaluations, compensation decisions and the like are handled in an objective way by managers without a conflict of interest. In a small company like yours, you will probably need to take an active role here.

(3) it is troubling that the senior engineer’s marriage appears to be in trouble. Hopefully it doesn’t indicate a deep character flaw—a willingness to break a major promise—that might show up in his work at some point. We don’t know the situation and are not going to get involved or assume anything one way or the other but we do file away this note.

(4) did the company (under your leadership) put undue stress on his marriage and life outside—and perhaps throw him into a tempting situation? People are free and responsible for their own choices, of course, but it is appropriate to be prodded by this situation to think about “work/life balance” in the company.

(5) for the future: this may well be the time to create a simple code of ethics that includes a line or two about maintaining professional behavior on the job. Some more detailed codes require employees to disclose (to their supervisors) any romantic relationships with subordinates.

Remember: Everybody has a right to “Ask Dr. EthixBiz.”
Send your questions and hard cases to ask@ethixbiz.com

TheEthixBizReview____________________________________________________

Firms of Endearment: How World-Class Companies Profit from Passion
and Purpose
by Raj Sisodia, David B. Wolfe, & Jag Sheth (Wharton, 2007).

Raj Sisodia is a professor of marketing at Bentley College; David Wolfe is a marketing and consumer behavior researcher; Jag Sheth is professor of marketing at Emory University. Firms of Endearment has nothing to do with the movie “Terms of Endearment” except the cute title allusion.

Firms of Endearment is a fascinating study of the characteristics and performance of thirty companies the authors believe exemplify a benchmark level of humanistic performance and a stakeholder relationship model in which employees and customers are not just contractually served but loved. These companies include Amazon, Costco, Caterpillar, IKEA, JetBlue, New Balance, Patagonia, Trader Joe’s, Toyota, and Whole Foods. None of the thirty companies are perfect but they all espouse and attempt to practice unusually high standards of respect and care for their various stakeholders.

The authors compare the financial performance of the thirty “FoEs” to that of Jim Collins’s eleven “good to great” companies and report that over a ten year period the FoEs outperformed the GtoGs 1,026 percent to 331 percent over the market. Collins started with economic metrics to determine the good to great companies and then wrote a book about their characteristics (Level Five Leadership, etc.). Sisodia, Wolfe, and Sheth started with qualitative criteria regarding culture, stakeholder relationships, etc., and then asked how these companies performed financially. Interesting!

Individual chapters are devoted to employees, customers, investors, partners, and society as the key stakeholders with lots of examples. One example: Costco pays its employees on average 65 percent more than WalMart and 40 percent more than Sam’s Club employees---and generates significantly more profit per employee than these competitors. Part of the reason is a much lower employee turnover (6% in the first year versus 21 percent at Sam’s and 50% at WalMart); part of it is a more enthusiastic and talented workforce. The lesson: love your employees, take good care of them, and reap the business benefits.

Sisodia, Wolfe, and Sheth argue that FoEs are the harbinger of companies to come not just because they are more successful and profitable but because our society is in a cultural transition toward an “Age of Transcendence.” They believe that aging boomers, for example, are looking for meaning and love and will support businesses where they see these values playing large. I am not at all sure that they are reading the cultural correctly, especially on a global scale. Narcissism, fear, and ignorance are also on the rise in our world.

Nevertheless, Firms of Endearment is another strong argument for the importance of ethical management and leadership---for treating all stakeholders fairly, respectfully, and caringly. Readers can quibble about one company or episode or another but the overall case the authors make seems to me irrefutable.

Next month: The Triple Bottom Line by Andrew Savitz with Karl Weber (John Wiley, 2006)

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Gill's Benchmark Ethics ________________________________________________

Ethics is a Team (Not Solo) Sport
by David W. Gill

“Teams outperform individuals acting alone . . . especially when performance requires multiple skills, judgments, and experiences” (Jon R. Katzenbach & Douglas K. Smith, The Wisdom of Teams, 1993, 1999, p.9).

There are, of course, times when individuals, unleashed from groups, are the source of incredible creativity, productivity, and accomplishment. Part of great leadership is to liberate and empower individual accomplishment.

And part of great leadership is inculcating personal responsibility. Individuals must not make a habit of hiding behind groups or organizations to evade personal responsibility.

But having said that, the companion observation has to be about the importance and potential of teams and teamwork. There are tasks and challenges for which there is no substitute for the wisdom and power of teams. This is certainly true in the business strategy domain but also in major personnel decisions, technology strategy, mergers and acquisitions, and many other areas.

Corporate ethics benefits from a team approach and suffers from individualism. Ethics is a team sport, not a solo sport, if I can use that metaphor. Ethics isn’t golf or marathon running; it’s basketball, soccer, or baseball.

Now ideally, we want five players on each team and a full court for basketball. But the “essence of basketball” still exists when it’s two on two, half court. So too in organizational ethics: some formal, high performance teams (e.g., the Ethics Committee) are desirable for some tasks and occasions. But the team idea needs to be practiced at all levels, on all occasions, even if it is no more than getting on the phone to get some input from one colleague.

Passive Individuals Sitting in Front of Computer Screens

Virtually all of the compliance and ethics programs being sold to today’s companies indoctrinate employees into an individualistic approach to ethics. The creation of the ethics and values program does not involve the practitioners but is imposed from outside; the training itself amounts to little more than an individual sitting down in front of a computer and punching their way through a few scenarios with prefabricated outcomes. “Bingo! You are trained for this year. Hit print and get your certificate.”

Ethical dilemmas and quandaries are often complex. We are muddling our way through to the wisest possible decision. We are walking through grey areas and having to choose the least bad or most good option. It’s not black and white. Resolving ethical conflicts takes tremendous creativity and imagination, seeking win-win solutions that are not apparent on first glance. Multiple perspectives help us see issues more accurately. Multiple brainstorming minds can uncover or invent options unseen by individuals. It is a recipe for ethical weakness for organizations to fall into the individualism trap.

Figure It Out Together

To begin with, the code of ethics (and the organization’s core values) will be vastly improved if the practitioners are involved in writing it. No one knows the ethical challenges and temptations of being a sales representative like the sales representatives, for example. They should be brought together as a team to write or rewrite the guidelines for getting it right in their domain.

And when an important specific challenge comes up on the job, the habit should be to put your head together with a teammate or two to figure out the best way to apply the company guidelines. Figuring out the standards, and figuring out how to apply them in specific cases: these are best viewed as team things.

Train Together

But employees are unlikely to call on a colleague if they have been trained to sit alone in front of a computer when doing ethics.

Company ethics training is something that really should occur primarily in group contexts. Even one annual two-hour ethics and values group training session can contribute significantly to organizational ethical health. At Harris & Associates (Concord CA), company leaders urge all employees to attend one two-hour session per year. Two of the organization’s six core values are discussed each year: what do these concepts mean? How can we live them out? What are our challenges to living out these values? What ethical dilemmas related to these two core values might arise in our company? How could we analyze and resolve these dilemmas? One third presentation, one third small breakout group discussion, one third large group discussion and sharing of takeaway insights.

An online version of the annual company ethics and values training is available late in the year to those who missed out on the face to face, group training, or who wish to review the concepts. But it is definitely Plan B. Plan A is to learn how to work together on our ethics and values.

Carry It Out Together

Ethics is not just about teams “figuring it out” together; it is also about “carrying it out” together. It isn’t enoughfor a team (informal or otherwise) to help figure out what someone should do---and then cut them loose to live or die on their own. The team thing means standing by, supporting, encouraging, checking up, sometimes even accompanying the teammate. Our diversity of perspectives and experiences enriches the moral discernment, “figure it out” process. And our diversity of abilities and strengths empowers the “carry it out” process in ethics.

So forget that Lone Ranger ethics approach. It is just setting up your employees for frustration, struggle, and disappointment. Organizational ethics is a team thing, start to finish.

© 2007 David W. Gill.

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September 2007 Contents

EthixBiz News
Ask Dr. EthixBiz: “My boss thinks ethics is a waste of time . . .”
EthixBiz Review: Purpose: The Starting Point of Great Companies by Nikos Mourkogiannis
Gill’s Benchmark Ethics: From Damage Control to Mission Control in Business Ethics

© 2007 David W. Gill, EthixBiz.com. We encourage the use of these materials in business and educational contexts but please write first for permission: zine@ethixbiz.com

Gill’s EthixBizine Monthly is now launched. EthixBizine is a free e-zine, distributed twelve times per year, for business leaders, managers, students . . . and anyone else interested in promoting more ethical business.

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Forward to your colleagues & others you think might be interested.

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It’s About Excellence:Building Ethically Healthy Organizations by David W. Gill
is scheduled for publication at the beginning of January 2008 by Executive Excellence Publishers (www.eep.com). Visit www.ethixbiz.com for more information, sample chapters, and advance praise from business leaders and business ethics experts who have read the manuscript.

The EthixBiz.com web site has been totally overhauled this summer and would welcome your visit. You may want to bookmark it, add it to your favorites, and send some of your colleagues there for a visit. It is now packed with helpful information, tools, essays, links, and other resources to help you improve the ethical health of your organization. www.ethixbiz.com.

Purpose: The Starting Point of Great Companies
by Nikos Mourkogiannis (New York: Palgrave Macmillan, 2006). xv, 253 pages.

Nikos Mourkogiannis is a business leadership consultant (www.panthealeadership.com) with a distinguished track record for more than thirty years. Purpose represents a kind of distillation of his best insight into leadership and organizational development and success. What Mourkogiannis means by purpose is something like a fundamental driver or aspiration of our human nature (a “call to action” p. 46). He tries to make a clear distinction between purpose, on the one hand, and mission, vision, and values, on the other. And yet “when a company is driven by a Purpose, the vision, mission, and values flow naturally from that purpose” (p. 54). So there is an intimate, organic relationship.

Mourkogiannis identifies four fundamental purposes. First is discovery. Tom Watson, IBM, Sony, Intel, and Virgin are examples of this purpose at work. Second is excellence. Warren Buffet, Berkshire Hathaway, BMW, and Apple are his examples. Third is altruism. Sam Walton (“anything to help the customer”), Wal-Mart, HP, and Nordstrom are his examples. Fourth is heroism. Microsoft, Ford, and Exxon-Mobil are his examples.

This is a terrific book for current and future business leaders to study and ponder. Mourkogiannis is right on target to praise the insight of Collins and Porras in Built to Last about the centrality of “preserving the core” (purpose) in great, enduring companies---and to criticize their view that the content of the purpose matters little (except that it must be more than just making money). His choice of the four great purposes is very insightful. Even after reading his learned insights, however, I still prefer to say that there are two (not four) fundamental purposes embedded in human beings: “creativity/innovation” and “help somebody/fix something.” These track with Mourkogiannis’s discovery and altruism; His excellence and heroism themes are better viewed as subsidiary to creating something (excellently, heroically) or helping others (excellently, heroically). A compelling, effective corporate mission, in my view, “taps into” one or both of these great themes. Challenging and enabling your people to “invent”---and/or “help somebody/fix something”---energizes and brings out their best performance and most meaningful work experience.

Next month: Firms of Endearment: How World-Class Companies Profit from Passion and Purpose
by Raj Sisodia, David B. Wolfe, & Jag Sheth (Wharton, 2007).

From Damage Control to Mission Control in Business Ethics (Printable version)
by David W. Gill

Much of today's business ethics really amounts to little more than "damage control.” It is an approach to ethics focused on containing harms from problems already spinning out of control. It concentrates on the critical messes at the end of processes that have gone awry. It is crisis oriented, reactive, negative, and narrow. Confronted by various moral dilemmas or quandaries (usually getting our attention because of a threat of litigation or a brand-tarnishing scandal) we choose how best to "muddle through" and minimize the negative consequences. Sometimes we don’t get much beyond figuring out who is to blame and who will be the scapegoat in the crisis.

Sounds pretty bad but certainly this kind of "damage control" (better termed ethical “trouble-shooting” and “crisis management”) is an important activity. All organizations need to put systems and processes in place to do this as well as possible and minimize the bleeding in these circumstances.

But if we think of ethics only as a matter of damage control of agonizing quandaries, we will never address the sources of these problems or the conditions which make our organizations susceptible to their cancerous growth. There is a better way, one that is proactive, positive, and holistic.

As an analogy, think about our physical health. Focusing only on treating our accidents and illnesses would be a damage control approach. A better way is to invest our attention in a proactive health-building program of good exercise, nutrition, rest, safety habits and the like.

Or think about an athletic team. Of course great teams have to figure out how to contain the most threatening players and strategic moves of the upcoming opposition. But if they want victory and excellence, they must invest major attention in developing their own plays and strategies so that they don’t just react to the opposition but actually dictate the course of the game.

An example of damage control ethics is sexual harassment training—obligatory in so many organizations today. It is motivated in large part by a fear of lawsuits. If the organization can show (in court) that an alleged harasser went through the training and signed off in agreement with organizational policies on these matters, they are (better) protected from having to pay major damages or suffer a public relations disaster. Unfortunately, this kind of training has to be done; I’m not objecting to it at all.

But what about a proactive effort by leadership to build a culture of respect for one another? If we build a culture of respect and professionalism in our behavior and communication . . . if we can show that our individual and corporate success and excellence are clearly served by such a culture . . . we are much less likely to have problems of sexual harassment and much more likely to have effective teams and working relationships. But how many organizations even think this thought?

Mission-Control Ethics

An organization needs a “code” of some sort, a collection of guidelines (ethical and otherwise) for “how we do the things we do” on our way to success and excellence. An organization needs effective training and communication. And an organization needs effective trouble-shooting and decision-making processes in place. But none of these can serve as the foundation of company ethics and excellence.

The starting point is mission (vision and purpose are closely related concepts and have the same relationship to corporate ethics as does mission). What is the basic, fundamental purpose of our company? Why do we exist? How can we summarize the fundamental product or service we bring---in light of which our customers are willing to part with their money?

When the mission is clear, authentic, and taps into our humanity in a constructive way, it can leverage a will to both ethics and excellence in the organization. The appropriateness and validity of our company’s ethics code and training lie in their relationship to our mission. Do they help us get to where we want to go? Are they in alignment with our mission?

We can recognize a sound ethics the way we recognize a good map. A good map will guide us to our chosen destination (not lead us astray). If we get off track we can study the map and find our way back. We accept a map because "it works for us" and because we know that it has worked for others. What does a good ethical map work "for"? Where does it lead us? The first question in ethics is "what is our ultimate destination or goal?" What is our purpose, our mission, our vision?

The great philosopher Aristotle began his most famous book on ethics by writing, "The good is that at which everything aims." Aristotle considered it essential to begin ethics by asking just what our appropriate aim should be. For Aristotle, the character virtues of justice, wisdom, courage, moderation, friendliness, and so on, are justified because they are conducive to the achievement of life’s purpose. This was the classical, traditional way of thinking about ethics: it’s all about purposes and communities (not just about jail avoidance, etc.).

When I first got behind the wheel of a car as a teenager (on an Oregon back road while on a family vacation) I scared my family to death by the way I steered. The car jerked back and forth left and right. My dad grabbed the wheel and advised "look farther down the road as you drive." I did and soon everyone was breathing more easily. I had thought I should drive by looking at the center line just in front of the car's left front fender, but I needed a longer range perspective to steer us smoothly forward. To drive well we need good peripheral vision and good reactions to immediate crises (deer runs across road, muffler and debris in lane, etc.). But the longer range perspective is basic and essential.

As long as we stick with the damage control approach to ethics, jerking back and forth as we react first to this crisis case, then to that one, we are not going to make any real progress in improving the ethical health of our organizations. First, get the mission straight. Second, build a corporate culture in alignment with that mission, one that empowers us to achieve our mission with excellence. It is on that foundation that an exemplary ethics will be built.

Next month: Ethics is a Team---not Solo---Sport

© 2007 David W. Gill

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