Decisiveness and Ethics: A Powerful Leadership Combo

By Charlotte Westerhaus-Renfrow

The gift of decisiveness. You can’t touch it or feel it. But you know it when you see it, and when you see it, you want more of it. The ability to cut through procrastination and make powerful decisions is an essential hallmark of a good leader.

A Ketchum 2014 survey of over 6500 workers reinforces this point. The survey found decisiveness is one of the top three skills that make the biggest impact on a leader’s ability to establish credibility and trust. As a side note -- the other two skill sets are open communication and personal presence.

Likewise, researchers behind the CEO Genome Project conducted a 10-year study of leadership traits and characteristics among successful CEOs. The research found that CEOs who were described as “decisive” by corporate board members and majority investors were 12 times more likely to be regarded as high-performers.

This finding comes as no surprise given employees and consumers expect CEOs to have the courage and confidence to make tough decisions regarding what activities and actions are best for their organization. As Peter Drucker put it, “Wherever you see a successful business, someone made a courageous decision.”

But often, there is an additional leadership skill that, while highly valued, can significantly reduce and even extinguish a leader’s ability to make decisive decisions. What is the proverbial Kryptonite that can weaken or damage decisiveness? The simple, yet perhaps surprising, answer is this: ethics.

 

Doing the Right Thing

Oxford Dictionaries defines “ethics” as “moral principles that govern a person’s behavior or the conducting of an activity.” Thus, ethical leadership in business is when a leader acts with his or her own moral principles in mind whenever making a decision. Author Andrew Blackman puts it simply, explaining that ethical leadership is “doing the right thing.” This approach to ethical decision-making is also called deontology.

For example, a rendition of a classic moral duty prominently featured in a myriad of religious teachings -- including Judaism, Christianity and Islam -- is “Thou shalt not lie.” Leaders who adhere to this philosophy are obligated to always be honest. But are there situations where it is ethically permissible for a CEO to lie to customers, dealers, labor unions, government officials or even other departments of their companies in order to generate profit or gain a competitive advantage?

Unfortunately, it’s fair to say that CEOs who feel morally obligated to tell the truth, the whole truth and nothing but the truth are at a heavy disadvantage in today’s business environment. CEOs, and for that matter, a preponderance of employees are quite aware of a rather unpleasant but pervasive fact articulated in the opening sentence of Carol Kinsey Goman’s book The Truth about Lies in the Workplace: How to Spot Liars and What to Do about Them: “You work with a bunch of liars.”

As an illustration, most business negotiators lie—and they lie often. One study found that 100 percent of negotiators lied or failed to reveal a problem if no one directly asked them about it. What about bluffing, partial truths, overstatements and selective omissions? Are these acts examples of deception, and thus, forms of unethical lying?

The major problem with adhering to deontological ethics to resolve different shades of grey in ethical situations is that these types of rules do not easily resolve how a CEO can reconcile the moral obligation to “do the right thing” with his or her corporate duty to make fiduciary decisions to “do the best thing.” Likewise, leaders who struggle within their own personal quagmires of pursuing perfect answers to tough questions may morph from being proactive, decisive and effective into reactive, indecisive and ineffective.

Consequentialism

Unfortunately, in today’s business environment, many employees do not believe that their leaders’ actions are aligned with the moral, ethical standard of “doing the right thing.” A study from the Institute of Leadership & Management in London found 63% of managers have been asked to do something contrary to their own ethical code, while 43% were told to behave in direct violation of their organization’s own values statements. Add to that – the study found 9% were asked to break the law.

Some CEOs appear to be a tad more decisive in making ethical decisions based on a cost-benefits analysis of the consequences (end results) of whether their behavior or action (means) taken will help the greatest number of people or stakeholders. This philosophy is called consequentialism. A classic example of consequentialism comes from British philosopher John Stuart Mill, who argued that “greatest good” is providing the maximum amount of happiness to the maximum number of people and causing the minimum amount of pain.

The consequential approach, however, is not without its downsides. One problem is that unless a leader has a crystal ball and uses it frequently, he or she cannot see the future. Thus, it’s nearly impossible to predict how a decision will or can affect the largest number of people or stakeholders.

Another issue is that consequentialism always involves both winners and losers. For example, if sales are slowing and a CEO decides to fire five employees rather than put everyone on a 30-hour workweek, the 20 employees who keep their full-time jobs are winners – but the other five are losers. Understandably, the CEO in this scenario is facing a real-life moral dilemma within his or her organization, including dealing with his or her own personal regrets of “I wish I did not have to do this.” 

But it’s not all bad news. Studies have repeatedly found practical and positive benefits from leaders who make smart and consequential decisions. For example, one experiment printed in the journal Organizational Behavior and Human Decision Processes found that “ethical leadership was positively and significantly related to employee performance.”

Dealing with Failure

Furthermore, ethical decision-making should not diminish a CEO’s ability to confidently make sage and decisive decisions. As noted in the previously-mentioned survey conducted by researchers at the CEO Genome Project and written about in a 2017 article in the Harvard Business Review, “High-performing CEOs understand that a wrong decision is often better than no decision at all.” Indeed, researchers found only 6% of surveyed CEO’s “received low marks because they made decisions too quickly.” On the other hand, 94% scored low because they were deemed to be slow decision-makers. In sum, study authors determined that, "decisive CEOs recognize that they can't wait for perfect information."

In that same article, former Greyhound CEO Stephen Gorman was quoted discussing his decisions leading the bus company through a turnaround, saying, “A bad decision was better than a lack of direction. Most decisions can be undone, but you have to learn to move with the right amount of speed.”

To be honest, ethical decision-making is not a guaranteed path to business success. Yet inevitably, failure is a part of every success story. The most respected and successful business leaders, ranging from CEOs of mom-and-pop shops to Fortune 500s, have pasts littered with start-ups that went under or ideas that never got off the ground.

Successful ethical leaders often use failure as a time for introspection, self-reflection and personal growth. In the inspirational words of IBM's former chairman and CEO Thomas J. Watson, "You are thinking of failure as the enemy of success. But it isn't at all. You can be discouraged by failure, or you can learn from it. So go ahead and make mistakes. Make all you can. Because, remember, that's where you will find success."

In sum, every leader makes mistakes. Sound ethical decision-making is often made with less-than-perfect information, as the leader looks at an issue and/or opportunity from different angles, and then trusts himself or herself to decisively and confidently do the right thing by moving forward.