How To Make Honesty The Best And Most Effective Policy

This article originally appeared on Forbes.

In today’s world, where trust is often at a low ebb, honesty is a particularly difficult value to satisfy. We’re so used to telling small lies as a kind of social lubricant that we tend to accept a little bit of fudging the truth as part of the cost of doing business. We say things like “Yeah, that was a great presentation” to make someone feel good, and we promise, “I’ll get that to you on Tuesday,” even though the critical path or the absence of some crucial resource make that unlikely if not impossible.

Sometimes withholding the truth is actually necessary in business, like not sharing proprietary information when asked or knowing that someone will be disciplined or fired soon but not disclosing the fact. Or we may burnish and embellish the reputation and accomplishments of our team, perhaps to the detriment of other teams. Sometimes we also suppress dissenting voices because they disrupt our plans, even though they’re describing better ways to make our workplace more inclusive or how we could provide better service to customers.  

 And yet, corporate honesty is necessary to keep companies out of regulatory and legal trouble and can lead to greater success in the marketplace as well as higher employee retention. In particular, Gen Z employees express great concerns about the honesty of their workplaces. How can leaders work to foster corporate cultures that prize honesty and encourage employees to be honest? Two recent books highlight the kinds of organizational decisions that are necessary to keep companies on the level, and the choices and contributions that each individual employee can make.

Why Not Be The Best?

According to Ron Carucci, co-founder and managing partner at Navalent and author of the recent release To Be Honest: Lead with the Power of Truth, Justice and Purpose,organizational conditions can foster either good or bad employee behavior, and the benefits to businesses of encouraging good behavior should be obvious: “The road to the best levels of performance by any metric—financial performance, margin, stock price, customer loyalty, brand loyalty, market share, employee engagement and employee satisfaction all run through the most honest companies.” He emphasizes that although scandal avoidance, morality and ethics are all important, the real question is why any executive would not “want to create an environment in which people are at their best, perform their best, and raise the [organization’s] level of performance.”

It takes forethought to ensure that the organizational environment strengthens employee tendencies toward fair and ethical behavior. Carucci focuses on these four major findings that help ensure organizational honesty.  

  • Keep commitments. “Be who you say you are,” is one of Carucci’s mantras. It’s fine and appropriate to make organizational promises, whether by way of your stated mission, commitments to customers or policies that guide workplace behaviors and decisions. The important thing, though, is to live out those promises and to be accountable for them.
  • Demonstrate fairness. Ensure that every employee believes, “I have as much of a chance of succeeding here as anybody else, no matter who I am, what I look like, or what [occupational role I play].”
  • Deliver transparency. This speaks both to the reliability and completeness of the data that is presented and relied upon for decision-making and also to employees “knowing that their voice is welcomed to offer an alternative view, to push back and dissent.” Otherwise, you’re just creating the “illusion of inclusion” and pretending that employees can truly participate in decision-making.
  • Eliminate cross-functional rivalries. Interdepartmental competition for resources and status can undercut information-sharing and problem-solving. When departments are in conflict, the possibility is much greater that people will be self-protective, hoard resources and otherwise avoid collaboration. But when they work well together, they create value in service provision as well as through efficiencies, encouraging people, as Carucci says, “to tell the truth, behave fairly and serve the common good.”

Lead with Conscience

No matter what’s going on at the department level and in the larger organization, each individual still needs to think through their specific situation responsibly in the time they have available, according to G. Richard Shell, Chair of the Wharton School’s Legal Studies and Business Ethics Department, and author of The Conscience Code: Lead with Your Values, Advance Your Career. He proposes four questions to help individuals evaluate whatever difficult conditions they happen to be facing:

  • “What is the balance of harms?” Assess the consequences of any action and who bears the costs.
  • “What duties do I owe to others?” Identify loyalties that might be at play, and how they might affect decision-making.
  • “Can I live with this decision?” Look at an individual’s sense of identity and their duty to themselves as a moral person as well as their role in the organization or society.
  • “Is there a principle at stake that must not be compromised?” Hold up the employee’s values and reflect on whether there are some principles that should never be compromised.

Honesty in business can seem like a chicken-and-egg dilemma: Which is more important: environment or personal action? The reality is that organizational and personal approaches to honesty intersect as day-to-day decisions and actions accumulate to have a tangible impact on how well people behave. Perhaps the most important thing is not to get caught up in the potential dilemma between people and the cultures in which they find themselves. Instead, take any of the steps recommended in these books to help your organization and the people in it move toward a more fair, balanced, candid approach.

Onward and upward —

LK

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