Use careful thought and consideration when defining your firm’s value, moral, and ethical framework.
The complexity and pace of change in the current business environment requires that value creation and decision making cannot be centralized. Many firms use the word “innovative” in their mission or vision yet lack the iterative processes, framework, or ecosystems that actually encourage innovation. I’m sure most leaders will agree that they do not have a monopoly on winning ideas. That is why creating an ecosystem that allows ideas to naturally and consistently emerge is vital. Doing so requires developing capabilities for exploring new ideas, experimentation, iteration, comfort with failure, and working with external partners.
I’m always happy to discuss, at length, the execution and implementation of this ecosystem; however, we must first tackle something much more foundational if we are to have any success whatsoever. It is something that has become taboo or passé. What I’m talking about is the role of morality, values, and ethics in business.
Admittedly, the subject is nuanced, and the topic will not be sufficiently covered in this article. It is, however, the underpinning of everything that is successful, or not, within our organizations, even if we’d rather not admit it. The foundation of values, morality, and ethics is what ultimately is embodied in our culture.
Now, we typically link morals to matters of religion and spirituality. Meanwhile, ethics are closely linked to matters pertaining to professional life. In fact, many disciplines or professional organizations have their own code of ethics. I distinctly remember being taught the American Institute for Chemical Engineers Code of Ethics before completing my undergraduate degree in chemical engineering. One definition of religion, that shouldn’t be controversial in any way in your firm, is really just a particular belief system or worldview that an individual holds. Using that definition, everyone is religious in some way, even those who would describe themselves as atheists.
I’d like to argue that all three (values, morals, and ethics) are inseparably linked and foundational to our businesses, culture, and strategy. It is these pillars that allow us to even discuss decentralization and the creation of an innovation ecosystem. To begin, we will have to define the terms to ensure we are on the same intellectual footing. I’d also be remiss if I failed to acknowledge how/why these terms often get conflated with theistic thought. With that, let’s begin.
- Values. I typically define these for our clients as the unwavering principles that are necessary to infuse your culture with purpose. More basically, they are the foundation of a person’s ability to judge between right and wrong. They are a deep-rooted system of beliefs and have intrinsic worth but are not universally accepted. It is a system that allows each individual to determine what should or shouldn’t be. These fundamental beliefs are the barometer that guides a person’s decisions. There are also various levels including individual, firm, and societal values. I strongly encourage all leaders to reflect on their own individual values, but for the purpose of this conversation, let’s focus on the firm. Of course, if the two are not in harmony, then there is a poor fit with your organization which can cause additional challenges.
- Morals. Morality is formed out of our values. Morals are the actual system of beliefs that emerge from a person’s core values. These are specific and context-driven rules that govern a person’s behavior. Since this system of beliefs is tailored to an individual or firm, they are subjective, and this is where we see moral relativism injected into the discussion. Meaning, each firm’s morals may be different relative to any other firm. The bridge to traditional or theistic religion is in the definition of objective morality and universal truths that are predicated upon some form of higher power. Morality, in and of itself, however, is subjective and worth inculcating and discussing in our businesses.
- Ethics. Finally, we have the vehicle that allows us to act out our morality. Ethics are what enact the moral system that we’ve developed. A person, therefore, can be said to be ethical by acting in accordance to one’s morality. Hence why codes of ethics are always discussed as actions such as “perform professional services only in areas of their competence” or “conduct themselves in a fair, honorable, and respectful manner” to borrow once again from AIChE.
Careful thought and consideration should be instituted when defining your own firm’s value, moral, and ethical framework. I may make a more thorough defense of the importance of this framework for your firm at a later date, but to summarize, it is of paramount importance to creating your culture and long-term success. If you accept the premise at the outset of this article, that of a decentralized system and a required innovation ecosystem, then this foundation is the first step. As technology, particularly AI, develops at the momentous pace it is, I would even argue, particularly for larger organizations, that an ethics/values committee be established to keep you accountable and aligned in the “face” of a nameless, faceless machine learning platform.
Phil Keil is director of strategic services at Zweig Group. Contact him at firstname.lastname@example.org.