Embed One Into Your Firm’s Value Set
The complexity and pace of change in the current business environment requires that the creation of value and decision making not be centralized. Many firms have some form of “innovation” in their mission or vision, yet lack the ecosystems that actually encourage innovation. I’m sure most leaders will agree that they do not have a monopoly on winning ideas. That is why creating an environment where ideas naturally and consistently emerge is vital. Doing so requires support for the exploration of new ideas and experimentation, a comfort with failure, and a commitment to working with external partners.
I’m always happy to discuss, at length, the creation of this ecosystem. But we must first tackle something much more foundational if we are to have any success. What I’m talking about is the role of morality, values, and ethics in business – things that in certain circles have become taboo or passé. Admittedly, the subject is nuanced, and the topic will not be sufficiently covered in this article. It is, however, the underpinning of everything that is successful, or not, within our organizations, even if we’d rather not admit it.
I’d like to argue that values, morals, and ethics are inseparably linked and foundational to our businesses, culture, and strategy. It is these pillars that allow us to even discuss decentralization and the creation of an innovation ecosystem. To begin, we will have to define the terms in order to ensure we are on the same intellectual footing.
- Values – I typically define these for our clients as the unwavering principals that are necessary to infuse your culture with purpose. They are the foundation of a person’s ability to judge between right and wrong, the deep-rooted system of beliefs with intrinsic worth but that are not universally accepted. It is a system that allows individuals to determine what should or shouldn’t be. These fundamental beliefs guide a person’s decisions. There are also various levels including individual, firm, and societal values. I strongly encourage all leaders to reflect on their own individual values, but for now, let’s focus on the firm. Of course, if the two are not in harmony, then there is a poor fit with your organization which can cause additional challenges.
- Morals – Morality is formed out of our values. Morals are the actual system of beliefs that emerge from a person’s core values. These are specific and context-driven rules that govern a person’s behavior. Since this system of beliefs is tailored to an individual or firm, they are subjective, and this is where we see moral relativism injected into the discussion – that each firm’s morals may be different relative to any other firm. Morality is subjective and worth inculcating and discussing in our businesses.
- Ethics – Finally, we have the vehicle that allows us to act out our morality. Ethics are what deliver the moral system that we’ve developed. A person, therefore, can be said to be ethical by acting in accordance to one’s morality. That is why codes of ethics are always discussed as actions such as, “perform professional services only in areas of their competence” or “conduct themselves in a fair, honorable, and respectful manner,” to borrow from the code of ethics by the American Institute of Chemical Engineers.
Careful thought and consideration are paramount when defining your firm’s values, morals, and ethics. If you accept the premise at the outset of this article – that of a decentralized system and a required innovation ecosystem – then this foundation is the first step. As technology, particularly AI, continues to develop at a brisk pace, I would even argue, particularly for larger organizations, that an ethics/values committee be established to keep you accountable and aligned in the “face” of a nameless, faceless machine learning platform.
Phil Keil is director of Strategy Consulting, Zweig Group. Contact him at firstname.lastname@example.org.