August 16, 2017
As of this morning, six people have resigned from the President’s Manufacturing Advisory Council over the President’s recent responses to the events that unfolded in Charlottesville, Virginia, over the weekend. This is not a political post, but rather one about ethical decisions.
These leaders from different manufacturing sectors all made the conscious choice to step down to honor their values and the values of their companies over politics. But, making such ethical decisions is not easy. Sometimes, it impacts customers and money or even brings personal loss.
Eugene Soltes, writing for the Harvard Business Review ("Why It’s So Hard to Train Someone to Make an Ethical Decision"), describes three barriers to making ethical decisions in the workplace:
- Understanding there is an ethical issue to begin with
- Our need for agreement, which stifles opposing points of view, also known as Group Speak
- Decisions in the workplace that are made too quickly, with little time for thought about long-term consequences
Leaders should model and encourage ethical decision-making and reward those who make ethical decisions. More importantly, those leaders who do not make ethical decisions, and promote ethical decision-making, should not lead. They do their employees and their clients a disservice.
While companies like Enron, Wells Fargo, and Mylan (infamous for EpiPen price gouging) were in the news for unethical business practices, we rarely hear anything about the ethical business decisions company leaders make. While there are lessons to be learned from poor ethical decisions, we can also learn valuable lessons from good ones.
Fast Company put together a list of seven business leaders and their biggest moral dilemmas. Sallie Krawcheck, as an example, had recently been fired as the head of CitiGroup’s wealth management division because she reimbursed clients for financial losses. As the new head of Merrill Lynch’s wealth management division, she quickly found herself in a very similar position. The Stable Value Fund (Walmart being the largest owner of these funds), considered low risk and purchased as part of 401K plans often held by their low-income earners, was suddenly tanking. Krawcheck was faced with two options: Tell the Walmart employees, “Sorry for your loss,” or stabilize the fund with cash to protect the employees’ investments.
For Krawcheck, the decision was easy. “I’d lost my job once for doing this," she says in the article. "Did I want to do it again? ... And the answer is, I did.” If getting fired for valuing clients over profits was the consequence, she was ready to accept it. “I didn’t love the idea of losing my job, but that was less painful to me than thinking about telling the Walmart employees that we had lost money they thought could not be lost.”
Ethical decisions are not for the faint of heart. While they may seem easy and obvious, the consequences are often difficult to deal with. Sometimes they result in revenue loss, and sometimes they result in personal loss — as in Krawcheck’s case.
The leaders who stepped down from the President’s Advisory Council may face negative consequences, such as a loss of influence in Washington or loss of consumers who voted for the President. However, they were willing to take those hits for what they believed to be right. We need more examples of business leaders who make ethical decisions, regardless of the financial and personal costs, because they value humanity.
Anne Converse Willkomm
Director of Graduate Studies