3 guiding principles for developing ethical leadership qualities

Ethical leadership has erupted as a topic in academia and business. Recent scandals–from Wells Fargo’s account fraud to Facebook-Cambridge Analytica to the Opioid producer probes–highlight the need for effective ethical or moral leadership qualities across domains and industries. And emerging research finds that more ethical organizations are more profitable; they have higher employee productivity and lower turnover, and consumers increasingly value ethical companies.  

So how can you become a more ethical leader? This post will begin by discussing the importance of establishing an ethical business culture by making ethical decisions. There are a lot of different principles and guidelines to help you be an ethical leader and make ethical decisions. We’re going to talk about these different ethical leadership qualities by focusing three questions. Specifically we will cover three questions to ask when making important decisions:

  • If I make this decision, could everyone in a similar situation make the same decision?
  • What is the best reason to make this decision? 
  • What is the best reason to NOT make this decision? OR What is the best alternative decision?

As always, our team of psychologists have combed hundreds of research papers in Psychology, Neuroscience, Cognitive Science, Management, Organizational Behavior, Behavioral Economics, and Applied Ethics to inform our researched backed tips and to help you become a better ethical leader.

ethical and moral leadership

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The importance of ethical and moral leadership qualities:

Many of us think that there aren’t any real “rules” to ethics, or that ethical leadership qualities are only expressions of our personal opinions about what is morally right and wrong. In reality, experimental moral psychology research finds nearly all people tend to endorse a set of core categories. These moral foundations have been shown to be general categories of moral judgments for people throughout the world. The businesswoman in China, the lawyer in Canada, the bus driver in the US, and the tribesmen on un-industrialized islands in Indonesia all have similar ways in which they make moral judgments. 

So if we all have a similar structure for making moral decisions and judgments, why do certain people and businesses have different values and sometimes act unethically? Well, part of the answer is found in what types of ethical cultures we are in.

People become encultured into every group and community they are a part of, such as a classroom culture in college, our office culture at work, or even the culture at our favorite restaurant or bar. And each culture can weigh the different categories of values differently. 

When you’re a leader, you have a unique role in creating and maintaining a culture with those you lead. Your actions and attitudes affect your team-members by clarifying your organization’s values and modeling expected behavior. 

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Developing moral leadership qualities are a critical way to generate influence and cohesion for the group, and a lack of ethical leadership qualities can cause major issues. These are the skills valued by politicians, social reformers and even dictators. When there is a lack of ethical leadership, then groups are more likely to push the limits and skirt rules.

Think of it this way, how do major corporate or political corruption scandals get so big? Why didn’t someone speak up before it got so bad? The answer is found in the structures and organization of the group. One analysis of several different scandals examined common problems in such cases. Their main suggestion for preventing it: ethical leadership qualities. 

So how do you practice moral leadership qualities to create an ethical culture? We’re going to focus on ethical and strategic decision making as a first step to adding ethical leadership qualities to your leadership skill-set.


How to make moral decisions

When making a decision there are a lot of variables to consider, which requires a lot of brain power. So how do we start to make decisions in general, and then make ethical decisions? 

We’re going to discuss three key questions or framings to ask yourself when thinking about ethical decision making. 

The big questions to ask are: 

  1. If I make this decision, could everyone in a similar situation make the same decision?
  2. What is the best reason to make this decision? 
  3. What is the best reason to NOT make this decision? OR What is the best alternative decision?
universality and morality in decision making

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Question 1: Could everyone in a similar situation make the same decision?

You cannot control the decisions of others, but your decision or action may set a precedent that others follow. That is, your actions are likely to influence the culture within your organization (and possibly even other organizations) by setting norms.

If that precedent creates a major problem, then it is one that you should think about changing. This focuses on how your decisions relate to the rest of the community you’re in as well as your ability to make similar decisions in the future. 

When you think of whether others could make the same decision, you should be asking yourself things like: 

  • Would a leader in another organization (maybe with different values, but the same overall goal) make this decision? This type of thinking helps you understand what your decisions look like to others and how sustainable your decisions are.
  • If this decision scaled, that is, if everyone had this dilemma and decided the same course of action as you, would everything be okay? For example, would organizations still work? would the market crash? would there be a financial issue? Would the industry or many firms lose consumer trust? 

This framework comes from Kantian ethics in philosophy. One of the most simple examples is lying. If you tell a little, white lie every now and then, then you get some marginal gain without causing catastrophic consequences. Seems obvious enough, but think about if everyone lied all the time? Then we’d never be able to trust people and our ability to do things in a social setting would be harmed. 

Another way to think about this is dating apps or websites. You are supposed to “like” or “swipe right” on profiles you are interested in. But what if you “liked” every profile? While many people say this increases the amount of matches you get, it also creates false positives. You don’t get matches of people you’ve liked, you still have to decide. Now think about what happens if everyone on the app liked every profile they came across? Then the false-match rate would increase. Most matches wouldn’t be quality or lead to a date, and most people would likely quit the dating site! 

Considering how a decision can be okay if one person makes it, but if everyone made it there might be problems. While these situations seem like far-fetched consequences, thinking through them can actually help inform you in a lot of ways. Two of them: 

  • Think through and predict consequences– this helps you practice thinking through different consequences and allow you to increase your preparedness and ability to predict probable consequences
  • Think about how decisions scale– this helps you understand how one decision affects your next decision. Research has shown that when you make one decision that slightly breaks the rules, increases your likelihood of making a decision that breaks the rules even more next time. These can scale up and compound to the point where you are making decisions that do not consider rules or values. The research on this has come from analysis of those corporate crime and corruption schemes we talked about earlier.


Question 2: What is the BEST reason to make this decision?

For most people, this seems really simple or is something that is already part of your decision making process. The research, however, indicates that you are probably not able to do this as fast or as easily as you think!

Jon Haidt and colleagues have found that people often experience what they term “moral dumbfounding.” Moral dumbfounding is when you make a moral decision fast and you are sure you’re making the right choice. But when pressed for reasons, you come up with reasons that may not be relevant to the situation or go against something you stated as important before you made the decision.

Conversely, if you take a lot of time to pour over evidence and consider things deeply and finally come to a decision, you may experience cognitive overload, or choice overload, when your brain is unable to process and use great deals of information at a time. This strains your working memory and prevents you from thinking through the whole process. 

When you ask the question: “what is the best reason to make this decision?” you are doing two things:

  1. You are slowing your brain and reasoning process down to be able to think through a decision (and prevent moral dumbfounding). Further you are isolating one important feature to search for (which helps reduce cognitive overload on your working memory).
  2. This process helps you remain focused on the task at hand and allows you to create one thought out, well considered, rational reason for something.

For example, some of the best reasons might be: 

  • This strategy engages disadvantaged populations
  • This strategy has the most appeal to diverse populations
  • This strategy emphasizes a contemporary event that past do not
  • This strategy puts focus on how we differentiate ourselves from a competitor
  • This strategy is the least risky in terms of profit losses
  • This strategy has the highest potential for profit maximization

The key aspect here is that you are explicit about how this reason connects to your explicit goals as a group/company or what is the major concern for the decision you are faced with. 

For example, imagine you are choosing which route to take on the way home from work. You could take the highway or you could take the streets. If you take the streets it will take you 45 minutes to get home no matter what is going on. You will go by the park, one of the branches for your bank, an organic grocery store.

Going by the highway will take you between 30 to 60 minutes; this is variable because of traffic congestion at rush-hour. Most of the time, you can get home just under 40 minutes, but there are exits closest to work and home. Each day, you face the decision to take the highway or the city streets.

What makes you choose one or the other each day? Well, if you need to go to the bank, then it makes sense to take the streets. If you’re in a rush, then taking the highway gives you the best chance to get home quickly. Each of these considerations are important in making your daily decision. These considerations affect what the BEST reason to make a choice. 

Our decisions, however, are not always as simple as we just described. Often, there are multiple reasons to choose one route over the other. But when you attempt to identify the most important or most relevant factor to your decision, it helps you expedite your decision. When you look for the best reason, you focus your attention on one thing that directly translates to your being able to decide.

assessment of alternate decisions

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Question 3: What is the best reason to NOT make this decision? OR what is the best alternative decision?

This might seem silly to do, but doing something like this is one of the most important leadership qualities you can develop. Questioning decisions and thinking critically about reasons not to do something are incredibly important. Analytic research has shown that situations and organizations that do not foster this type of questioning create situations for major oversights, GroupThink, and is the breeding ground for organizational corruption and crime. 

This may sound fatalistic, but research has shown that simply asking this question often can help your organization stay on the right track. When you ask this question be sure to:

  1. a) force yourself to take a different perspective, 
  2. b) consider the strongest objection to your decision, 
  3. c) make sure you weigh options

Be sure to take alternative perspectives. Perspective taking is one of the most important leadership qualities by itself, but is especially important in decision making. This can help you prevent GroupThink, which can lead to bad decision making or even corruption.

It allows you to consider the views of others and think about what their desires or values are in a given scenario. Additionally, it can help you think about how you are going to generate buy-in from others that may be on the fence or against your position. 

Considering the strongest objection is a true debater and negotiator skill. This shows that you are considering another argument/position and have done the work to think about why yours is comparatively better. It also makes people who are not in agreement with you more likely to listen to your rationale when you show that you’ve given their idea some thought too. 

Weighing options carefully and properly is key to making informed decisions. When you identify the two best options, you are now limiting your decision. This also can help you reduce cognitive overload by focusing down two key aspects. Similarly, it helps you identify where the tension is between two possible options, so you can speak to what critical change or most important reason to make the opposite decision.

considering strong objections

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Recap of 3 guiding principles for developing ethical leadership qualities

We’ve talked about ethical decision making one of the most valuable ethical leadership qualities. We’ve talked about why ethical leadership qualities are important in general and why you might want to consider developing it as part of your repertoire of leadership qualities. We have also identified key questions to ask yourself when making decisions: 

  • If I make this decision, could everyone in a similar situation make the same decision?
  • What is the best reason to make this decision? 
  • What is the best reason to NOT make this decision? OR What is the best alternative decision?

These questions help you think about the ethical implications of a decision, make better decisions in general by not stressing your brain or letting it be too lazy, and considering alternative courses of action. These are easy, simple questions that can drastically change your ability to make ethical decisions and, consequently, make a fast improvement to your leadership qualities.