Ethical Leadership

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We've seen some high profile ethical failures in the press in recent years. It will be hard to forget the devastation caused by accounting fraud at the investment company run by Bernard Madoff, or the earlier frauds at Enron and Worldcom. People have also raised ethical questions over the welfare of some organizations' staff and suppliers.

This highlights the extent to which it can be difficult for leaders to determine what's right and wrong. Some make the wrong choices ? and end up in the news or in the courts.

What we rarely see, however, are stories about the numerous companies that are managed by ethical leaders. While standards seem to keep falling in some corporations, other leaders "raise the bar" and inspire their teams to do the same. These leaders do the right thing, at the right time, for the right reasons. They put their ethics before the bottom line ? and, as a result, they have dedicated teams that would do almost anything for them.

So how do they do this? And how can you do it as well? We'll show you how to define your own ethical standards ? and start putting those standards into practice.

Define Your Organization's Values

To lead your team with character and integrity, you must set an example. You're the leader, remember? Your team looks to you. To begin, you must know your own values as well as your organization's values.

For example, the global technology giant 3M is well known for its company values. Why? Because the entire team ? from top executives all the way down to the mailroom ? live and breathe the principles of honesty and integrity every day. 3M communicates clearly that it wants its staff to do things like keep promises, have personal accountability, and respect others in the workforce. Every leader in the company knows this, so they work by these rules. And as a result, everyone else follows.

Hopefully, your company has clear rules about how it wants team members to act. As a leader, it's up to you to know these rules and codes of conduct ? and to make sure you enforce them. (Our in-depth article Why the Rules are There Add to My Personal Learning Plan can help you with this.)

Your personal values Add to My Personal Learning Plan are also important. If the company's written rules don't say that you must be fair to everyone, but this value is important to you ? then, of course, you're going to be fair.

Good leaders follow their personal values as well as organizational values Add to My Personal Learning Plan.

Ask yourself these questions:

What standards of behavior are really important to my company?
What specific values do I admire in certain leaders? Do I identify with those values?
Would I still live by those values, even if they put me at a competitive disadvantage?
Set the Tone

Now that you know your company's core values, you can begin to set the tone and create the right environment for your team and your organization. Again, leading by example Add to My Personal Learning Plan is the best way to do this.

It's what you do, not what you say, that demonstrates to your team what you care about. So, if your company values honesty above all else, then make sure you demonstrate that by being honest with everyone around you. If your company values free speech, then make sure you allow your team to communicate their ideas openly.

Next, establish consequences for team members who don't follow corporate values. If you allow someone to come in late continuously without making up the hours, that won't set a good example for the rest of the team.

You need good consequences as well. Set up some kind of reward system for team members who consistently act according to the company values.

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