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The Ethical Leader PARM


The Ethical Leader PARM John Lasky * Practices that Build Culture Selecting the right people Orienting them to your organization strategy and culture ... – PowerPoint PPT presentation

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Title: The Ethical Leader PARM

The Ethical Leader PARM
  • John Lasky

  • Today
  • Workplace ethics is much more than a belief
    it is a set of things to do
  • The belief part is critically important
  • But knowing the importance of actions is not
  • Actions speak louder than words
  • First, lets tell a story
  • Second, lets review the traps
  • Disconnected Leader
  • Compromised Leader
  • Non-trusted Leader
  • Disliked Leader
  • Oblivious Leader
  • Third, lets talk about actions

A Tale of Two Companies
Ford Motor Company
  • Pinto edict not an ounce over 2,000 lbs, and not
    a cent over 2,000
  • Ford was aware of a defect
  • In test crashes over 25 miles per hour, the gas
    tank always ruptured
  • But, no fix because (Mark Dowie. "Pinto
    Madness. 1977)
  • Ford owned the patent on a much safer gas tank,
  • Ford had already invested in the assembly line
  • Decision make the Pinto anyway, "even though.
  • Ford delayed the fix for eight years its
    internal 'cost-benefit analysis, which places a
    dollar value on human life, said it wasn't
    profitable to make the changes sooner."
  • Note Lee Iacocca "Safety doesn't sell"

Ford Motor Company
  • Ford Pinto crashes estimated 500 deaths
  • Maybe as many as 900
  • Did anyone go to Iacocca and tell him?
  • "Hell no," replied an engineer who worked on the
  • "That person would have been fired. Safety wasn't
    a popular subject around Ford in those days.
    Whenever a problem was raised that meant a delay
    on the Pinto, Lee would chomp on his cigar, look
    out the window and say 'Read the product
    objectives and get back to work.'"
  • Moral Ford leadership focused on its internal
    requirements and lost sight of those of its
    customers or was it worse?

Johnson Johnson
  • Tylenol Scare in 1982
  • Seven users died in the Chicago area
  • Extra Strength Tylenol deliberately contaminated
    with cyanide
  • Within a week, company pulled back 31 million
  • The crime was never solved
  • Tylenol sales collapsed
  • McNeil Consumer Healthcare (JJ)
  • Invented first inherently tamper-proof capsule
    Tylenol Gelcaps
  • Recaptured 92 of capsule sales lost after the
    cyanide incident
  • Result revolutionized the industry, and beyond
  • Today
  • Tylenol controls 35 of pain killer market in
    North America
  • On the ethics horizon
  • Acetaminophen overdose is responsible for more ER
    visits than any other medicine on the market

Lets Compare Ford and JJ
  • Which company had the cultural issue?
  • What was that issue?
  • How did that company get to such a position?

Lets Compare Ford and JJ
  • Which company had the cultural issue?
  • Ford the ethical problem existed throughout the
  • What was that issue?
  • Pressure scheduling, financial/business
    objectives and survival
  • Examine top leadership the mirror effect
  • How did Ford get to such a position?
  • Devaluation of the ethical compass

  • a. The Disconnected Leader Lost Touch

a. The Disconnected Leader Lost Touch Recent
DDI study What are employees needs?
The Workplace Disconnect Howard, Erker and
Burce. Selection Forecast. DDI. 2007
What do we leave on the table?
  • What do we leave on the table?
  • Engaged employees are
  • 130 more likely to excel at patient focus
  • 63 more likely to excel in communication
  • 26 more likely to maintain a safe work
  • 300 more likely to attract, hire and retain top
  • 70 more likely to reduce operational costs
  • (DDI, 2008 Driving Business Results)
  • Replacing an employee is very expensive
  • For example to replace 1 Nurse costs 50,000
  • At WPAHS, reducing nurse attrition by 1 saves

Dilbert gets it.
  • b. Compromised Leader
  • Cracks under Pressure

b. Compromised Leader Cracks Under Pressure
  • 1 of 8 feels pressure to compromise ethical
  • About 1 of 3 employees observes misconduct at
  • 1 in 3 fears retaliation from report of ethical
  • Managers perceptions about ethical behaviors in
    their organizations are consistently more
    positive than those of lower level employees.
  • Virtually no differences in ethical perceptions
    among employees of government, for-profits and
  • - Ethics Resource Center, Washington, D.C., 2000
  • 43 of employees admitted to having engaged in at
    least one unethical act in the last year, and 75
    observed such an act and did nothing about it.
  • - John Maxwell, Ethics 101, p. 10.

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In fact, the problem may be worse.
  • Survey of U.S. parents regarding teaching our

Adapted from A Lot Easier Said Than Done
Parents Talk About Raising Children in Todays
America, A Report from Public Agenda Farkas/
Johnson/ Duffett/ Wilson/ Vine
  • In a recent Wall Street Journal article,
    Psychology professor Steven Davis
  • Students say cheating in
  • high school is for grades,
  • cheating in college is for a career.
  • Adapted from a presentation prepared by
  • L. Murphy Smith, Texas AM University

  • c. Non-Trusted Leader
  • Immediate Negative Reputation

More Statistics
  • In 2002, in the wake of Enron, Worldcom and
    others, pollster George Barna asked people
    whether they had COMPLETE CONFIDENCE that
    leaders from various occupations would
    consistently make . . . decisions that are
    morally appropriate.
  • Here are the results

c. Non-trusted Leader Immediate Reputation

  • d. Disliked Leader

People We Most Enjoy Being Around
  • Friends
  • Relatives
  • Significant Other
  • Kahneman, D., et al (2004). A Survey for
    Characterizing Daily Life Experience The Day
    Reconstruction Method. Science. 306. 1776-80.

People We Least Enjoy Being Around
  • Third from last Customers
  • Second form last Co-workers
  • Dead last Boss

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  • e. The Oblivious Leader

a. Oblivious Leader Art Imitates Life
Lets Sum Up
  • Questions regarding ethics with
  • Youth
  • Business operations
  • Public perception
  • Question
  • Is unethical behavior inevitable?
  • Answer
  • Its up to you

  • I have now been sucked down the
  • inevitable vortex of becoming my father . . . .
  • Des Spence, General Practitioner, Glasgow.
  • Off the Dial. British Medical Journal . 2008

  • Enough about the difficult ethics landscape
  • Lets talk about what we can do

ethics eth-iks
  • A system of moral principles the ethics of a
  • 2. The rules of conduct recognized in respect to
    a particular class of human actions or a
    particular group, culture, etc. medical ethics
    Christian ethics.
  • 3. Moral principles, as of an individual His
    ethics forbade betrayal of a confidence.
  • 4. (Usually used with a singular verb ) That
    branch of philosophy dealing with values relating
    to human conduct, with respect to the rightness
    and wrongness of certain actions and to the
    goodness and badness of the motives and ends of
    such actions.

  • Not long ago, business people bragged about
    ruthless capitalism.
  • Think about the 1980s, and 1990s
  • Think about the impact on Pittsburgh
  • But today business value creation and trade.
  • Specifically, about creating value for
  • At a minimum stakeholders include
  • Customers, employees, suppliers, communities, and
    well as shareholders or other financiers.
  • Focus patients and employees.

  • Dont miss the boat ethics is NOT about
    religion or rainbows. Nor is ethics a moving
  • Ethics always works at two levels personal and
  • Ethics is about the most important parts of our
    lives, and must be center stageespecially in
    turbulent times.
  • A quick comparison hurricane Andrew
  • Some people looted
  • Others drove to Florida to help

The Role of Ethics and Values
  • Ethics and values give us anchors, stakes in the
  • They serve as stabilizers and shields.
  • They empower and inspire us. They lead to
    everyone pulling in the same direction.
  • In short values and ethics can drive business
  • R. Edward Freeman. Ethical Leadership in
    Turbulent Times. The Darden School. 2002.

  • Its not so important to play so many notes, as
    to mean the ones that you do play.
  • Warren Haynes, guitarist, Allman Brothers Band

Real Problems With Values and Ethics
  • We dont always know our own values
  • The problem of bad faith
  • The problem of self deception
  • Values, ethics and action
  • R. Edward Freeman. Ethical Leadership in
    Turbulent Times. The Darden School. 2002.

The Amoral Leader
  • Focuses on effectiveness.
  • Often focuses on personal power and the position
    of leadership.
  • Is unconcerned about choices of the followers.
  • Values dont count. Ethics dont count. Just get
    the job done.
  • Very high human costs.
  • R. Edward Freeman. Ethical Leadership in
    Turbulent Times. The Darden School. 2002.

The Bottom Line of Ethical Leadership
  • The ethical leader considers all elements at once
    in searching for an outcome that considers the
    values and ethics of the leader, followers, and
    society as a whole.
  • The ethical leader is inclusive, and seeks to
    include others and to minimize us vs. them.
  • The ethical leader tries to get the right things
    done the right way, and fosters an open and
    honest ethics/values conversation in the
  • R. Edward Freeman. Ethical Leadership in
    Turbulent Times. The Darden School. 2002.

The Ethics and Values Conversation
  • Focus on purpose not profits.
  • Relentlessness and consistency.
  • The importance of challenges to values and
  • Make the conversation come alive.
  • Make the ethics and values drive the systems.
  • Make the ethics and values drive innovation and

Dimensions of Executive Ethical Leadership
  • Moral Person Moral Manager
  • (leaders behavior) (directs
    followers behavior)
  • - Traits - Role Modeling
  • honesty, integrity, trust visible ethical
  • - Behaviors - Rewards/Discipline
  • openness, concern for people, holds people
  • personal morality for ethical conduct
  • - Decision-making - Communicating
  • values-based, fair conveys an ethics/values
  • Linda K. Trevino, Ph.D.. Smeal College of
    Business, The Pennsylvania State University. 2005

  • Executive ethical leadership is
  • Much more than traits (e.g., integrity)
  • Think about ENRON
  • Requires great care to create and sustain an
    ethical culture that sends a consistent message
    that is at least as powerful as the bottom line
    drumbeat (via real attention to ethics in
    multiple cultural systems).

  • Lets get more specific

  • 1. Choose the right people

  • Southwest Airlines
  • Culture is the glue that holds Southwest
  • Completely values driven
  • What results?
  • 34 years of profits
  • Highest value/lowest debt
  • Highest retention, but not highest wages
  • Highest performance
  • Highly unionized, but never a strike
  • Indeed, union pilots regularly load/unload
  • Never a layoff
  • During that period, what happened to PanAm, TWA,
    USAir, etc.?

What is SouthWests Secret Sauce?
  • Be meticulous
  • Hire ONLY A players
  • Never compromise on a B or C player
  • Better to leave the position vacant
  • Why?
  • Devote the necessary effort and energy
  • Average of 25 interviews for 1 job opening
  • Hire for Values

Never Slack Off
  • 50 spend less than 30 minutes conferring with
    other interviewers
  • Often less than 10 minutes
  • We devote more time to a single episode of The
    Office or 30 Rock than to deciding who we will
    work with for the next 5 years
  • 24-79 dont know it is unlawful to ask about
    ethnicity, age, marital status, disability
  • DDI, Discover the New Targeted Selection,

Dont Fall Into the Trap
  • How do interviewers prepare for conducting
  • Informal OTJ training 48
  • Instinct 44
  • Attended class with skills practice 27
  • Attended a class 27
  • Read a book 18
  • None 16
  • Online course 7
  • DDI, Are You Failing the Interview, 2009

  • It aint what you dont know that gets you in
    trouble. Its what you know for sure that just
    aint so.
  • Mark Twain

  • 2. Base decisions on values.

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The Proposition
  • Organizations that identify and embrace a set of
    values and bake those values into all actions
    out perform their competitors.
  • Why
  • Leaders cultivate values
  • Values establish acceptable Behaviors
  • Behaviors establish culture
  • Culture demands performance

For Example Healthcare Each Focused on Values
  • Bronson Methodist Hospital
  • Since 2001, highest overall patient satisfaction
  • Baptist Hospital, Inc.
  • Since 1998, 99th ile (Press Ganey) in- and
    out-patient satisfaction in key areas
  • Robert Wood Johnson
  • Market share growth cardiology from 20 to 30,
    surgery 17 to 30, oncology 13-30

How to Foster Ethics at Work
  • Continuously publish your values
  • Emphasize top managements commitment to values.
  • Publish an ethics code and USE it.
  • Establish compliance mechanisms. Involve
    personnel at all levels.
  • Train employees.
  • Measure results live the ethics.

G.Dessler, 2003
How to Foster Ethics at Work
  • Include values assessment in . . .
  • On-boarding
  • Orientation
  • 90-day assessment
  • Annual assessments
  • Identify candidates values during the
    interviewing process

Make Everyone Responsible for Hiring
  • Result
  • New hires will share your values
  • Most effective culture changer
  • Immediate value-add
  • To managers and the organization
  • Enables you to focus on the real issues
  • Good-bye 80-20 rule
  • Retirement tsunami
  • Not just nurses and physicians
  • Baby boom 1946-1962 (boomers turn 64 this
  • What does that mean to your unit? The hospital?
    The patients?

  • We decided that wed be willing
  • to change absolutely everything,
  • except our principles.
  • Chris Galvin, CEO, Motorola

  • 3. Provide constant feedback

Employee Feedback
  • Traditional method
  • Once each year
  • Managers hate it
  • Employees believe it is unfair
  • Frequent surprises
  • In reality it is a legal exercise
  • Better method
  • Quarterly, if not monthly
  • Builds A players helps remove less than A

  • 4. Engage your staff

  • What is the 1 desire of employees?
  • How does that desire relate to ethics?
  • By the way, employees can get the job done.

  • Set of things to do, at a minimum
  • Give employees real voice
  • Not just party planning
  • Unit councils, charged with meaningful tasks
  • Do so in a meaningful, regular manner
  • If not scheduled, it will not happen
  • Examples
  • Project team
  • Patient satisfaction team
  • Solution team (GM, NY ? productivity ?
  • Develop a charter

  • Hospital Case Study
  • FY 08 (July 07) regularly missed budgeted
    volumes resulting from patient flow process
  • Specifically in 4th Q FY07 /1st Q FY 08
  • Diverting over 50 patients a month
  • ED in Code Red over 100 hours a month
  • LOS for Admitted patients in ED gt 11 hours
  • Plan A hire 20 nurses and more support staff
  • 1.1 million
  • Continuation of non-efficient process
  • Plan B Immediate plan of correction
  • Design an optimal patient flow process

  • Results
  • Code Red Reduction/Elimination
  • In 2 months, code red hours decreased to 50 from
  • In 3 months, to 0 (first time in 5 years)
  • LOS for admitted patients in ED
  • July 07 11.48 hours
  • April 08 5.69 hours
  • FY 08 7.18 hours
  • FY 09 6.14 hours

How to Practice Ethical Leadership
  • Model the Way
  • All eyes are on you
  • Garbage in garbage out
  • Inspire a Shared Vision
  • Define the future, align people with that vision,
    and inspire them despite the obstacles
  • Challenge the Process
  • Maintaining the status quo at times very
    important --is a clerical job
  • Enable Others to Act
  • Know the 80-20 rule
  • Encourage the Heart
  • Employees will show up without your guidance
  • Excellence comes from employees giving more than
    their labor
  • Think about employees motivations
  • Kouzes and Posner

Practices that Build Culture
  • Selecting the right people
  • Orienting them to your organization strategy and
  • Developing business literacy that integrates the
    ethics perspective
  • Organizational communication
  • Situational leadership
  • Performance management
  • Training and development
  • Reward systems

Can we teach ethics?
  • To educate a person in mind
  • and not in morals is to educate
  • a menace to society.
  • Teddy Roosevelt

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  • Discussion