Business ethics doesn’t need to be greeted with cynicism: Stop using abstract terms and start telling stories

In a memo to Barclays staff, incoming chief executive Jes Staley laid out his ethical vision for the bank. “There can be no retreat from becoming a values driven organisation which conducts itself with integrity at all times,” he said. 

 

Unfortunately for Staley, company values can often fall on deaf ears, especially when you’re relying on hackneyed rhymes and mantras that can  leave employees feeling infantilised and cynical. Here are the best ways to wax ethical.

 

The problem is that communicating values clearly is a challenge in itself. Staley’s opaque note encouraged employees to strengthen the trust of customers and clients because it is “the foundation of our success”.

 

But a study by the Chartered Institute of Personnel and Development has found that only 29 per cent of employees are actually aware of the values their organisation holds. Even employers with the best intentions can have trouble making their message stick if it is convoluted, or relies on abstract terms like “trust” and “integrity” if they do not relate to anything concrete. 

 

Philippa Foster Back, director at the Institute of Business Ethics (IBE), recommends using a story with a clear narrative to illustrate acceptable and unacceptable behaviour. “Use stories, particularly of instances within the firm itself, where someone may have spoken up and it has led to a positive outcome, or vice versa.

 

That is what people tend to remember,” she says. In Bringing Business Ethics to Life, Bjorn Andersen says that the narrator must avoid the “neutral, rational and analytical” language which typically characterises strategic plans. It “covers up deeper meaning and is rarely suitable for motivating people.” 

 

And if ethics are to resonate, they must be communicated by every tier of management, and on a variety of platforms, from speeches to social media. A large number of corporate disasters, from Enron to the VW scandal, have been blamed on the “normalisation of deviance” – a phenomenon where a bad behaviour becomes normal to a group because it goes unchecked.

 

“Sometimes there can be a difference in the tone between what a chief executive is saying and what employees hear direct from their managers,” says Foster Back. Indeed, a company’s reputation depends as much on the vigilance of junior managers as that of the chief executive, and employees should be encouraged to engage with values, not just imbibe them passively. 

 

“You have to use many different mediums. You can’t just rely on one ‘town-hall’ speech,” says Foster Back. Baby boomers may be receptive to such communication in person or by phone, suggests one IBE briefing, but their millennial counterparts tend to prefer email. Ultimately, active engagement with values by employees themselves, may be most effective. Drinks company Diageo, for example, encourages employees to share how the firm’s corporate values impact their daily experience at work. 

 

Research by Harvard Business School’s Francesca Gino indicates that we perceive ethical improprieties less positively when the outcome is negative, and are more accepting if the culprit gets away with it. Therefore, business leaders should try to convince employees that ethical transgressions will affect profits. 

 

Research by Havas identified a list of the 25 most meaningful brands to consumers, and noted that they deliver an annual share return of almost 12 per cent (nearly seven times higher than the Stoxx 1800 index). “Trusted organisations will get regular business,” says Foster Back, precisely “because their reputation is enhanced.”