From the Archives...
Presenting E.T.H.I.C.S. for Leaders
(Elevating Trust Has Inspired Customer Satisfaction)
© 2003-2019 Perry Binder
A version of this article first appeared in Professional Speaker magazine.
Reprinted: The Human Resource; ASTD Atlanta Newsletter; Atlanta HR Leadership Forum; Atlanta CPCU Newsletter
Do any of these statements ring familiar?
- In the old days, a deal could be done on a handshake.
- A person's word used to be as good as gold.
- The bottom line has become more important than people.
I recently spoke before a group of HR and insurance professionals about customers losing trust in their industry. As the pressure to produce increases, the industry seems to cut corners. Sadly, company communication is breaking down by ignoring the very backbone of the industry, the loyal clients.
Discussing the topic of ethics before a captive audience is a very delicate process. The presenter must strike the appropriate balance between making the audience comfortable by offering objective information in an energized and thoughtful manner, without excessive preaching about the importance of ethical behavior.
I believe that each of us has a strong moral compass which gets tested every day on the job. As a presenter, if I can provide concrete examples to an audience of how unethical behavior will adversely affect a company, I can then initiate a dialogue of ethical dilemmas in any industry. My goal is to give participants a frame of reference, not to instill ethical beliefs. By providing people with relevant analogies, hopefully they will develop the tools needed to prevent any unethical situations arising in a company setting.
I. The Erosion of Client Confidence
The recent explosion of bad faith lawsuits filed by dissatisfied customers is evidence of an erosion in confidence:
- An insurance company's delay and denial of a homeowner's claim for cleaning up toxic mold caused by a water leak led the client to sue the insurance company.
$6.2 million compensatory damages
$12 million punitive damages
$5 million for mental anguish
$8.9 million in attorney fees!!
- An insurance company's "No settlement stance" led a client to sue his automobile insurance company for bad faith. The client had been in a car accident which led to the death of one motorist, and disabling injuries to another. The company refused to settle for the policy limits of $25,000, in spite of overwhelming evidence of the client's fault in the accident. This led to a jury verdict in excess of $25,000, thus exposing the client to personal liability. The client then turned around and sued the insurance company for bad faith.
The result: $2.6 million in compensatory damages and $145 million in punitive damages (The judge lowered the jury;s award to "only" $1 million in compensatory damages, and $25 million in punitive damages)
If the initial, knee-jerk reaction of a company is to turn its back on a client, all of the trust built over the years with that client is instantly lost. Immediately, an adversarial relationship is created. It is the very nature of confrontational environments which may plant the seeds of unethical behavior.
II. Leaders Need to Build Trust - the Key to Avoiding Ethical Dilemmas
As a lighthearted analogy, I use an Aesop's Fable, where two buddies (insurance salesperson and client) are traveling together in the woods, when a bear rushes out in front of them. On instinct, the salesperson grabs a tree branch and climbs a tree, stranding the client. Ever resourceful, the client feigns death, knowing the bear won't eat dead meat. After the bear sniffs close to the client's ear, it eventually leaves the area. As the salesperson climbs down the tree, he laughingly asks the client: "What did that big bad bear whisper?" The client glares, then offers: "He said, never trust a friend who deserts you in a pinch."
This issue of trust permeates any discussion of company ethics. It is a message which must start at the top, and is a number one priority in all company-customer relationships, as well as leader-team member relationships.
III. Tips on Ethics for Every Leader
1. The role of the leader is to give team members a frame of reference with examples of unethical behavior.
2. Find specific cases of extreme ethical violations in your industry. These examples will generate discussion on how solid communication and trust might have prevented an escalation of unethical behavior.
3. Humor will help you make a larger point.
4. Never put team members on the spot in a group setting. The topic of ethics is so sensitive, that you should not put employees on the defensive.
5. Review with team members your company's Ethics Mission Statement. If the company does not have such a statement, consider constructing one with team members' input.
Leaders must continually educate employees on company ethics. As indicated above, there are no quick-fixes to such an important topic.
Perry Binder, J.D. is a legal studies professor in Georgia State University's Robinson College of Business in Atlanta, Georgia. Professor Binder conducts seminars for large and small companies on a range of topics, including social media ethics, litigation prevention, and sexual harassment/discrimination.