A balanced diet improves decision making

Just in the same way that one food group won't keep you healthy neither will one news group help you make the best decisions. This is one of the suggestions from the  EdX "Teach-out" course held over the weekend on "Fake news, facts and alternative facts".

The course highlighted a number of logical fallacies and cognitive biases including:
 "group bias"- a bias towards people who think like us
"strawman fallacy"- an oversimplification of the other side's view which is then easier to reject without full understanding
"bandwagon fallacy" - because lots of people believe something then it must be true.
 So, to ensure that we all successfully counter our own biases  and make better decisions, we need to actively seek out different views,opinions and a variety of perspectives as well as being open to challenge and being prepared to change our minds.
While this may seem to only apply in the political arena the recommendations are relevant to the world of business ethics which is simply about decision making too. Taking the time to check out the view of the stakeholders in your organisation and really understanding their perspectives will help build relationships, support for ideas and ensure your decision making is based on the firmest foundations.

Blowing the whistle on the "Barclay's Way".

The best way to deliver a change strategy within an organisation is to get the full support and backing from the CEO and the Board.  The banks and financial services industry generally have been working hard to put strategies in place to change their cultures and conduct to rebuild trust in the sector and their organisations. Barclays had also set on this path with its values of “respect, integrity, service, excellence and stewardship and its “Barclay’s Way”. 

 Page 20 of the “Barclay’s Way” document is about “speaking up and raising concerns”. It states that employees need “courage to challenge actions” and that they need to “act with the highest standards of integrity and honesty in all that they do”. It is likely to be quite confusing for the employees of Barclays to discover that their CEO, Jes Staley, hasn’t complied with the letter or spirit of this policy as he investigated who spoke out about a senior manager, doing extensive damage to the trust of stakeholders (or reinforcing what many still think, “one rule for them another for us”). 

The Board has cut Staley’s variable compensation as punishment and there is now an investigation into the systems, control and culture of the organisation by the regulators. This example surely builds the business case for ethical decision making as the costs are just too high, both personally and organisationally, to just pay lip service to such an important issue . To quote the Barclay’s Way further “sometimes the actions of a few may put our reputation at stake”.  The CEO has proved this is the case. It is a shame that he didn’t also take their "stewardship" value more seriously ie being passionate about leaving things better than he found them”.

Is the drop in CEO credibility due to too much spin?

The 2017 Edelman Trust Barometer revealed that employees are more trusted as spokespeople for a company than the CEO on a range of subjects eg financial performance (38% v 20%), treatment of employees/customers (53% v 17%) etc. "What can CEOs do about this?" was a question asked at a webinar held by the Institute of Business Ethics today. The answer included CEOs acknowledging that spin can be damaging to trust building.  This comment might suggest that CEOs need to re-think the use and role of PR agencies within the communication strategy to stakeholders, investing in long-term openness and truth instead of short-term cover-up and spin perhaps?.

"Others are doing it" is not a reason but an excuse.

One of the recurring issues in engendering ethical (responsible) business decision-making is how to counter “it must be OK- others are doing it”. This is even more difficult in this world of behavioural economics (see “Nudge” written by Thaler and Sunstein) where peer pressure (or “following the herd”) is actively used to encourage a wide range of actions ensuring that decision making for the individual is easier with the perceived endorsement of others.

This herd instinct is a pervasive trend being used not only by the big corporates like Amazon for example “people who bought X also bought Y” but also charities and lobbying groups with their real-time updates eg “Jenny has just donated £10”, “48,345 people have signed the petition”. In the post-truth world there is also the additional issue that because thousands believe a particular (false) news item, this also makes it true.

Business ethics is simply about decision making too and different types of “nudges” can be useful here and tend to be much more individual “would my family and friends be proud of my decision”  “would I mind this decision getting into the press?” Even though these simplified short-cuts might help give guidance, business leaders need also to encourage their teams to seek out a diversity of views (ideally including stakeholders) which challenge thinking and assumptions so that their decisions are soundly based in the real business context on first-hand knowledge and deep and extensive critical thought.

When is a falsehood not a lie?

A rose by any other name still smells as sweet, a lie by any other name still stinks. The way to build trust in business is to be consistently honest, truthful, fair and transparent.  It is even more important in our post-truth world that stakeholders know and can spot the difference between a lie (a false statement with the intention of deceiving) and a genuine mistake.  It is absolutely critical that leaders demonstrate and engender ethical behaviours in their organisations to challenge and counter the growing trend, temptations and sloppiness of communicating falsehoods.  Having organisations that can be really trusted will help them to attract both employees and customers, building the bedrock for future business when the house of lies collapse.

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