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Understanding Ethics: The Difference between Finishing and Finishing Well.

As project managers struggle to balance the competing needs of stakeholders, customers, resources and governments, they must— more than ever before— embrace ethical business practices and integrate them into project planning and execution.

SOCIAL RESPONSIBILITY

Are companies obligated to anything outside of creating profits and obeying the law? Milton Friedman, the 1976 Economics Nobel prize winner and professor once said, “The business of business is business.” Proponents of the various schools of thought have battled with the question of moral minimums and have landed on opposite sides of the spectrum. On the conservative, strict market capitalist side, it is argued that the sole reason for the existence of a corporation is to make profits. Companies that do not create value not only will die but should die. In fact, “businessmen who talk this way [about corporate social responsibility] are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades,” notes Friedman1. On the other side, it is posited that business in general exists in society and, as such, any corporation is party to a social contract in which there are not only rights (making profits) but also obligations (observance of public and private laws, resource conservation, charitable activities, and, of course, responsible interactions within and outside the corporation.)

As project managers, we are required to uphold the Project Management Institute’s Code of Ethics and Professional Conduct (Referred to in this article as “The Code”) as well as our employing company’s own code of conduct or values statement. It gets more interesting: consulting environments and international project management may pile additional codes and credos that we ought to fully understand. Given the current business climate, in which competition is fierce, regulations are strict, and customer loyalty is at stake, however, more companies are utilizing projects as the vehicle of choice to keep their edge and project management as the chosen methodology to wisely execute on strategic imperatives. This is all good news for the project management community. The downside is that companies are also using project management to leverage their aggressive deployment schedules, unintentionally creating ideal breeding grounds for unethical behavior.

While our job as PMs is seemingly to get things done on budget, on time, within scope, meeting quality specifications and customer expectations, it is vital that we conduct our business with a high degree of moral character. As such, we must formulate an unwavering response to ethical issues by which our rapidly-expanding community of project management practitioners can continue to be deserving stewards of the public trust.

ETHICS DEFINED

Before we attempt to discuss business ethics, we must first define what ethics is.

• What is ethics? Is it just being good? If so, according to whose standards and under what conditions?
• What are the sources of ethics? Is it imposed upon us via external sources such as culture, religion, oral tradition, the government? Or are we simply “wired” to be ethical beings?

TechRepublic published an online article titled “The 10 Biggest Tech Scandals of the Decade”2. Executive disgraces ranged from gross sexual misconduct to murder to accounting fraud. This should be no surprise considering the staggering number of corporate violations we hear and read about every day. People are taking notice of those giant companies run by those giant leaders whose demise was paraded for all to see. Executives are arrested publicly following securities fraud, insider trading, tax evasion, embezzlements, and the like. Politicians and state officials are removed from office or rebuked publicly following ethics violations. Athletes are losing sponsors after sexual indiscretions and drug abuse. And the list goes on.

Ethics, as we know it today, is driven by such scandals. These scandals leave some shaken and embarrassed to have supported the organizations or the individuals now in the media circus and others angered to have invested their nest’s eggs for others to squander. The result is a unanimous, albeit reactive, cry for justice that can only be quenched by the adoption of proactive measures that protects others from similar heartaches; hence the birth or rebirth (enforcement) of ethical standards. Ironically, it seems, lack of ethics creates ethics. Likewise in business, corporations are learning the art of survival from the fall of other corporations. More and more, they understand that they must re-invent themselves and revise the way business is governed.

Thinkers and philosophers have penned countless volumes on the subject of our human moral and ethical obligations. The intent of this writing is not to turn out moral philosophers. The rather pressing purpose is to shed the light on some of the increasingly complex ethical issues facing our profession today. Thus, we will look more closely at the practical side of ethics, specifically as it relates to the field of project management.

According to the Merriam-Webster Dictionary of Law, ethics is defined as “the principles of conduct governing an individual or a profession.”3 While the definition is straight forward, the subject is very arduous to navigate. Sociologist Raymond Baumhart conducted a survey4, asking this question: “What does ethics mean to you?”

The replies were categorized as follows:

• “Ethics has to do with what my feelings tell me is right or wrong.”
• “Ethics has to do with my religious beliefs.”
• “Being ethical is doing what the law requires.”
• “Ethics consists of the standards of behavior our society accepts.”
• “I don’t know what the word means.”

These responses are quite typical. On close examination, however, we discover various deficiencies in each of the previous response categories:

• If ethics are guided solely by our feelings, it is easy to see how feelings may betray our judgment. In fact, our feelings may steer us towards unethical decisions. A utilitarian army general may see fit to send a few dozen soldiers to their deaths as a deliberate war tactic to gain an edge over the enemy in battle. This human sacrifice would be done for the greater good of his country.
• Most religions advocate for morality and ethical dealings. But not everyone subscribes to a religion and, as such, not everyone has a compass for moral conduct. Consider the atheist who does not believe in or endorse the teachings of any religious text. While he or she may agree with the Christian that stealing is bad, the latter may be compelled by God’s commands while the former is compelled by his or her own reasoning or convictions.
• If we limit our ethics to the established laws of the land, we may find that they are far from sufficient for this purpose. We have seen this scenario played out time and time again. Our own nation’s history of slave trade attests to this.
• If we base our ethical behaviors on what is accepted in society, we may find ourselves gone astray. History records the drastic deviation of entire societies from what is ethical as was the case with Nazi Germany.
• So many of us are accustomed to using words which, if probed, we cannot define. It is a fact that choices are dictated by doctrine. In other words, people’s decisions are based on how they weigh choices and alternatives. Consequently, unethical conduct would not be unusual based on an incorrect assessment of what ethics ought to look like.

The number of issues surrounding ethics is certainly much larger. For instance, the rapid advancements in the fields of— to pick a few —internet privacy, abortion, stem cell research, cloning, genetic engineering, etc, brought about the need for serious ethical considerations around whether certain practices which can be done should be done.

PROJECTS REFINED

Each project manager can improve the outcome of projects and create an atmosphere that encourages participation and elevates morale.

Business ethics is not just about bringing ethics to business but also business to ethics. Initial endeavors in this area aimed at institutionalizing ethics by incorporating ethical principles into business operations. This was accomplished by putting into effect company-wide policies in the form of enforceable credos, value statements or codes of conduct. With the rapid advancements in technology, however, the need arose to evaluate each business innovation independently. For example, many proponents of stem cell research object to this research being conducted using human embryos. In this way moral and ethical standards are being argued as they pertain to specific situations, thus bringing business to ethics.

Practically speaking, ethics demand that we take a stand on issues one way or another; thus PMs must be able to discern an ethical breach and assess its impacts and implications on project and stakeholders. Yet, in order to take a stand, PMs must be able to articulate, argue and, if necessary, defend their convictions. Conversely, if PMs are wrong they must quickly rethink their positions and re-plan accordingly.

The project Management Institute (PMI), in the latest revision of its Code of Ethics and Professional Conduct as of this writing, made its members, certification holders, certification seekers, and volunteers subject to the terms of the Code. The institute, with feedback from the larger project management community, identified four values which it deemed most important to the profession and its practitioners. They are:

• Responsibility
• Respect
• Fairness
• Honesty

Responsibility

PMI Definition: “Responsibility is our duty to take ownership for the decisions we make or fail to make, the actions we take or fail to take, and the consequences that result.”

Responsible conduct can be summed up in the old adage: “Share the credit. Own the blame.” It is our obligation to own up to our mistakes. We must be truthful in listing our qualifications, accepting only those assignments that are commensurate with our experiences and abilities. Pilots are frequently warned against flying in conditions that they are not adequately trained to handle or with which they do not feel comfortable despite adequate training. Many General Aviation deaths have been attributed to the pilot’s lack of training or impaired judgment. Unfortunately, these untimely deaths could have been avoided had the pilots assessed their abilities objectively before leaving the ground.

Projects are not so dissimilar. Many are very complex in nature and touch several mission-critical systems crucial to the operation of business. Other projects pose serious health or environmental hazards if not planned and executed properly. Therefore, project management practitioners must only accept projects that they are qualified to oversee. By accepting an assignment, we accept responsibility for its success or failure as well as for any oversights along the way.

Respect

PMI Definition: “Respect is our duty to show a high regard for ourselves, others, and the resources entrusted to us.”

First off, if a person does not hold himself (or herself) in high regard, it will be much harder for them to show others the same virtue; so it goes without saying that it all starts with the project manager to set the tone for mutual respect and civility.

A decade ago, staying within the bounds of established laws may have been sufficient. Today, however, the business playing field is changing. Even in developing nations, gender, age, lifestyle, religious and racial diversity in the workplace are the norm and project teams are expected to embrace the mosaic of their collective backgrounds. Experienced project managers capitalize on such opportunities by encouraging participation and idea sharing. The result is usually a better planned project with more efficient use of resources. Conversely, teams that do not exploit the benefits of diversity shun the valuable input of team members who often feel intimidated or ignored. This is especially true when managing global teams, where customs are vastly different and communication must be planned exhaustively. Someone once said that the old golden rule: “Do unto others as you would have them do unto you” should be amended to say: “Do unto others as they would have you do unto them.”

A respect for resources, however, is not limited to humans. Project managers often control budgets, inventory, machinery, etc. In any case, care must be taken to ensure openness, inclusion, tolerance, civility, and dignity. When an internet company, entrusted with its customers’ private information, profiles their online habits and sells the information to benefit its shareholders without the customers’ consent or knowledge, it causes consumer frustration and destroys trust.

Fairness

PMI Definition: “Fairness is our duty to make decisions and act impartially and objectively. Our conduct must be free from competing self interest, prejudice, and favoritism.”

During the course of a single project we face a good number of issues related to fairness practices, the outcomes of which can be devastating if responses are not planned proactively and issues are not responded to promptly. While the concept of fairness should come naturally to us, we often struggle with applying it. This is partly due to internal and external competing constraints. The biggest danger that project managers face in the line of duty is that of conflict of interest. As we develop “chemistry” with outside vendors, for instance, we tend to want to deviate from what we know are sensible procurement practices and replace them with automatic awards. After all, we tell ourselves, the vendor has already proven its competence. The results are not always disastrous to business but what we abandon is our duty to act fairly and to evaluate all vendors equally based on pre-established selection criteria. The immediate convenience may introduce legal liability for our employer.

Fairness extends far beyond vendor selection; it encompasses objective vendor performance appraisals, adherence to a balanced standard of justice, the seeking of input from all parties involved, and the objective evaluation of such inputs. Moreover, we are obligated to continually evaluate our project plans to ensure that information about the project is equitably distributed. Lack of a good communications plan can result in a perception by some that information is being purposefully withheld.

Project managers must observe team interactions for signs of unfair practices. Any such conduct must be promptly confronted and resolved, possibly leading to iterations in the project’s plans in order to improve processes.

Honesty

PMI Definition: “Honesty is our duty to understand the truth and act in a truthful manner both in our communications and in our conduct.”

If trust in business were a building, honesty would be its foundation. Indeed, without truth and honesty in business, one would rather go hunting with a pack of hungry hyenas. Good business is always transparent and is never based on lies. Several consumer studies showed that people are much more likely to recommend a product that was perceived to be good by a peer consumer5. At the opposite end, consumers tend to trust complaints (about product quality, shipment delays, bad customer service, dishonesty, false advertising, etc) made by other consumers.

Today in business, it is not the black and white areas that are causing intense ethical discussions. It is the many shades of gray which we seek to better define; this applies to the whole of moral and ethical conduct but especially to truth. Austin O’Malley, the 19th century physician and humorist said: “Those who think it is permissible to tell white lies soon grow color-blind.” The pressures of competing priorities in business and the fear of defacing one’s reputation are the biggest tempters behind untruth and dishonesty. When we cure inadequate planning and estimating with “doctored” project reports and what-you-want-to-hear figures, we run the risk of damaging our reputations when the truth finally surfaces. The aftermath can tarnish our hard-earned careers and diminish trust in our profession.

On the contrary, when we factually and truthfully present reports bearing bad news and supplement them with realistic remediation plans, while perhaps causing momentary unrest, we clearly communicate to our stakeholders that we are committed to dealing honestly and that we continue to have their best interest at heart.

MANAGING ETHICALLY

Our surface exploration of the meaning of ethics and business ethics may leave us scratching our heads. If you find yourself frustrated or confused by the elusive definition of ethics given so far, this article indeed hit its target. As was mentioned at the outset, this is no easy topic; yet despite the difficulty, the vast majority of us simply pick an established set of rules – may it be the Ten Commandments, the law of the land, the tribe’s chief, or any other system-endorsed set of ethical standards – and set life’s sail with the chosen compass as guide. Among the group mentioned above a fraction is challenged, on some basic level, to navigate the maze of ethical views, usually in a controlled academic setting. Again, most are pulled toward a certain view and quickly adjust their course, ignoring alternate compass readings.

In either case, sadly, opportunities to better understand the world around us are likely lost forever. We must resist the urge to think of philosophical issues, namely ethics and morality, as exclusively academic with no practical applications to our life or business dealings. In fact, project managers are bound to have to make a fair share of ethics-related decisions during the course of a single project and ought to be reasonably equipped. On the other hand, we must not assume that we will automatically become more ethical by merely studying the subject. Not directly anyway. I am confident, though, that the exposure to those basic moral dilemmas, and the effort expanded in thinking through incompatible views, will serve to sharpen our discerning senses and to help us better understand the motivation behind people’s decisions at the very least. Plato accurately remarked: “The more one knows ethics, the more it is used and the more useful it becomes.”

The project manager, as an individual, must carry a personal compass that defines his own ethics and guides his decisions. Furthermore, he must be aware of his stakeholders’ compasses and able to plan his projects accordingly. With virtual teaming and globalization on the rise, project managers regularly find themselves in uncharted territory. What is considered a bribe in one country is usual business practice in another. An acceptable joke in one meeting becomes highly offensive in another. Effective team building events in one setting are a waste of time in another setting. To illustrate this point, imagine the transition of a British team of international project managers when the incumbent British program director moved on and was replaced by an American. During the first meeting, the new director gathered the teams and relayed his excitement for the opportunity to lead and serve them. However, his enthusiasm was rather met with shrugs. The British team did not view their transition to an American as a problem but they could not relate to his enthusiasm; to them it was somewhat sophomoric and was dubbed in their circles as “typical American cheerleading.” Clearly, the American brought with him a set of notions about what it meant to be excited and the British brought their own.

These issues are rampant in projects even within a country. Consider the diversity between a team comprised of members from New York, California, Texas, Tennessee, and Puerto Rico. Again, the burden lies with the project manager to exploit the opportunity instead of allowing it to become a hindrance.

Inside the corporation, business ethics solves some of these conundrums by implementing explicit guidelines for business practice and conduct. Therefore, clear upfront communication and enforcement of these guidelines, starting in the planning phase, helps the team to adjust their compasses collectively.

Of course, we cannot expect these company credos, value statements, and codes of conduct to be exhaustive so we must rely on our personal ethics in the end to solve most day-to-day dilemmas, outlining once more the crucial need to be educated on questions of ethics.

Two decades ago, businesses were satisfied with obeying the laws and regulations imposed on them. Today, ethics are fundamental to the well-being of any business looking to sustain itself over the long term. With stricter regulations, globalization, and a heightened awareness of ethical breaches in the marketplace, a business now needs to survive on its own merit. Corporations who understand the benefits of corporate citizenship to their bottom line incorporate such programs into their strategic plans. They voluntarily implement social initiatives and go beyond what is required by the law.

These businesses understand the price of ethics as well as the price of poor ethics. They are more willing to train their resources to be more apt in dealing with the gray areas. Noreen Hertz, Professor of Globalization at Erasmus University said: “It’s usually not a matter of available resources. It’s a matter of what we choose to do with them.” Corporate executives are now working through Project Management Offices (PMOs) and steering committees to ensure that these directives are being implemented and enforced in all areas of project management from project selection, and procurement to project planning and closure.

As individuals, we must cooperate by holding ourselves accountable not only to our primary stakeholders (customers, employers, suppliers, etc) who are affected directly by our projects but also to the oft-forgotten secondary stakeholders who will eventually benefit or be harmed by our decisions. There was a project in Africa during which water from a small river was diverted to a treatment facility, providing clean drinking water to thousands of poor villagers. The project was a success in the eyes of the team and was showcased by the media. That is until another source captured the story of the villagers further downstream who could no longer get what little water they desperately needed to drink, water their life-saving crops, and sustain their animals. As a result of the project’s “success”, some died, some lost their crops and animals. Others simply had to move. Was this project successful?

FINISHING WELL

Project managers are often faced with ethical dilemmas that cannot be solved only by theory gained through training. PMI refers to the kind of reasoning which must take place in cases such as these as Expert Judgment. It is expert because it must draw on the project team’s collective expertise or call upon specific knowledge outside of the team (e.g., legal, HR, compliance, etc) for resolution. Moreover, it is expert because it follows an applied system of thought process that has been established. Yet, project managers need not fret as they themselves can become more competent in dealing with these dilemmas by following a proven process.

The Markkula Center for Applied Ethics at Santa Clara University published an online article in which several professors collaborated to introduce “A Framework for Thinking Ethically6.” A similar, albeit less structured, set of guidelines was developed by David Lax and James Sebenius7. It poses the following questions:

1.     Are you following rules that are generally understood and accepted for the task taking place? For example, in poker, bluffing is accepted as part of the game.

2.     Are you comfortable publicly discussing and defending your action? Would you be comfortable if your friends were aware of it? Your family? On the front page of a newspaper?

3.     Would you want someone to do it to you? To your family?

The evaluation methods above are in line with PMI’s methodology for project management, which encourages thorough evaluation and fact gathering before an action plan is formulated.

It is important, therefore, for the project manager to approach his career as a life-long pursuit and to use all available tools, training, and existing guidelines to protect everyone involved from harm, regardless of proximity. While the institutionalization of business ethics allowed companies to monitor breaches and hold the project team accountable for their decisions, it is up to the individual to conduct their business within the appropriate ethical and moral framework.

The wise words of former U.S. president John F. Kennedy still echo vividly today8: “The ultimate answer to ethical problems… is honest people in a good ethical environment. No web of statute or regulation, however intricately conceived, can hope to deal with the myriad possible challenges to a man’s integrity or his devotion.”

Bibliography:

1 The Social Responsibility of Business is to Increase its Profits, New York Times Magazine, September 13, 1970 Essay by Milton Friedman.

2 The 10 Biggest Tech Scandals of the Decade, TechRepublic, Nov, 16, 2010, http://blogs.techrepublic.com.com/10things/?p=1947&tag=tr-left.

3 Merriam-Webster Dictionary of Law, © 1996, Merriam-Webster, Inc.

4 A Short Course in International Business Ethics, Charles Mitchell, World Trade Press, 2003.

5 Personal Recommendations and Consumer Opinions Posted Online Are the Most Trusted Forms of Advertising Globally, the Nielsen Company, July 7, 2009, http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/07/pr_global-study_07709.pdf.

6 A Framework for Thinking Ethically, Markkula Center for Applied Ethics, Santa Clara University. Used with Permission.

7 The Manager and the Negotiator: Bargaining for Cooperation and Competitive Gain, David A. Lax and James K. Sebenius, the Free Press, 1986.

8 John F. Kennedy, Message to Congress on April 27, 1961.