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Seven questions for examining the ethics of a business decision


Joel Dobbs.GIF

Joel H. Dobbs is the CEO and President of The Compass Talent Management Group LLC (CTMG), a consulting firm that assists organizations with the identification and development of key talent and with designing organizational strategies and structures to maximize their ability to compete in the business worlds of today and tomorrow. He is also an executive coach and serves as Executive in Residence at the University of Alabama at Birmingham School of Business. Joel is also a popular and frequent contributor to the Enterprise CIO Forum where a version of this article was first published.


“Ethics is knowing the difference between what you have a right to do and what is right to do.” – Potter Stewart


One of the things I quickly learned as I advanced in my career was that the higher I climbed, the more complex the decisions. Sometimes the potential financial implications of the decision required my involvement, but frequently the decisions that came to me did so because the issues were not “black and white” but were instead shades of grey.  If you hire good people and delegate responsibly, the easy decisions will get made at lower levels. The ones that come to you will be the ones with many complex issues. In fact, sometimes there is no one “right” decision but a choice between several, each with upside and downside potential and many variables. Some are technical, some financial, and many, if not most, will have at least some ethical components. 


I have compiled a list of seven questions to assess the ethical implications of a business decision.  As a leader, I find that I can both model and teach these to those who work for me and with me. 


1. Have you defined the problem or issue accurately?  All too often our egos prevent us from asking the “dumb” or obvious questions.  We assume that we already understand all of the issues when in fact we really don’t.  Ask plenty of clarifying questions to make sure that you really grasp all of the facts. Play back your understanding to those closest to the issues. Making the right decision about the wrong thing can lead to disaster.


2. Would you view the situation differently if the roles were reversed? Put yourself in the other party’s place and ask how you would feel and react of you were in their place. Would you be angry, defensive or feel cheated?  If so, rethink your position.  Applying the “Golden Rule” can be an effective test for fairness.


3. Could your decision or action harm or damage anyone in any way? In some industries a wrong or negligent decision can literally inflict bodily harm.  In other situations the harm could be financial or reputational. Will any person or any organization be harmed by your decision? When it comes to “grey area” decisions, the law of unintended consequences looms large.


4. Will your decision stand the test of time? How will your decision look a month or a year from now?  We are frequently pressured to make decisions to mitigate an immediate situation without thought to the long-term consequences.  Don’t trade short-term gain for long-term pain.


5. Are you violating your conscience or personal values in any way? This may sound obvious but it can be easy to separate personal values from business priorities in the heat of the moment. Take a minute to examine what you are deciding in light of who you are and what you value.  Never violate your conscience. If you do, your conscience will not let you forget it!


6. How would the decision look as a news headline? This question isn’t about pragmatism, it is about context.  Pragmatism says do what is most expedient. Context is about how the decision could be viewed from various perspectives.  News headlines are frequently sensational and highlight a minor aspect to seduce the reader into reading the full story. In the context of a business decision the question is, “How can this decision be interpreted and in what ways can it be misinterpreted?” Understanding the ways the decision and subsequent actions could be misinterpreted will help you further understand the potential outcomes and to prepare for them in advance.  


7. Would you tell your mother? Those who have worked for me are familiar with what I call the “Momma Test.” The momma test has two parts. First, can you explain the issue clearly enough so that your mother, who we assume isn’t intimately familiar with your business, could easily understand it? If you can’t explain something clearly and concisely to someone unfamiliar with the subject then you really don’t understand it yourself. The second question is: “Would you tell your mother?” If you wouldn’t tell her, then probably you are ashamed of the action you are taking.  That should immediately tell you to stop, rethink, and take another path.


Making tough decisions is one of the most important responsibilities of an IT leader. Most good decisions you make will pass unnoticed, but the bad ones usually do not. We will all make decisions from time to time that don’t work out well. This is to be expected.  We learn from failure and move on. Ethical mistakes, however, are different.  These can damage or destroy your reputation and the reputation of your organization and may harm innocent people. Pausing to carefully assess the ethical consequences of decisions can save a lot of pain later on.


Other guest posts by Joel Dobbs:

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Increasing negatives: With the HSBC drug laundering $670 billion and no one going to jail, the next generation of businesspeople have no reason to fear misbehavior. When you jump from picking pockets, to stealing millions, and now billions, the punishments need to visceral and frightening. Unlike so many other crimes of addiction or desperation, the "deterrence" value of serious punishments to people who enjoy rather privileged lives could reach the elephant or intuition, so that self-serving rationalizations work to keep bankers out of prison. We'd need the same education as 16 year olds get about drunk driving: show examples of corrupt people imprisoned, get it into the intuition. 
Positive: The startup founders I've met who want to go from wealthy to rich almost never mention what they want to do with the money. It's a type of game, with money as the score, that they're playing with each other. And in Silicon Valley, having a cool project seems to count somewhat, if not quite as much as the dollar valuation. If our culture becomes less respectful of how much people haul in, and instead ask what we're doing, if businessmen knew they could lose the respect of their peers by criminal activity even if they're not punished for it, that could build positive-reinforcement for values. Change how we collectively score the game. 
The biggest problem today might be the increasing degree to which we're breaking apart as a society as inequality rises: if people identify their in-group as other MBA's, and not all of society, and mba's are stealing from people whose kids don't go to the same school, then wide-spread business ethics are pretty well doomed.


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