The leader in the mirror
trust, risks and dilemmas in project leadership
There are people who are recognized as born leaders, others who stumble into leadership, and still others who become leaders because of their position. All leaders, however, are leaders because other people are willing to follow them, people who share their ideas and values and commit to their vision, their projects, and their decisions. People trust them.
Trust, or the absence of it, becomes particularly evident when the project leader must guide the team to face the unknown, to recognize their fears and/or their hopes and make a decision. Trust itself might hide an element of uncertainty and, at the same time, it creates an obligation. When defining uncertainty, leading by example will be more important than ever and shared values must be upheld to unleash the full power of trust, uncovering potential ethics dilemmas alongside threats and opportunities.
This paper will explore the impact of ethics in generating and sustaining trust in the project's moments of truth with particular reference to project risk management. Based on the work of the Markkul Center for Applied Ethics of Santa Clara University, the paper will propose a project ethical risk assessment system to identify and analyze causes of ethical risk at industry, company, and individual levels and evaluate impact on the project.
The Project Management Institute (PMI) Ethics Member Advisory Group (EMAG), who has authored this paper, is a global team of experienced volunteers who are committed to facilitate learning and discussion about ethics and professional conduct in project management.
On 7 June 1893, a young elegant Indian lawyer was forcibly removed from a “whites-only” carriage on a train in South Africa, where the segregation law divided carriages by race. Three years later he was arrested for refusing to carry the “pass,” an obligatory identity document card required by the Transvaal government which had forced the registration of every member of the Indian colony. He later adopted a non-violent civil disobedience know as satyagraha, which meant “loyalty to the truth” and inspired movements for civil rights and freedom across the world. His name was Mohandas Karamchand Gandhi, later known as Mahatma, the high-souled (Fischer, 1997).
Almost a century later, a small tired woman sat on a bus on her way home in Montgomery, Alabama. Although she was sitting in the colored section of the bus, she was asked to give her seat to a white person and she refused. Her name was Rosa Parks and when she decided to file a lawsuit against the city bus law, her entire community rose in her defense with a bus boycott that lasted 381 days. The night before her trial a young Martin Luther King, Jr. addressed the Montgomery Improvement Association and said “Since it had to happen I'm happy it happened to a person like Rosa Parks, for nobody can doubt the boundless outreach of her integrity.” While she never took a prominent leadership role in the movement, Rosa Parks is still widely recognized as the mother of the Civil Rights movement (Cain, 2012, p. 60).
When Steve Jobs was called back in 1997, Apple was closed to bankruptcy and, by the time he died in 2011, he had built it into the world's most valuable company. When his biographer Walter Isaacson asked him what he thought was his most important creation, his answer was Apple itself: “making an enduring company was both far harder and more important than making a great product.” (Isaacson, 2011) Although Jobs was often defined as an arrogant “jerk,” 97% of Apple employees approved of him and most of his colleagues described him as “brutally honest,” and never willing to settle for anything other than the absolute best, with himself as well as with others (ibid., 2011).
Mahatma Gandhi, Sara Parks, and Steve Jobs certainly had different personalities, acted in different contexts, with different goals and leadership styles. However we can recognize a common thread in their stories: a strong alignment between their values and their actions. Because of their inner alignment, people trusted them and followed them.
In the Collins English Dictionary, we find the general definition of trust as “reliance on and confidence in the truth, worth, reliability of a person or thing,” (1979, p. 1557) but what we normally mean by trust could be better defined as knowledge-based trust, which is usually built over time, and achieved when individuals have enough information and understanding to predict another person's behavior.
It's clear that if people anywhere are to willingly follow someone—?whether it be into battle or into the boardroom, the front office, or the front lines—they first want to assure themselves that the person is worthy of their trust. (Kouzes, 2008, p. 32)
Another type of trust might, however, be at play in the project environment—the so called swift trust. The concept of swift trust was introduced by Meyerson, Weick, and Kramer (1996) to explain the trusting behavior of members of temporary project teams and it was coined specifically to define the initial type of trust that characterized teams with a finite life span and a clear common task.
Swift trust is based more on social structures and actions than personal relationships, and its importance became evident when empirical observation first, and later, researches, showed that teams with a high level of swift trust consistently perform better than others
A detailed study (Robert, Dennis, Hung, 2009, p. 241-279) proved that the two types of trust represent two different processes and are formed at different stages of a relationship. Swift trust cannot be developed at a normal pace since the length of time may vary from team to team and its effect tends to decrease once individuals will have sufficient information to assess the trustworthiness of the other members based on their actual behavior. However, “the impact of initial swift judgments (often inaccurate) linger on and continue to influence knowledge-based trust judgments” (ibid., p. 279).
The research confirms what we might already know intuitively: in certain conditions (i.e. a very specific task, a challenging deadline, or working at a distance), we may trust other people faster and mostly on our “first impressions,” which we might later change on the basis of their behavior. It is said that we have only one opportunity to make a first impression and we should not waste it: that initial trust, even if based on impressions and not facts, do have a longer effect than we might think, and it can be extremely valuable for project teams. Once established, swift trust may create a strong action oriented bond to be maintained throughout the project lifecycle.
Trust, and swift trust in particular, is fragile and it cannot be imposed. However project managers should strive to intentionally create an environment that is conductive to the establishment of both swift trust and knowledge-based trust: this is indeed the essence of project leadership.
Value-based leadership is particularly conductive to swift trust, as it build consensus on basic values and consolidates the relationship between leader and follower at the highest level. Values connect our identity to our conduct and sustain our decisions: this relationship is the base of what we perceive as inner alignment and the heart of leading by example: “Values-based leadership connotes a plethora of different meanings, but based upon my experience in the corporate world, the concept is primarily defined as leading by example, that is, doing the right thing for the right reasons and not compromising core principles” (Dean, 2008, p. 61).
Furthermore, in a recent study conducted by the UV University Amstedam (Akker, Heres, Lasthuizen, and Six, 2009, p. 1) the authors explored the expectations of followers and found that the “more a leader the acts in a way that followers feel is the appropriate ethical leader behavior, the more a leader will be trusted.” This should not come as a surprise as “ethics lie at the heart of all human relationships and hence at the heart of the relationship between leaders and followers” (Ciulla, 2011, p. 358).
PMI's Code of Ethics and Professional Conduct identifies four fundamental values to guide project managers’ behavior and their decisions: respect, responsibility, honesty and fairness. Each value has a specific application in the project environment and it implicitly recognizes value-based leadership as the reference model for project leadership, also reaffirmed in the The Project Management Body of Knowledge (PMBOK® Guide) - Fifth Edition, which identifies “respect and trust rather than fear and submission as the key element of effective leadership “(PMI, 2012, p. 513). Fostering trust is also specifically mentioned as one of the responsibilities of the project team leader.
We can therefore define a logical progression from ethical behavior to trust to leadership, and ultimately, to project success where ethical behavior is the building block for both leadership and project success.
If the pathway appears linear, projects often are not. Uncertainty and risks are a central element of projects and the true challenge of project leadership: would we really need a leader if the way ahead was known, clear, and certain?
Uncertainty is the crucial fulcrum between trust and distrust. Trust, or the absence of it, becomes particularly evident when project leaders must guide their teams and other stakeholders to face the unknown, to recognize their fears and/or their hopes, and make a decision.
Its role is as crucial in project risk management as it is in leadership: trust reduces fears, minimizes feeling of vulnerability, and, in general, lowers the level of stress that might be caused by facing the unknown. In general, “fear is a bad advisor, it narrows our mind, kills curiosity and with it the willingness to explore the unknown” (Meloni, 2011, p. 8).
In his famous definition of the leader as “a dealer in hope,” Napoleon summarized the strong relationship between risk management best practices and leadership in terms of intuition, ability to envision the future, and creativity. For instance, a practical application in project risk management will include opportunities as well as threats: balancing and tuning out threats and opportunity through the risk management processes will help our brain to remain open and receptive, defusing the negative bias. Far more powerful than any brainstorming techniques, curiosity will help to overcome the bias of risk attitudes and risk tolerance”(Meloni, 2011, p. 8).
Finally, when facing uncertainty, leading by example will be more important than ever and shared values must be upheld to unleash the full power of trust, uncovering potential ethics dilemmas alongside threats and opportunities.
In this paper we will argue that exploring the ethical dimension in project risk management processes will provide project managers not only with a deeper and broader understanding of the project; it will also help them to generate and sustain trust when most needed and thus assert and consolidate their leadership.
The paper will first analyze the connection between various aspects of project risk management, value-based/ethical leadership, and decision making, and will provide a practical tool to help project leaders identify ethical risks in their projects.
The Moments of Truth
A translation from Spanish “el momento de la verdad,” the expression “moment of truth,” is originally used in bullfighting to identify the moment at which the matador is about to make the kill. The more common and less cruel meaning emphasized the importance of a certain situation when our competences, skills, character and values are tested. In the word of Martin Luther King, Jr. “the ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenge and controversy” (The Oxford Dictionary of Quotations, 1999, p. 436).
It is not uncommon for ethical dilemmas to arise when managing risks: we have seen that human reactions to uncertainty are extremely complex and varied. Also, as the pressure to deliver gets stronger and stronger, choice between short-term gains and the greatest good might easily get out of focus, particularly in temporary organizations such as projects and programs.
In their Harvard Business Review blog article, J. Zenger and J. Folkman relate the data collected from 5,268 leaders in five different organizations, showing that “leaders the next level down tend to be rated lower than their managers on every leadership dimension - and that includes their honesty and integrity. In other words, levels of honesty are set at the top and can only go downhill from there”(2012).
The data also shows that managers have a tendency to “assume higher levels of integrity than the workers do themselves” as shown in the graph below (ibid, 2012).
The lessons learned from this research points to the need of an active role toward ethics, challenging assumptions and deliberately communicating expectations regarding ethics, honesty, integrity: Leaders “should put stronger structures in place to require and enforce the level of integrity they want to protect and assume is in place. They should take a good look at their own integrity and honesty standards and consider how well those standards are communicated and made evident to their teams” (ibid., 2012).
Usually the organization's ethical expectations of itself and of its members are stated in its code of ethics and professional conduct (PMI Code of Ethics and Professional Conduct, 2006). However, “leaders do not have to be power-hungry psychopaths to do unethical things, nor do they have to be altruistic saints to be ethical. Most leaders are not charismatic or transformational leaders. They are ordinary men and women in business, government, nonprofits, and communities who sometimes make volitional, emotional, moral, and cognitive mistakes”(Ciulla, 2011, p. 540).
Innovation, tight constraint, and conflicting stakeholders’ interests often place project leaders in front of unique and overtaxing situations which might be difficult to unravel from an ethical perspective and they need to develop ethical decision-making skills.
The moral challenges of power and the nature of the leader's job explain why self-knowledge and self-control are, and have been for centuries, the most important factors in leadership development. Ancient writers, such as Lao-tzu, Confucius, Buddha, Plato, and Aristotle, all emphasized good habits, self-knowledge, and self-control in their writing. (Ciulla, 2011, p. 510).
Leading-edge organizations have recognized the need of providing guidance to solve ethical dilemmas and have condensed the critical elements of their codes into a sequenced “ethical decision-making model,” or “framework,” that guides the decision-maker through a series of steps that direct him or her to making the best choice possible. The practical ethical decision-making framework is carefully tied to the values and codes of the organization, uses language familiar to members of the organization and can be illustrated with examples of situations commonly encountered by the organization's members. Although no code or ethical decision making framework can resolve definitively most specific ethical dilemmas, a good code and ethical decision making framework (EDMF) can help to clarify the situation, eliminate poor choices, and illuminate better possibilities.
PMI has developed an ethical decision making framework (EDMF) to help practioners and credential holders when they are faced with ethical dilemmas. A companion to the PMI Code of Ethics and Professional Conduct, the PMI EDMF, places critical thinking at the heart of solving an ethical dilemma. As such, it helps to frame problems, clarify goals, examine assumptions and options, discern hidden values, evaluate evidence, and assess conclusions. “Critical” in this context connotes the importance or centrality of the thinking to an issue, question, or problem of concern; it does not suggest disapproval or negative judgment. “Thinking” in this context honors the sequence of thought before action where the actions that are taken have been informed by the preceding thoughts. Critical thinking is proactive. The answers to the questions raised by the PMI EDMF are the responsibility of the user and the EDMF does not presume to offer those answers. However, the EDMF can also be used effectively at the end of a decision-making process, when a decision is about to be made, to reflectively look back to see if the important steps have been taken and if the important considerations have been made.
Leadership is a particular type of human relationship. Some hallmarks of this relationship are power and/or influence, vision, obligation, and responsibility. By understanding the ethics of this relationship, we gain a better understanding of leadership, because some of the central issues in ethics are also the central issues of leadership. They include the personal challenges of authenticity, self-interest, and self-discipline, and moral obligations related to justice, duty, competence, and the greatest good (Ciulla, 2003, p. 302)
Project Leadership and Risk Attitudes
A Guide to the Project Management Body of Knowledge (PMBOK® Guide) - Fifth Edition indicates that initial project phases and planning processes are particularly crucial for the project leader, “although important throughout all project phases, effective leadership is critical during the beginning phases of a project when the emphasis is on communicating the vision and motivating and inspiring project participants to achieve higher performance” (PMI, 2012, p. 513). The same would apply to the forming and storming phases of Tuckman's model for team development (Tuckman, 1965). However, the impact of leadership on the project environment could also be highlighted from the perspective of each knowledge area and risk management stands up as the perfect candidate.
Project risk management aims “to ensure that preferable futures are possible, then move them into the probable zone” (Hillson, 2010, p. 195) and thus it is strongly connected with envisioning and leadership: in the words of Rev. Hesburg, “The very essence of leadership is that you have a vision. You cannot blow an uncertain trumpet”.(The Oxford Dictionary of Quotations, 1999, p. 371).
Effective risk management requires the active involvement and commitment of various stakeholders toward organization success: “to be successful an organization should be committed to address risk management proactively and consistently throughout the project. A conscious choice should be made at all levels of the organization to actively identify and pursue effective risk management during the life of the project” (PMI, 2012, p. 311). To gain the required level of commitment, project leaders must understand risk attitudes and their impact on the project. Risk attitudes are generally defined as “a chosen response to uncertainty that matters” (Hillson, 2010, p. 155).
The definition of risk attitudes as “chosen response” may be related with at least one of the tenets of the PMI Code of Ethics and Professional Conduct, which defines responsibility as “our duty to take ownership for the decision we make or fail to make, the actions we take or fail to take and the consequence that results” (PMI, 2006), and it requires in depth investigation ranging from neurophysiological responses to mental processes to cultural and organizational factors that will come into play in the decision process lying underneath a specific and possibly “chosen” risk attitude.
On the first point, recent researches show that our reaction to uncertainty involves both the lower and more primitive parts of our brain (where distrust takes place) and in the higher brain (where trust takes place), which is also the part of our brain that enables us to reconcile doubt and develop strategies to handle risk and uncertainty (Dimoka, 2010). All the other aspects are synthetized in the PMBOK® Guide under three fundamental factors: 1) Risk appetite, which indicates “the degree of uncertainty an entity is willing to take in anticipation of a reward,” 2) Risk tolerance, which refers to “the degree amount or volume of risk that an organization or individual will withstand,” and 3) Risk thresholds, which represent “the measure along the level of uncertainty or the level of impact at which a stakeholder may have a specific interest” (PMI, 2012, p. 311).
The impact of risk attitudes on the project is reinforced by the prominence of expert judgment among the project risk management tools and techniques listed in the risk management processes of the PMBOK® Guide, where it is also repeatedly stated that “the experts’ bias should be taken into account” (ibid, p. 327).
Among the tools and techniques, we also find meetings, information gathering technique, risk facilitation workshop, all highly collaborative techniques requiring project managers to engage experts and stakeholders with various roles in the project in meaningful conversations about risks.
Judith E. Glaser, author of Conversational Intelligence: How Great Leaders Build Trust and Get Extraordinary Results, stresses the importance of building a foundation of trust with stakeholders and she lists five characteristics of an engaging and powerful conversation:
- Transparency: share information and be open to discuss why you do what you do: this turns threat into trust.
- Relationships: building relationships before working on tasks is paramount and provides a foundation for both handling difficult issues and identifying aspirations.
- Understanding: appreciating your stakeholders’ perspectives and points of view strengthens bonds of trust. Listen and ask more questions. Minimize fighting for your point of view and maximize exploring others’ perspectives.
- Shared Success: defining success with others creates a shared meaning about what is and isn't important to work on together. By defining success together, everyone contributes to co-creating the future we believe in.
- Truth-telling: speaking with candor and caring; and when misunderstandings occur, taking risks with courage and facing reality with openness to learn. Working and narrowing the reality gaps with others creates alignment and builds bonds of trust.
It is evident that Glaser's conversational strategies can be positively applied to many project management processes but they become particularly relevant in project risk management when conversations are likely to be burdened by risk attitudes.
Risk Leadership and Ethical Leadership
In his book Tame, Messy and Wicked Risk Leadership, Dr. Hancock proposes to redefine project management as a social interaction and introduces the concept of risk leadership: “The more we stare at the jumble of equation and models, the more we loose sight of what risk is all about. Knowing how risk management works is just the beginning. Knowing how and when to use these tools is the art of risk management” (Hancock, 2010, p. 35).
Risk leadership focuses on relationships with stakeholders, scenario planning, and centers on helping stakeholders to understand uncertainty. Facilitating mitigation plans to achieve the best possible compromise is another fundamental aspect of risk leadership, with direct reference to the Game Theory of J. von Neuman and Oskar Morgenstern: “Game Theory teaches us that human beings create a complex jumble of uncertainties for one another” (Hancock, 2010, p. 21).
Game Theory analyses conflict situations and the search for competitive and cooperative solutions and “is an attempt to mathematically describe human behaviour in instances in which interaction involves the winning, or the sharing, of a resource” (Meloni, 2008, p. 4).
Cooperative games, in particular, are games in which all the players can make a mutually beneficial decision (or at least one that will limit losses). They are referred to as non-zero sum games, because in this type of game winning and losing do not balance each other; their sum can be less than or more than zero. The Nash Equilibrium theory on cooperative games states that “the best result occurs when every group member does what is best for himself and for the group according to the theory of dominant dynamics “ (ibid., 2008, p. 6). Nash's theory contradicts that of Adam Smith, considered the founding father of modern economics, who claimed a group will achieve the best result when every member does what is best for him or herself: “individual ambition serves the common good,” and consequently “the best result is achieved when every member of the group does what is best for himself” (ibid., 2008, p. 6). . However, “insofar as a shared and common solution is strategic to a successful project outcome, the project itself becomes a non-zero sum game for the Project Manager” (ibid., 2008, p. 6). This does not mean that competition and conflicts are not as common in the project environment as in any other organizational form, only that they do require to be approached and handled differently.
Hancock's risk leadership can be better understood by its practical applications in specific actions the risk leader must take (2010, pp. 80-88):
- Recognizes the possibility of different outcomes and tries to ensure that risk activities are directed towards making an acceptable set of outcomes more likely;
- Uses concepts and images which focus on social interaction among people, understanding the flux of events and human interaction, and the framing of projects within an array of social agenda, practices, stakeholder relations, politics and power;
- Develops behaviors and confidence in teams through scenario planning and team-building to identify and respond to risks and opportunities;
- Understands the ‘many acceptable futures’ proposition and manages risk to produce the changes needed to achieve acceptable outcomes;
- Is a reflective listener. Reflective listeners can learn, operate and adapt effectively in complex project environments, through experience, intuition, and the pragmatic application of theory to practice.
- Applies concepts and frameworks which focus on risk management as value creation, whilst aware that ‘value’ and ‘benefit’ will have multiple meanings linked to different purposes for the organization, project and individual;
- Adapts the risk process to overcome political, bureaucratic and individual barriers to develop change in behaviors through trust and managing expectations;
- Has learned to live with chaos, complexity and uncertainty, and leads through example to a successful conclusion.
The profile of the risk leader defined by Dr. Hancock has several points of contact with the emerging definition of ethical leadership which has been summarized in four tightly interrelated components (Johnson, 2003, p. 1):
- Purpose - the ethical leader inquires reasons and acts with organization purposes firmly in mind.
- Knowledge - the ethical leader has knowledge to inquire, judge and act prudently.
- Authority - the ethical leader has the power to ask questions, make decisions, and act, but also recognizes that all those involved and affected must have the authority to contribute what they have towards shared purposes.
- Trust - the ethical leader inspires, and is beneficiary of, trust throughout the organization and its environment.
Only a strong value-based leadership could uncover potential ethics dilemmas alongside threats and opportunities and a structured approach to ethics in risk management might help the project leader to establish and consolidate his or her role; set an example of transparency and respect; foster trust; and, at the same time, guide an in-depth risk identification and gain a broader perspective on risk, embracing organization and societal benefits.
My principal message is that ethics is central to the long-term success and sustainability of a company in society today. It is an idea—a point of view, really—that must be integral to a company's governance, leadership, and day-to-day management (Paine, 2003).
“Embedding” Ethics in Project Risk Management
As we have seen, a few key elements are recurrent throughout the most recent literature about leadership and ethics and risk management:
- Leading by example;
- Critical thinking.
The all come into play at what we have defined “moments of truth,” when leadership and effectiveness are brought together.
They have a direct impact on how project management tools and techniques are used to explore “the land of unknown knowns.”
Speaking openly about ethical dilemmas and risks and facilitating open conversations about them with team members and other project stakeholders will contribute to create the necessary conditions where they could freely express their fears and their hope without making them feel exposed or weak, or like an impractical dreamer.
Exemplary leaders know that if they want to gain commitment and achieve the highest standards, they must be models of the behavior they expect of others. Leaders model the way. (Kouzes, 2008, p. 15)
The following paragraph presents a structured model project leaders could use to embed ethics into project risk management processes, focusing in particular on the identification of ethical risks.
The Santa Clara Model
In 2006 L. Berman, assistant professor of management at Santa Clara University and K. O. Hanson, executive director of the Markkula Center for Applied Ethics, presented a preliminary draft of the ethics risk assessment, usually referred to as the Santa Clara Alternative. It was developed as a response to the increasing need for organization to “determine where ethical risks lie and either eliminate the source or mitigate the risk before it reaches headline proportions”(Federwisch, 2006).
The Santa Clara Alternative combined and expanded the two existing measures of ethical risk: the Global Reporting Initiative (GRI) and the Ethics Resource Center Ethics Quick Test. While the GRI mainly concentrate on the past, the Ethics Quick Test focuses on various areas of an organization's commitment to ethics (i.e. values, strategies, goals, objectives, policies and procedures). It does not, however, take into account the individual factor. The Santa Clara Alternative, on the other hand, tries to create a preventive tool that takes into consideration and assesses three different sources of risk:
- the Industry
- the Company (structure or strategy, ethics system and culture)
- the Individual
For each source of risk, the model provides a set of questions and sub-questions and a predefined scale to assess the level of risk to each factor, as shown in Exhibits 2, 3, 4, 5 and 6.
Although at the moment the Santa Clara Alternative (or Model) is the only available in its initial and certainly perfectible draft, its structured approach and the questionnaires are certainly worth consideration to approach ethics risks in projects.
The scales used to rank the level of risk appear to be based on the assumption that the more complex and diverse the system, the higher is the level of risk. Also many of the questions seem focused on conflict of interest.
Although this may appear limited, it important to remember that conflict of interest is quoted in the PMI Code of Ethics and Professional Conduct as “one of the most challenging (subject) faced by our profession. One of the biggest problems practitioners report is not recognizing when we have conflicted loyalties and recognizing when we are inadvertently placing ourselves or others in a conflict-of-interest situation. We as practitioners must proactively search for potential conflicts and help each other by highlighting each other's potential conflicts of interest and insisting that they be resolved “(PMI, 2006, p. 5).
Also, some of the questions might not apply to the project environment, but they might be easily adapted or prompt new conservations or serve as probing questions during brainstorming sessions and/or as a checklist.
Many of the questions are also of a highly sensitive nature and require a dedicated and protected mental and physical space to be properly addressed and answered. But so do many other topics connected with risks and uncertainty: the fact itself of addressing these issues openly may help to break the wall of hesitancy and silence that often surrounds both risks and ethical issues, thus facilitating more candid and valuable risk identification and assessment.
The next step in the Santa Clara Model is “Measuring Total Risk,” and somewhat similar to qualitative risk analysis. Based on the answers to the questions, each risk factor is evaluated in a 1 to 10 scale to define its rating and its importance to obtain a weighted risk (Rating x Importance).
The wording used in the Santa Clara Model might cause some confusion to project managers for whom “Weighted Risk” and “Total Risk” have a different meaning. However, the causes of ethical risks (factors of risk) documented using the Santa Clara Model could be easily integrated in the risk management processes and help the project manager to identify and address areas of the project which are often acquiescently left in shadow.
Last but not in the least, unethical behaviors and frauds are costly. That in itself is a risk that project managers should take into consideration along with the organizations’ and their own reputation. ‘Ethical commitment can also pay off in terms of reputational benefits. As noted earlier, good ethics helps build a positive reputation. And a positive reputation, in turn, helps to attract and retain customers, employees, and business partners” (Paine, 2003).
Does Ethics Pay?
To the question “Does ethics pay?” Professor L. S. Paine of Harvard Business School replied: “There are also less visible and perhaps even more compelling ways that ethical commitment translates into economic advantage. If people do their jobs responsibly and adhere to basic ethical principles in their day-to-day jobs, there is less need for costly oversight and expensive bureaucracy. You can more easily decentralize authority and ultimately have a more flexible and more efficient organization “(Paine, 2003).
In other words, the project manager would have more personal resources to use towards strategic and business management instead of being burdened by technicalities and day-to-day management, thus aligning their profile with the new “talent triangle” and strengthen their professional development: most of the organizations which participated in the PMI Pulse of the Profession™ research stated that “technical skills are the hardest to find but easiest to teach” while “leadership skills are not as teachable but are most important for early success in project management” (PMI, 2013).
The Association of Certified Fraud Examiners (ACFE) calls ethics the “magic product” and defines it as “the most tangible and irreplaceable asset of your company” (Fraud Magazine, 2008). What type of asset ethics might be was investigated by the Wall Street Journal, which in 2008 published the results of research coordinated by the Ivey School of Business. The research was focused on consumers’ habits and their response towards ethical goods. Trudel and Turnbull found that consumers were not only willing to pay more for ethical goods than unethical ones, but they would discount an unethical product more deeply than they would reward an ethical one. “The implications of this study—albeit limited—are apparent. Efforts to move toward ethical production, and promote that behavior, appear to be a wise investment.” (Trudel, Turbull, 2008)
Since you know you cannot see yourself
So well as by reflection, I, your glass,
Will modestly discover to yourself
That of yourself which yet you know not of.
William Shakespeare, Julius Caesar, act 1, sc. 2, ll. 67-70.
Projects are risky. Uncertainty fogs our vision and makes us focus on short term and the small gain. When it comes to risk management, this may endanger not only the project, but the organizations involved and ultimately the community at large.
Lack of vision will certainly undermine leadership, and we have seen that true project leadership is built on trust and transparency. Among the 10 big leadership weaknesses listed by D. Peck, author of Beyond Effective: Practices in Self-aware Leadership, we find: “Leading through incongruity or hypocrisy: not doing what you say, or saying one thing and doing another. Learning edge: to take your own advice before giving it; to find your own ability to walk your talk, and show the way by doing rather than saying. Being true to yourself and your values, and consistent about them with your people”(Peck, 2014).
Next time you are starting a project, consider the opportunity to look in the mirror and ask yourself the questions proposed by the Santa Clara Model and if necessary use the PMI Ethical Decision Making Framework to help you find an answer for potential and real ethical dilemmas. There is a chance that you will discover much that you didn't think you knew, which will help you identify and manage both positive and negative risks in your project. With that awareness, you will be able to transparently look into the eyes of your team and your stakeholders and guide them through uncertainty.
Foresight is the “lead” that the leader has. Once leaders lose this lead and events start to force their hand, they are leaders by name only. They are not leading but they are reacting to immediate events, and they probably will not long be leaders. There are abundant current examples of loss of leadership that stems from a failure to see what reasonably could have been foreseen and from failure to act on that knowledge while the leader had freedom to act. (Greenleaf, 1977)
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Originally published as a part of the 2014 PMI Global Congress Proceedings – Dubai, UAE