Posted on September 24, 2014 at 6:00 am
Bernie Madoff. Kenneth Lay. Bob McDonnell. What do these men have in common? Drive and success for starters. They were also rising stars who fell painfully from public grace. It may be impossible to identify the moment when each became a criminal, but each man headed down that path after being faced with an ethical challenge.
Most of us will never be in a position to steal billions of dollars. However, we all face critical moments in which our ethics are challenged. Before that moment, John Pederson believes, we should identify and think through our values and priorities. John founded his business Ethics Talks as a way to train employers to identify their ethical style and coach their employees to adhere to it. I enjoyed sitting down to speak with him one afternoon in the library to talk about his passion, and some questions we should ask ourselves before we are in a sticky ethical situation.
How did you get interested in ethics?
At one point in my career, I gravitated toward non-profits. I was in Waco TX, not working, and decided to throw my hat in the ring when I learned the Better Business Bureau needed a new CEO. I was selected and was there for six years. Later, I moved to central New England and was the CEO of the BBB there for a few more years.
While I had the job, I got a real feel for ethics. I saw companies that did the right thing and others that didn’t. The BBB came across many ethical issues different from compliance and legal issues. Businesses might make a mistake and they then had to decide how to handle their customer to keep them. I got an indoctrination and for 10 years saw rubber meeting the road. I saw good and not so good business decisions, and how people were affected by them. I gave speeches as part of the CEO job and talked about, “How to do the right thing.”
And how did you become interested in teaching it?
After I left the BBB and came home to the Inland Northwest, I worked for the Greater Spokane Valley Chamber of Commerce as the Director of Business Development. I continued giving ethics presentations. I continued to see a need and had a passion for it. I can talk in front of people and have always felt that discussing ethics is always needed. I think you always need to remind people to be in touch with their values and stick to them—whether from a personal or business standpoint.
Who should attend your workshops?
Washington and Idaho insurance agents can get ethics credits they need. Non-profits and the general public would benefit too. The information can apply to many situations. I have workshops coming up in October, November and December (please see Ethics Talk for more information). Four of the programs will be at SCLD.
How do you define business ethics?
In my presentations, I refer to the definition:
“Ethics are the moral principles governing or influencing conduct. Morals are the standards of behavior or principles of right and wrong.”
What is a business? It is made of individuals. They may display their values in a code of conduct or the like. They also need top management ensuring that the values of the company are adhered to by training employees to understand the values. If employees understand the values they will have the tendency to do the right thing when challenged.
Are business ethics and personal ethics different? Can they be in conflict?
It happens. Part of that is ethical style. The Loyola Marymount University has a little 9 question test on ethical style that results in a way that people can code their answers with a “C or J.” If there are more Cs than Js, their ethics are more based on care. More Js have to do with justice.
The Caring Category means that in a situation, you know there are rules but recognize that sometimes there might need to be an exception. Justice Category means, “rules are rules,” and rarely, if ever, are there exceptions.
Those two can be in conflict in personal versus business. If a person has a high C Style, but are in an industry where rules have no exceptions, it can cause lots of stress. There are situations where values are challenged because of regulatory issues in place that can’t be broken—I have found those in banking.
The connotation of business ethics is coming to know what is right and wrong in the marketplace, and doing what is right regarding the effects of products and services and regarding the relationships to stake holders. I consider the stakeholders to include suppliers, customers, employees, competition, government, and the community; some might also say the environment. Basically it is anyone affected by a company decision. Personal ethics is coming to know what is right and wrong and doing what is right in regards to personal stakeholders—family, friends, possibly coworkers, or a group we belong to, like church or rotary. It is anyone in the close circle around us. Of course, if you own your own business, personal and business stakeholders can be the same.
What do you hope people leaving your workshops will take with them?
A reminder that we all have a set of core values, whether we are aware or not, that determine what we say and do, or what we don’t say and don’t do. My approach is to remind people of the importance of knowing their core values and living them out. I ask “What are your values and what are your priorities?”
We might all agree that honesty and integrity are important values, but, for example, where does family or relationships fit into our priorities? When we are faced with a situation that challenges our values, when and where do we hold our line in the sand?
Have common ethical pitfalls changed over time?
Human nature hasn’t changed. Common pitfalls are things like ignorance, compromise, temptation, misjudgment, mismanagement, and unaccountability. All these things by themselves may not lead to something unethical, but could. I believe strong companies talk about these issues and establish a transparent environment–where their employees know what the company is doing, know their own responsibilities, and are accountable. This will reinforce ethical behavior and lead to continued success. Ethics is a culture of wanting to do the right thing—not only employee to the employer or the management to the company, but also the company to the client.
I like the question you pose on your website, Ethics Talks, “Why do good people do dumb things?” How do you answer it?
My contention is that most people get themselves in “ethical sticky wickets” do so because of extenuating circumstances, and just don’t think them through.
For example, someone is hired with a false resume and they lied because they really needed a job to support a family. What if they are doing well down the road, but it becomes known that they got the job based on a lie? What should the company do? Does the time passing matter? Does it matter how well they’re doing, or their family situation?
Is there advice you would offer to student who has just picked business as their major?
Be in touch with your own values. If you’re going into marketplace, ask challenging questions. What are the core values of the business and do they match yours? If they don’t, be careful because you may come into uncomfortable stations. I often say “Listen up, there will be a test. You don’t know when, but sometime in the future you will be faced with an ethical dilemma.”
Do the right thing because it is the right thing to do. Do the right thing right, and do it right now. Always walk your talk.