ENRON, SIX DEGREES OF SEPARATION, AND THE REST OF US
The popular movie "Six Degrees of Separation" conjectured that we are all connected within six degrees. If that is true, with its strategic alliances including major Silicon Valley companies, Enron's tentacles reach to within six degrees (or people) of each one of us. That brings the front page headlines right to our doorstep. It also provides an opportunity to think about the ethics of the every day decisions we make as leaders.
The fury generated by the Enron debacle has given rise to a plethora of "quick fixes", most of which are aimed at increased regulation. There's an old proverb: The strong lock is for the clever thief. For a time, the tightened regulations will seem to solve the problem, but after a while, it will backfire. Then what? More and tighter regulations? They say you can't legislate morality. No matter how much we try to regulate behavior, there will always be someone who can "break the lock". (Think about computer viruses)
So how can we solve problems of this sort? The answer is also right at our doorstep. Here are six things you can do.
- CLARIFY ETHICS AND VALUES: YOURS AND YOUR ORGANIZATION'S.
I don't mean the platitudes in the front lobby. Ask yourself: if the results of my decision were on the six o'clock news, could I face my family and friends?
- DISCUSS THE CORE VALUES THAT UNDERLIE YOUR DECISIONS.
Make questioning values discussible and OK. When decisions have far-reaching effects, include the voice of customers and stakeholders. When approaching decisions, consider using a formal decision-making process or tool such as a decision tree or analytic hierarchical process that will force you to consider and weigh various factors.
- TELL A STORY: HIGHLIGHT COMPANY LEGENDS THAT PERSONIFY ITS ETHICS.
Stories are the cultural river of communication. Because they teach rather than preach, they are a powerful way to communicate ethics and values.
- WALK YOUR TALK. DO THE RIGHT THING.
There is a profound difference between doing things right and doing the right thing. "I was only following orders" doesn't relieve us of responsibility for our actions.
- TIE VALUES TO INDIVIDUAL AND DEPARTMENTAL GOALS.
"Making the numbers" at quarter's end is important; however, tying bonuses or other forms of compensation to performance may solve one problem and create another. Emphasizing short-term goals at the expense of effective long-term decision making may create pressure for ethical shortcuts. Consider creating "safety valves" to manage unforseen events and/or link compensation such as bonuses or options to the level of performance rather than all-or-nothing decisions.
- DEVELOP SAFE FEEDBACK MECHANISMS.
In the Enron case, a few people raised warnings, but too little and too late. We all know what happens to whistle blowers. Is there a safe way for employees to communicate ethical concerns?
We are living in a complex world in unprecedented times. Every day we are called upon to make decisions which have consequences beyond our view. Organizations are, too often, compartmentalized by silos and other communication barriers masking cause and effect relationships.
In the long-term, no amount of legislation and regulation can be as effective as the steps outlined above. We are all woven together in complex, interdependent systems, and if the theory holds, connected within six degrees. The problems we see as "out there" are closer to home than we think. The everyday decisions we all make affect the outcome.
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