Lead productivity and workplace wellbeing - Grow as an ethical leader

Ethical leadership = productivity and workplace wellbeing




In a nutshell, ethical leadership is about simultaneously taking care of productivity and workplace wellbeing and taking personal responsibility for success both in the short and the long term. In short, ethical leadership means good leadership: fair, just and productive. An ethical leader takes and bears responsibility for both results and wellbeing, because together they build sustainable success. In the longer term, ethical leadership also involves instilling responsibility and broad reflection throughout an organisation.

Sometimes you hear people say that there is not enough time or resources to be ethical. But who can afford to be unethical? Who would want to work with a colleague you cannot trust or a boss who is not fair or a subordinate who does not care about results? Ethical leadership should form the core and foundation of all leadership. It is not a simple addition to everyday management or some other extra - it is the essence of leadership.

Why should you improve your ethical leadership skills and how to do it

Why should you improve your ethical leadership skills - download guide

1. How can you evaluate the ethics of leadership?

In a nutshell, evaluating ethical leadership can be approached through three philosophers:

  1.  What does a leader do? This refers to the outcome of actions, the result of leadership. (Mill)
  2.  How does a leader do what a leader does? What values, virtues and vices do a leader’s actions express? (Aristotle)
  3.  Why does a leader do what a leader does? What duties does a leader fulfil, where do leaders get their purpose or motivation? (Kant)


2. How does ethical leadership create productivity and workplace wellbeing?

Sometimes ethical leadership is thought of as moral musing that does not lead to action and have an impact on the company’s bottom line. Ethical leadership can also be tough and demanding. When you are deciding on a general operating model and thinking about whether or not to do something about a problem, an ethical leader takes a stand and intervenes. In the midst of uncertainty, an ethical leader will take responsibility and lead and will not complain about how difficult it is and why no-one else is doing anything.

Research has shown that the high moral standards of an organisation have a positive correlation with its financial performance.

So why do ethical operations mean better performance? Many believe it is because ethical operations communicate a high standard of leadership, which is the primary indicator of superior financial performance. Fair leadership boosts staff motivation and commitment. An ethical operating model also challenges the organisation to redeem its customer value propositions again and again. It grows the organisation from the inside and builds trust among customers.

Studies show that the most talented are interested in organisations that respond to the need for personal meaning and carry their social responsibilities beyond mere profit seeking. In addition, organisations that have the best HR practices, offering things like training and coaching and flexible hours also rank high among successful companies. Moreover, fair leadership boosts staff motivation and commitment.

The International Business Ethics Institute has listed impacts of corporate ethics on success factors and, based on them, companies can be classified as either losers, survivors or forerunners. In the case of losers, a lack of leadership skills leads to deterioration of capital, collapse of innovation and financial loss. The survivors are competitive in their sector because they operate responsibly. The forerunners distinguish themselves from others because of their reliability, quality and workplace wellbeing, which means operating ethically is a competitive advantage.

The outcome of ethical leadership is mutual appreciation and respect and fairness. This creates a positive and innovative atmosphere and enables the company to operate flexibly. Employees will also feel it is their responsibility to focus on development and, if necessary, voluntarily go the extra mile. In other words, the outcome is a positive moral contract.

3. Grow and develop as an ethical leader

The circle of development is the toolbox of an ethical leader. It enables you to systematically reinforce the ethics of your leadership. The circle is based on the foundation of ethical leadership that was presented in the ebook Why should you improve your ethical leadership skills and how to do it,  and the goal is to approach organisational wisdom.

3.1 Improving your own consciousness and powers of deduction

Development as an ethical leader starts with trying to see more and more situations as choices and to understand what value choices and problematic issues are involved.

  • How often do you have to say: “I never thought of that!”?
  • Do official and unofficial workplace roles steer us into acting as we have always acted?
  • Is it clear to the organisation what the underlying big picture is in this situation?

3.2 Building moral imagination

There is always more than one possible solution. An ethical leader must take the trouble to find new alternative solutions and weigh their potential outcomes and the consequences of consequences.

  • How often do I think that there is only one possible solution?
  • Do we look at the consequences of our solutions from the perspective of various people or organisations? And do we think of the consequences of consequences?
  • Can our organisation’s solutions stand the test of time? Will they still feel good ten years from now?

3.3 Sharpening your own values and leadership principles

Consistency is a hallmark of an ethical leader. You must define your inalienable principles and values to be able to act consistently and make consistent choices.

  • Do I act according to my own values - right now, even in small choices and decisions?
  • Is it enough for us as a workplace to act according to laws and regulations?
  • What kind of a world are we building with the work we are doing? What values do we endorse with our actions?

3.4 Strengthening your own integrity

Being principled requires integrity: moral fibre and incorruptibility. When we talk about corruption, we often mean situations where money changes hands. More often we are bribed with emotions, smiles or whinging. We like some people more than we do others. Being principled and incorruptible in the face of emotions is more challenging than refusing large amounts of money.

  • Do I listen to everyone’s views and opinions equally?
  • Do we recognise our affiliations and potential conflicts of interest?
  • Would we be proud if we were to read about our work and solutions in tomorrow’s papers? 

3.5 Taking concrete leadership action

All thinking, skills, will and intentions are trivial without resulting action. It does not matter that you have great ideas and you want the best if that does not show in the actions that you take and the decisions that you make.

  • Do I take action as I see right and just, despite my fears and doubts? Or do I just say: “It’s none of my business”?
  • Do we admit our mistakes and failures? How do we deal with them as a workplace? Do we look for someone to blame or can we learn from our mistakes?
  • As an organisation, where do we place our ethical standards? Do we want to be passive followers or uncompromising leaders?

4. Leadership is based on self-understanding

In Riitta Viitala’s hierarchy model of leadership competence, intrapersonal competences are the foundation of leadership. Intrapersonal competences include the ability to recognise your own role in a group, an organised self-image and self-awareness, an ability to recognise your own motives in different situations, and awareness of your own values. In all its simplicity it is about your degree of self-awareness, your ability to identify your emotions and needs and to manage them and tolerate uncertainties and change while staying in touch with your own and others’ emotions, goal orientation and inner sense of safety.

Erika Heiskanen from Juuriharja has developed Viitala’s model further and added ethical leadership competence to the core of competences. It defines how and for what goals and objectives leadership capacity is used.

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There is no learning without reflection

Self-reflection is a skill that is important for improvement and learning on all levels of leadership competence and beyond because learning is not possible without reflection. Reflecting on your own foundations and abilities stemming from your personality and the elements of ethical leadership are especially critical to becoming a better leader.

It is demanding work. Identifying your own beliefs and critically exploring their justification from different perspectives are especially challenging.

Practice means progress and you can begin by asking yourself a few of the following questions every week:

  • What am I especially excited about? What learning opportunities does it offer?
  • What kinds of ethical challenges have I identified this week? Which of my own values do they concern?
  • How have I shown empathy? What consequences has it had?
  • What is my biggest challenge as a leader this week? What did I learn from this?
  • What emotions have I had? What do they communicate to me?
  • What is the most important decision I have made? What beliefs is it based on?
  • How well balanced are my values and my actions?

5. How to make ethical choices even in difficult circumstances

One in four leaders say they experience some or considerable stress due to ethical conflicts or problems. Tools for ethical decision-making make everyday work easier and reduce stress. At a minimum ethical decision-making is a part of risk management and at its best it is a part of competence capital that increases productivity.

Large international listed companies have for a long time included good leadership and the ability to make ethical decisions in their code of conduct. This has been motivated by failures: the financial scandal that led to the bankruptcies of the energy company Enron and the accounting firm Arthur Andersen, the BP oil spill in the Gulf of Mexico and so on. It also seems that standards are becoming more strict. At a minimum ethical decision-making is a part of corporate risk management and at its best it is a part of competence capital that increases productivity.

It is not enough, however, to have a technical grasp of ethical decision-making. You must also be able to recognise the everyday situations where ethical perspectives must be taken into consideration and make ethical decision-making a part of the company’s daily operations and culture. This means that the ethical competence of senior management must be reinforced and ethically challenging situations must be analysed, including decision-making.

Ethical decision-making is possible when the organisation and the decision-maker are sufficiently ethically sensitive and able to recognise associated ethical issues and problems. The consideration of the ethical principles required by the circumstances can thus begin and awareness of ethical alternatives emerges. Ethical dilemmas may be caused by the decision-maker not knowing what would be the correct course of action and/or not doing what she or he knows is right.

Because ethically challenging situations are ambiguous and lend themselves to interpretation, it is often difficult to identify such situations proactively. Individuals competences can also vary significantly. Over 16% of Finnish supervisors have never identified an ethical dilemma in their work even though they occur on a daily basis.

Stage 1. Ability to recognise ethical questions

The ability to recognise ethical questions is like the beam of a torch in the dark: you only see what is lit by it. What you are not aware of does not exist for you. Understanding this is decisive because everything we are not aware of is outside of our choices and influence. If you miss a situation where a decision is needed, you will miss the decision. 

Stage 2. Using your moral imagination

Moral imagination is like a mental tool that you can apply before facing a challenging situation or making a decision. Moral imagination enables a leader to analyse the people involved and their perspectives and to anticipate their reactions and the consequences of alternative approaches. The idea is to detach yourself from the situation emotionally and to view the different factors from above.

Moral imagination helps you to see what lies behind different alternative decisions and their consequences from the perspective of all relevant parties. Often there are consequences that are easily ignored in busy everyday situations. A deeper understanding of another person’s perspective, analysing the importance of emotions and processing several alternative scenarios offer more choice.

In the end, an imaginative leader will face fewer difficult negotiations and interactive situations because there will be fewer bruises all around. Using your imagination leads to more innovative solutions in all walks of life. Stakeholders are happier when their perspectives are taken better into account and personnel are more motivated and innovative than before. In fact, it is possible for imagination to spread.


The stages of moral imagination

  1. Detach yourself from a situation and your own role to see both the emotions of others and their meaning in a more conscious way.
  2. Analyse the factors involved in the situation: the history of the people involved, their roles in the organisation, the characteristics of the organisation’s culture, their needs and earlier experiences of similar situations.
  3. Imagine possible scenarios from different perspectives: how might the situation develop and what are the alternative courses of action?
  4. Evaluate the consequences and ethical sustainability of alternative solutions: can they be repeated and generalised and are they acceptable to the various parties.

Stage 3. Will to make ethically sustainable choices

Ethical motivation means the will to make ethical choices between different alternatives.

Ethical decision-making requires the definition of ethical values. A case: You notice that there are two solutions to a problem. One will increase your personal power and the other will be more ethically sustainable. An ethically motivated leader will want to choose ethical responsibility over personal power.

Stage 4. Courage to bring up an issue and take ethical action

In the simplest terms, courage is about doing what one is scared of. More than anything else, ethical leadership is courageous leadership and often it requires you to face your fears and enter areas of discomfort.

Ethical leaders will not just think and talk ethics, they will take decisive ethical action no matter what the circumstances. The moral courage of an ethical leader is not limited to themselves; they have the social courage to encourage and demand others to be ethical, too.

Typically people say they are “forced to” or that “there are no other options”, or that they cannot or that “you can’t do that”. Actions are always choices and so is inaction. A leader is forced to take action all the time because there are so many demands and expectations.

Often, avoiding your responsibilities is what angers both customers and employees. A minor mistake can be understandable. If it is corrected quickly, they are likely to remain happy and continue to trust you. If you try to avoid your responsibilities or do not properly correct your mistakes, you will irritate others and they will lose trust in you and your relationship will be spoiled.

Sometimes it may feel difficult to take responsibility for something you have not done or you cannot influence. You want to assign blame on a colleague, not you. But put yourself in the customer’s position. Does avoiding your responsibilities give a good impression? Would you hire someone who does not take responsibility?

Think of your role as the person who brings up matters as the role of a delivery van driver. You only have the van in which to put all the things you bring up. If you intervene in everything and everywhere, people will think you are a nitpicker and your opinions will cease to have effect. So be careful when you choose what to put in your van. Also, consider carefully how you bring things up.

6. Use the HALO model to build trust

In practice, the HALO model can be used to build trust. The name comes from the Finnish words for goodwill and support (hyvä tahto ja tuki), openness and vulnerability (avoimuus ja haavoittuvuus), principles (linjakkuus) and competence (osaaminen).

H: Goodwill and support

Goodwill and support mean that leaders must ensure that they genuinely want good things for every member of the organisation and that they support them in their work and otherwise as people when needed. This is not always easy because it can be difficult to equally like all members of your workplace and your commitment to goodwill will present itself differently to different people. Whether we want it or not, these differences in emotions can be seen from afar. To improve your skills in having goodwill, try to find something you like in everyone.

A: Openness and vulnerability

Openness and vulnerability mean that a supervisor must work transparently. Supervisors must provide abundant information about work and its purpose so that people can understand the big picture and how what they do is linked to their colleagues’ work. This also improves productivity because this reduces redundant work. People often also have misconceptions about the quality of work, different ways of working and the scope of work. A boat builder will have an easier time building the right kind of boat if the builder knows whether it will be used on a small lake or at sea. In an office this means informing people whether a memo is for internal or external use, what is it needed for and who will rely on its information in the future.

Openness also impacts improvement and this involves vulnerability. To build trust we must be able to give and receive feedback even on sensitive matters. Supervisors must be ready to receive feedback on their own their own work and to critically analyse it based on the feedback. Managers and supervisors often stumble here simply because often they are used to receiving so little feedback that they have formed a fixed but mistaken view of themselves and their work as managers.


L: Principles

The third element in the model is principles. It means the consistency of words and action, honesty and predictability. Self-reflection and examining your own thinking and emotions before, during and after various situations may spare you from many blunders.

When self-reflecting, a supervisor should examine the following:

  • Do I follow the instructions I give to others?
  • Am I being honest now?
  • Am I being predictable?
  • Am I following agreed policies?

Reflection takes time. In fact, they main reason why managers do not realise they are not being consistent is that they do not have the time. Our hectic lives prevent us from seeing what is really happening. Another common challenge is that we do not properly know ourselves and hence are poor at recognising our own emotions and influences.
In addition to always being in a hurry and not having time, we are great at seeing things in a positive light.

O: Competence

The fourth element of the model is competence. Leadership is a competence that supervisors exercise through their persona. Supervisors should remind themselves that leadership is a holistic matter. The feedback you receive is about your competence, not your persona, however, even when it is clumsily given. In the same way that a figure skater is hungry for feedback to be able to become a better athlete, supervisors should seek feedback to fuel their learning and improvement.

As a supervisor, your mental wellbeing depends on challenging yourself to learn and to improve as a person. Declaring yourself complete is the beginning of your mental demise.

There are many ways to improve: reading books, attending lectures and courses, in-depth discussions with peers and extensive and exhaustive training. It pays to use all of these, spacing them throughout your career. It is important to find support for your personal development at an early stage in order to ensure that you get constructive feedback that guides your work as a supervisor and prevents you from forming a distorted self-image. It is also a way to ensure that you improve in a way that helps and encourages others to give feedback.

Sometimes a manager discovers at the end of a long career that people were too afraid to say what they really thought about the manager. This also means that nobody cared enough to take the risk. With a handicap, it is rough rebuilding your identity as a manager and improving your skills. It may also feel humiliating. Yet when you accept that it is never too late for feedback and improvement, you will survive it. An easier path, however, is to take self-improvement seriously and make it part of your work from the beginning of your career as a supervisor.

By rehearsing the four HALO elements supervisors can improve their own work, be more aware as managers and increase trust between themselves and their team members. Studies show that when employees have strong trust in their supervisor they are more productive as individuals and as teams. For teams consisting of specialists that constantly deal with large sets of data, trust plays an especially important role to productivity.

7. Ethical resilience helps you cope

Operating environments often challenge your own values and ethical principles. Ethical resilience, an ability to keep up hope and to build a more just and principled operating culture despite setbacks are properties of a sustainable successful leader.

8. Ethical leadership will lead to a wise organisation

Successful ethical leadership solves the fundamental challenge of organisations: how do translate words into action? In a wise organisation plans can be put into action and the organisation’s culture can be improved. In a wise organisation all members and especially its leadership think systematically and use their moral imagination, constantly improve their meta strategic competence and act in an ethically wise and courageous manner (Heiskanen & Salo, 2007).

A wise organisation understands the big picture as a systemic sum of its constituent parts and identifies new solutions to old and new problems thanks to moral imagination.

For people who observe how a wise organisation makes decisions, it seems as if its leader can predict the future. What is more, the members of the organisation want and dare to bring up ethical issues, and constant attention is paid to decisions and choices: where will our decisions take us and what values are inherent in them?

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Why should you improve your ethical leadership skills and how to do it?