You’re a new joiner to ABC Corp and diligently read the Code of Conduct as you wait for IT to finish setting up your laptop (even though they’ve had three months to prepare). You get to the page with the obligatory “stop” image (palm up, stop sign, something depressingly Shutterstock). The text reads, “If unsure, stop and think, and ask yourself…”. You’re then presented with a list of steps in the “ethical decision-making” framework:
- Is it legal?
- Is it in compliance with our Code?
- Is it in the long-term interests of the organisation?
- How would it look on the front pages?
- What would your friends and family say?
Missteps
You get stuck on step 1. You’re not a lawyer. The person who wrote the Code probably was, but you are definitely not. You’ve watched a few TV shows and had a fight or two with an insurance company but possess the self-awareness to realise that might be insufficient to navigate the complexities of competition law, GDPR, insider trading, and cross-border data transfers.
“Never mind, maybe the other four steps will help,” you think. But the Code is (intentionally) kept brief and doesn’t include many actual scenarios or considerations. Just a list of general prohibitions and confident pronouncements about “our values.” The other steps may help.
Nope. They don’t.
Paying mega-fines for egregious bribery, environmental, money laundering, and other scandals hasn’t harmed ABC Corp. The glossy pictures of wise natives helping bright-eyed indigenous children hold manicured soil with a sappling in cupped hands intimate “we care” but the aggressive growth targets suggest, “we care to a point”.
What about the newspaper test? ABC Corp has that elite PR firm on speed dial. ABC Corp survives most news scandals. It helps that they own a legacy media arm. Occasionally, there’s a slip-up. Like when the former CEO was recorded on an internal Team call decrying “those soap-dodging bean-eaters” opposing a new project described as “a post-apocalyptic murder pit” by one journalist.
Finally, you think of your friends and family. Your best friend is an anarchist – gifted (by forbearing parents) the right to oppose whatever the mainstream sentiment dictates. Your family don’t understand what you do, but they are very proud.
Must try harder
Yes, the steps are exaggerated, and some codes are engaging, helpful, and better structured. And yes, for my sins, I once suggested these frameworks were helpful until I got my head out of the Fortune 500 clouds.
With such simultaneously flawed, rudderless, parameter-free, and conceptual frameworks, we are setting people up to fail.
Some risks are self-evident, no? Raising a six-year-old boy has taught me otherwise.
Risk-based decision-making is a muscle, not innate. It needs training.
As the scientist Herber Simon explained in his autobiography, there is a difference between experienced decision-makers and novices.
“One can train a man so that he has at his disposal a list or repertoire of the possible actions that could be taken under the circumstances…A person who is new at the game does not have immediately at his disposal a set of possible actions to consider but has to construct them on the spot – a time-consuming and difficult mental task.
The decision maker of experience has at his disposal a checklist of things to watch out for before finally accepting a decision. A large part of the difference between the experienced decision maker and the novice in these situations is not any particular intangible like “judgment” or “intuition.” If one could open the lid, so to speak, and see what was in the head of the experienced decision-maker, one would find that he had at his disposal repertoires of possible actions; that he had checklists of things to think about before he acted; and that he had mechanisms in his mind to evoke these, and bring these to his conscious attention when the situations for decisions arose.
Most of what we do is to get people ready to act in situations of encounter consists of drilling in these lists into them sufficiently deeply so that they will be evoked quickly at the time of the decision.”
How might that work?
In a brief newsletter, I won’t try and offer an expansive analysis of that extract from Simon’s book, but I might summarise the main steps:
- Repository of actions – ask people to go beyond the organisational confines (i.e., don’t just copy others). Ask a kid about a dilemma if you want to see an example of this. When they get stumped, ask them what their favourite fictional/figures from history might do. Draw inspiration for action widely.
- Checklist of things to consider – facts, then assumptions. Can the latter be tested? What assumptions might be sensible, and which outliers merit keeping in consideration? Get comfortable with your cognitive dissonance (e.g., truth biases).
- Making the process conscious– provide a framework to evidence your thinking, then explain it to others. This may sound cumbersome, but it illuminates before becoming intuitive as time passes.
I appreciate this is NSFW, but my favourite current risk quote is, “The dildo of consequences rarely arrives lubed.” To manage risks better, we must expand the “repository of actions”, arm them with better checklists, and make decision-making a conscious and discussed process. If not, the consequences (for them personally and most non-mega organisations) can be deeply unpleasant.
The really good news is that this is a great way to learn. We learn when we fail and when we don’t think we’re learning. A good risk simulation is just that – a space to fail, make conscious our decision-making methods and learn about consequences without the whiff of “ethics training” lingering.