In keeping with our central focus of ethics and values-based leadership, our very first podcast for the year will discuss ethics in business by discussing concepts and ideas we have never touched on before.

This podcast is driven mainly by this post and the response from readers who claimed that they did not know it was illegal to act this way with McKinsey or BCG. Many claimed they are acting ethically because they either did not know it was illegal or it is legal to do so in their country. This podcast explains how many misunderstand the definition of ethics and why these arguments are wrong.

In this podcast I will:

  1. Define ethics
  2. Explain why ethics is the most formidable advantage to have
  3. Slay three myths about ethics

In defining ethics I will explain why the concept is different from the law and when it should guide your interpretation of what is right and wrong. I will outline five scenarios to explain to you what determines your ethical compass.

In addition, I will answer the following questions:

What does “How I Met Your Mother” teach us about values?
Why does having a clear conscience not exempt you from being a serial killer?
Does a lawful country require more or less ethical citizens?
How does confusing values with self-gratification end up causing problems?
Is there an absolute definition of ethics?
What determines your definition of values?
What is your ethical cost of capital?

This is an important podcast to help you navigate your life.

Enjoy it.

Michael

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Comments

11 responses to Ethical leadership, a deeper dive

  1. If you have to think out of your value system, you have a problem with your value system.

  2. I agree with you on not to have a negative impact is an achievement & greater so if someone is subject to trying circumstances. But Michael that does not bring the change- the positive change necessary to add value to the environment around you. And, I think bringing a positive change sometimes requires out of box thinking which in a sense is thinking out of the current value systems and identifying the bottlenecks……..

  3. Hi J,

    I do not think all M&A firms are unethical. They just have different metrics.

    I think the difference here is that the pay-off is immediate and unambiguous when you hire an M&A firm. Either it works or it did not so if the firm is staffed by jerks you can compare the pain of working with them against the pay-off.

    With consulting you have to trust your advisers since you have no way of immediately assessing the pay-off. It could take years to show through so in the absence of the immediate pay-off clients look to the firm’s integrity.

    That said, I am sure unethical M&A firms will eventually become arrogant and do something from which they cannot escape.

    Good question though – thanks.

    Michael

  4. J

    Hi Michael,

    Thanks for the very interesting podcast. Your points about lowering the consulting firm’s cost of capital in the eyes of potential clients draws an interesting contrast to the investment banking world, where the world’s largest banks have paid billions in fines yet continue to retain a dominant market share.

    Interestingly, this includes M&A advisory which arguably has lower barriers to entry than their banking offerings (no balance sheet required and plenty of independent advisers) and requires a high degree of integrity (due to exposure to inside information, managing conflicting interests and high-level impact of recommendations).

    I wondered whether you agreed that ethics are less important to M&A advisory clients than strategy consulting clients and why you thought that might be the case?

    Best,
    J

  5. You are most welcome Mukesh.

    Note that having a positive impact and having values are loosely the same since you could have great values but not make an impact in the world.

    The point of life is not to make an impact – it is to hopefully be happy and content.

    So, I would say not to worry to much about making a positive impact. Not making a negative impact is an achievement all in itself.

    Michael

  6. This is the highly recommended article mentioned in the podcast:

    http://opinionator.blogs.nytimes.com/2014/06/08/from-china-with-pragmatism/

  7. Now it makes some sense to me, Michael. Thanks a lot for clarifying.

    Regards, Mukesh

  8. Hi Mukesh,

    Ha, now I understand what you are saying.

    In that case, POSITIVE impact should govern your decisions and positive impact is very loosely a synonym for values.

    Finally, the social network you have – friends, family, rituals, television etc – will determine what you consider a positive impact.

    I would really stress that you are ultimately a reflection of your social structure / friends. Even you do not do as ridiculous things as your friends, to be their friend implies you both condone it and it is not offensive to you.

    Hope that makes sense.

    Michael

  9. But Michael is not the impact that should ultimately govern your values. I mean if you stand for a value but it’s impact turns out to be negative for everyone around, what’s the point of standing for such a value.
    Let us say, for instance, in the past in India there was a custom called “sati pratha” where women who use to lose their husbands, use to burn themselves alive in the funeral fire of their husbands. They had a belief that doing so give them emancipation. At that time, this was a value that people use to stand for.
    And now, if someone would not have broken down that mindset of a wrong value, probably we might still be having instances of such a practice.
    I really am confused Michael what is more important- is it the ultimate impact of a decision that is more important or staying steadfast on your values.

  10. Mukesh,

    Is that not the point of the entire podcast? It is relative.

    The point about a Harvard degree is misunderstood in two ways.

    First, impact and values are very different. You talk about impact but you can have enormous impact and still be unethical. In fact, impact is a completely separate point not in least covered in this podcast. So if you want to discuss impact and so on, that is great but it is a separate discussion and this podcast is about ethics and values.

    When I say glitzy jewellery it is because many graduates of many schools use the name of the school as signal of their intellect but do not develop their demonstrated competencies. A lot of graduates from great schools end up disappointed after obtaining their degrees because they assumed the degree alone with change things. It does to some extent but never as much as anticipated.

    Second, lots of people accumulate technical skills and accolades that allow them to hide their ethical flaws. They do so knowing that having these technical skills allows them to move ahead versus investing in the softer skills.

    I am using Harvard as an example here. In no way am I implying the graduates are less ethical. In fact, my own observation of our client pool and my long time in consulting as a partner would indicate quite the opposite. Harvard graduates, on average, tend to be more ethical of the pool with whom we have personally interacted.

    Michael

  11. I don’t think harvard education is a glitzy jewelry- For a person like me and where I come from getting Harvard education is THE THING that can push you to a level where you have the potential to really impact your environment in a great way. Values may not mean the same for all the people- it may vary based on the perspectives, personal circumstances and may be many other factors. What do you think about that, Michael?

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