Why every organisation should be investing in ethics
It's more that just 'boosting trust' and making money
I’ve often critiqued certain claims about the economic value of trust. I do this for a few reasons:
It’s very hard to get at such complex causality (even though causal claims are often made)
This risks reducing something that is deeply important to mere numbers / approximations, which would very likely be some kind of category error
This focuses efforts on the wrong goals, which risk all types of things, including what you can think of as trust hacking (an attempt to enhance trust states in what is often a genuinely manipulative / Machiavellian way, without actually changing the fundamentals)
This is not to suggest that there isn’t some directional truthfulness to the idea that trust is good (and perhaps deeply necessary, up to an extent, but this is where trust and assurance are often conflated) for interactions, that more quality relations and interactions, in our current economy, have ‘positive economic correlates’ etc. I do actually buy into a bunch of this, and believe I can riff reasonably intelligibly in this direction. I just prefer to ground the whole approach in nuance and epistemic humility.
Because of this (the simple dot points), I suggest that organisations and the leaders who make big decisions, step back, stop focusing on trust and take a hard look in the mirror.
When making this suggestion, I describe 5 interdependent ideas that ought to matter to the organisation (especially the board):
Ethics (occurs largely ‘within’ the org, but is deeply relational): The deliberative process of reflecting on our first order (moral) beliefs in our attempt to align our decisions, actions and their likely consequences towards that which is ‘good’ and ‘right’ (often described in relation to our purpose, values and principles).
Trustworthiness (occurs largely ‘within’ the org, but is deeply relational): The qualities (these are sometimes referred to as trust antecedents) a given party exhibits, specifically benevolence (intent to act in the public’s best interest), integrity (acting in alignment to promises, values and principles, regardless of whether the spotlight is on or not) and normative competence (consistently delivering value promises in alignment to relevant expectations i.e. being good and doing good).
Trust (outside of the organisation, but is deeply relational): The willingness one party (a customer let’s say) has to be relationally vulnerable (to an organisation / business) based on positive expectations (the belief the customer has in the organisations trustworthiness, which is also impacted by the customer’s personality, disposition, cultural context, expectation framing and many other factors ).
Reputation (outside of the organisation, but is deeply relational): The opinion that people in general have about the organisation and its effect on the world.
Social license to operate (outside of the organisation, but is deeply relational): The ongoing acceptance of a company or industry's standard business practices and operating procedures by its employees, stakeholders, and the general public.
This is a very simple map. But I’ve found it to be very useful in describing what the organisations cares about (social license) and the ways in which they can most likely (and positively) influence that.
The idea here is to start with questions of value, or what truly matters. This helps the organisation better express a more holistic value system that challenges that paradigm of growth at all costs (which has worked extremely well. Lots of growth, lots of costs i.e. externalities).
This value system informs how the process makes decisions about what is good and right. It enables the to get better at doing ethics.
Being better at doing ethics enhances the organisation’s ability to express benevolence, integrity and normative competence. These become features of the organisation that ‘the market’ can consistently interact with.
These features are very likely (due to the partly deliberative nature of any ‘trust assessment’. I will not attempt to clarify what trust is right now) to enhance trust states. They’re also likely to enhance reputation.
Together, trust and reputation are a good approximation for the ‘general acceptance’ of the organisation’s practices (and may even extend beyond acceptance to preference).
This entire process will likely lead to an organisation that is:
Far more net beneficial (utilitarian approach)
Deeply respecting of people’s rights and freedoms (rights approach)
Truly committed to enhancing equity (justice approach)
Tirelessly working in service of the common good (common good approach), and
Constantly working towards the type of organisation it most aspires to be (virtue approach)
Caring, responsible and relationally enriching
Aren’t these the types of organisations we need?
Think about it.
Actually, this is one of those things that probably doesn’t require all that much deliberation.
The answer is yes. Yes, we need these types of organisations.
And this is why organisations need to be investing (directing genuinely appropriate resources, not just some document or workshop or whatever other token gesture is typically on offer) in ethics.
By investing in ethics, organisations will begin to see what they can’t currently see. They will identify blind spots. They will better understand the nth order effects of their entire operating model. They will be somewhat ‘forced’ to deeply confront inconvenient truths. They will have a chance of knowing, caring for and acting in direct relation to what truly matters.
In this way, they can cultivate their character and become wiser. By becoming wiser, they can overcome foolishness. Through this they might just be able to help us (yes, the royal!) overcome some of the biggest and most existentially concerning issues of our time.
In summary, ethics (and the outcome of better ethics) might well support an organisation in making more money. It might. But I will not make the oversimplified claim that helps continue justifying more growthism. We know that is the ‘wrong model’. But, this shouldn’t be the goal orientation. Investing in ethics is about the process of becoming a biophysically literate and genuinely caring organisation. It’s about getting closer to what true value is. It’s about directing resources to what truly matters.
If you want some support with this process, and want to help a single dad pay for his basic life expenses (hahaha! Did I just say that? Yeah I did!), then please reach out.
With love as always.