A shot at prevention

Sometimes you just have to stand up and say, “This is wrong,” but most of the time, it’s possible to have a discussion about choices.

Imagine you are a software engineer at Volkswagen. Your boss comes in and says, “Bad news. Our new diesel engine has failed its specifications. I need you to rewrite the software so that the engine still passes the emissions tests.” What do you say?

Traditionally, the study of ethics said that you had two choices: go along or refuse and take the consequences. At best, you might pretend to go along until you found a new job.

Andy Fastow, the former CFO of Enron, served more than five years in jail and now speaks about what happened (and his belief that worse things are happening today). In a recent article in The Globe and Mail, he talked about how he answers business students who ask what they should do if faced with something unethical. He acknowledged that openly opposing the unethical behaviour is likely to jeopardize your career. Instead, he suggests that people “find a way to ask questions that raise key issues — such as whether an action creates long-term value — so that others are compelled to explain and justify the long-term implications of a proposed action.”

I think this is becoming the new way to look at business ethics. Sometimes you just have to stand up and say, “This is wrong,” but most of the time, it’s possible to have a discussion about choices.

Whether it’s a manager suggesting alternatives to his or her boss, a new employee puzzled about why something is done, or even a board member asking the CEO a tough question, we all have a shot at preventing the organization we work for from doing something it will later regret.

Mary Gentile, a professor at Babson College in Boston, has written a book telling people how to do just that. In Giving Voice to Values, she asserts that teaching people to determine the right thing to do is insufficient. Her emphasis is on action, “that is, developing the scripts and implementing plans for responding to ... questionable practices, and actually practicing the delivery of those scripts.” She thinks we all need to build the ethical muscle to know “what to say, to whom, and how to say it.”

For obvious reasons, saying, “That’s unethical” to someone is unlikely to produce the desired results. You are essentially saying that he or she is a bad person — and the person will respond with the rationalizations he or she has developed to justify the proposed course of action. Challenging the business consequences is more likely to be heard. This might include setting out the risks of being caught, the potential damage to the company, or the impact on the team or department.

Apply this approach to the Volkswagen software engineer. He or she might say any of the following:

  • it might be possible to tweak the software, but it would be easy to detect, so this wouldn’t work for long. Isn’t there a better way to deal with this?
  • we could certainly do that, but the reputational risk to the company of being found out would be huge. We need to think about this some more;
  • the whole development team would need to know about this — and there is no way it could be kept quiet;
  • are the lawyers aware of this, and are they telling us this is legal?
  • let’s get the senior team together and talk this out. I need to hear from the others; and
  •  long term, spending more dollars and time to build the diesel engine that meets all the specifications is surely the better path. How can I help convince your boss?

The approach chosen will depend on the situation and the people involved, and there’s no guarantee that it will work. It will likely take a long discussion, perhaps several discussions, with many different people. Think of the billions in value Volkswagen would not have lost if a few of these conversations had taken place.