Rob Peters
March 5, 2015

Entering The Age Of The Golden Rule

Our digital and social world is commoditizing products and services in the minds of our prospects and customers. In order to distinguish ourselves, teams, and business offerings requires more than great products or services to stand out from the competition. I propose marketing and selling our products and services through highly moral and ethical behavior. Why? Because the formerly separate worlds of business and personal have fused. Everything is personal. And in personal relationships, it is about responsibility. We have entered a new golden age of the golden rule .  Where trust and reciprocity is expected in not just what you say, but in how you behave.
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Our hyperconnected and transparent world rewards those individuals and business entities that lead with character, competence, good intent, and proactivity with the most precious intangible asset of #RelationshipCapital.

Ethical Leadership is the foundation of Earning Relationship Capital (RC)

Ethical Leadership is leading by intentionally doing what is right. The challenge with practicing ethical leadership is that it is difficult to define “right”. Ethical leadership is composed of two sections:

  • The leader must act and make judgments ethically,
  • Second, the leader must also lead ethically in their actions, perceptions and interactions.

Traditionally, the view of leadership has been that the main goal is to increase production and profits. This traditional view of leadership is fading, as more thought leaders in the 21st century are asserting that leaders also have the responsibility for adhering to open standards of moral and ethical behavior. Good leadership refers not only to competence, but also to ethics and changing people. [i]

“Ethics is knowing the difference between what you have a right to do and what is right to do.” –Potter Stewart

All leadership is responsible for influencing supporters to achieve an action, complete a task, or fulfill a commitment in a specific way. Effective leaders influence method, encourage change in employee’s attitudes and values, bolster followers’ principles, and nurture the adoption of the leaders’ vision by leveraging strategies of empowerment. It is understood that the encouraging aspect of leaders can elevate organizational cultures and employee values to high levels of ethical consideration. Ethical leadership requires ethical leaders. If leaders are principled, they can ensure that principled practices are carried out throughout the organization.

Leaders who are ethical demonstrate a level of integrity that is important for stimulating a sense of leader trustworthiness or relationship capital, which is important for followers to accept the vision of the leader. These are critical and direct components to leading ethically. The character and integrity of the leader provide the basis for personal characteristics that direct a leader’s ethical beliefs, values, and decisions. Individual values and beliefs impact the ethical decisions of leaders. Leaders who are ethical are people-oriented, aware of how their decisions impact others, and use their social power to serve the greater good instead of self-serving interests. In ethical leadership it is important for the leader to consider how his or her decisions impact others.

Motivating followers to put the needs or interests of the group ahead of their own is another quality of ethical leaders. Motivating involves engaging others in an intellectual and emotional or Relationship Capital (RC) commitment between leaders and followers that makes both parties equally responsible in the pursuit of a common goal. These characteristics of ethical leaders are similar to inspirational motivation, which is a style component of transformational leadership. Inspirational motivation “involves inspiring others to work towards the leader’s vision for the group and to be committed to the group”. Likewise, ethical leadership “falls within the relationship of inspiring, stimulating, and visionary leader behaviors that make up transformational and charismatic leadership”. Ethical leaders support followers in gaining a sense of personal competence that allows them to be self-sufficient by encouraging and empowering them.

“The first step in the evolution of ethics is a sense of solidarity with other human beings.” –Albert Schweitzer

servant leadershipCharacteristics of Ethical Business Leaders

Ethical behavior, in its simplest terms, is understanding and doing what is right. The difficulty is in defining “right.” Different individuals, different cultures, and different religions define it in different ways. The general treatment of women and mindsets toward slavery in different cultures during different times in history provide prime examples of how what’s “right” can vary.

Ethical business leaders distinguish themselves by doing that which may be difficult, disliked, and even unprofitable in the

short-term for the creation of long-term vitality and value. They view the world as interconnected and develop end-to-end solutions to address complex problems that appear in the course of business operations. Rather than routinely extending payment terms to a supplier during economic downturns, ethical leaders study the financial strength of the supplier and/or partner, possible negative impacts to the supplier (as well as to the supplier’s employees and its suppliers—and to the company itself) if payment terms are lengthened.

Ethical business leaders also consider other solutions (e.g., sharing best practices with suppliers and partners) that may require an investment but generate more value over the long term. Ethical leaders extend relationship capital trust to their employees, creating an empowering environment necessary to enable employees, suppliers, partners, and even customers to take the required risks to produce breakthrough innovations. For example, the Ritz-Carlton’s leadership team authorizes each employee to spend up to $2,000 to resolve customer issues at his or her own judgment.

What’s more, ethical business leadership is a renewable human resource and, for this reason, represents one of the most efficient and practical assets an organization can put to use.

“Leadership is much more an art, a belief, a condition of the heart, than a set of things to do. The visible signs of artful leadership are expressed, ultimately, in its practice.” –Max Depree

Ethical Leadership in Business Organizations

In organizational communication, ethics in leadership are foundational. In their decision-making, business leaders must consider how it will affect other people, not just how it will benefit them. The greatest leaders display their values and their ethics then evangelize them in their leadership style and activities. These activities consists of articulating comprehensive and truthful information, where there is a personal, professional, ethical, or legal obligation to do so.

When leaders practice ethics, they gain the earn relationship capital trust (respect and admiration) from employees; with the gratification of understanding they are making the most moral choice. If a leader never reveals to others, the “why” in their actions or decisions, this can be viewed as a sign of mistrust.

Unethical actions in the workplace includes anything from taking personal phone calls while at your desk, to lying about the status of a payment, to taking office supplies for your personal use. Most organizations have an ethical code, which is usually a document of rules that tells you what behaviors are acceptable and what are not in the workforce.

“Action indeed is the sole medium of expression for ethics”. –Jane Addam

For your business organization, you might want to let employees know your values or guiding principles at the start. Such sustainable principles can be, collaboration, support, honesty, quality, efficiency, achievement, and commitment.

We have truly entered the golden age of the golden rule of social behavior. Customers, employees, and third-parties have higher expectations for their social relationships. Delivering on the brand promise is table stakes or the price required to be considered in competitive B2B markets. The most successful businesses will be those that outcompete by out-behaving the competition online and off.

Follow Rob Peters @StandardofTrust or check out www.StandardofTrust.com

 

[i] Ethical Leadership – Wikipedia Definition

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Rob is a recognized expert on the assessment, capture, measurement, and utilization of Relationship Capital (RC) to industry. His Global Vision: Changing the rules by delivering high-impact outcomes for a new trust-enabled world.

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  • I appreciated your thoughts and will share this post. Leadership is service and you’ve outlined how to be an ethical leader as well as why. However, following the Golden Rule doesn’t fit your recommendations–it limits them. People don’t need to treated as “you” want to be treated, they need to be treated as “they” want to be treated. The Golden Rule falls short of the target. One cannot only evaluate how they would react, what they would want, or what they wouldn’t–one has to put force the effort, take the time, and invest in the understanding of others needs. As you said, ” In ethical leadership it is important for the leader to consider how his or her decisions impact others.” It’s time we go beyond the limitations of treating others as we want to be treated and treat others as they wish to be treated. Thank you.

    • Randy you make some very valid points and I believe we are essentially in agreement. I referred to the wikipedia definition of the “golden rule” which is described as “reciprocal”, or “two-way”, relationship between one’s self and others that involves both sides equally, and in a mutual fashion. We do need to treat others as they want to be treated, but in reciprocal mutually-beneficial relationships. In the golden age of the golden rule, both parties (i.e; leaders-to-leaders) behave by practicing sustainable golden rule or reciprocal principles of honesty, accountability, responsibility, respect, support, and trustworthiness. We operate in a transparent and hyperconnected world, anything less will not considered ethical by the social tribe.