A Systems Perspective on Ethical %$#@ ups

Breaches of trust by an organisation can be incredibly demoralising for people inside or closely associated with an organisation, who may feel judged by their organisation’s failures. While Financial Inquiries are critically important in helping to uplift industry practices, media sound bites that focus on individual cases may address the symptoms rather than the root cause. Our observation is that the vast proportion of people inside organisations intend to do the right thing. We also observe that the environment which allows ethical breaches to occur is usually far more complex and systemic than is presented through the media.

As we consider the themes of the Royal Commission we are aware of needing to work through these from a systems perspective. This is not to take responsibility away from organisations to behave more ethically and evolve their practices. The intention is to open some windows that might help us as a whole society to evolve our systems in ways that enable a better future.

Many of our organisations’ dysfunctions and failures spring from the deeply held and reinforced beliefs, structures and agreements upon which our society exists. In this article, we examine some of the broader systemic and societal dysfunctions which may contribute to the challenges we are hearing about.

Suppressed or absent personal responsibility

Personal choice, responsibility and agency are either developed or undermined through many of our systems. Our agreements and societal expectations about parenting, governance, justice, education and work have a large influence on how responsible we become. Our experience of working in organisations is that often people come into organisations with learnt helplessness or with a mindset of blaming others, OR they take the lowest level of responsibility required. At times, those who take more responsibility, question ethical standards, or demonstrate independent judgement, are punished or suppressed.

How can we reshape our systems to enable greater levels of personal responsibility and agency to be built? What are the basic assumptions we might need to question in order to do so?

Disconnection from compassion and collective responsibility

Without greater awareness of our impact on others and our world around us, economic rationalisation can cause us to do the bare minimum to be responsible. This bare minimum approach often results in a segmented or compliant approach to corporate social and environmental responsibility, rather than stretching the organisation to look at its whole self and how it embodies responsibility and ethics in all of its practices.

As our worlds become more interconnected through social media and the internet, this can also lead to a greater disconnection from compassion. For example, it can be much easier to de-humanise via email or social media than face to face, and be less aware of how aggressive our tone may be to the person receiving it. Disconnection from compassion for customers sits beneath many of the Royal Commission observations.

At the same time, a positive outcome of globalisation can be an expansion of compassion and an understanding of the unseen impacts of our day to day choices. Consumers can address this through being more conscience-driven in their purchasing behaviour, including buying ethically sourced products. Responsible companies and organisations may look at their entire supply chain and beyond, to ensure they only work with providers with the highest ethical practices. David Cooke from Konica Minolta Australia one leader, leading the way in this, and B-Corporations globally meet rigorous standards across a range of responsible business practices.

How can we raise the collective level of conscience so that we use globalisation and technology as ways to connect with, rather than disconnect from our humanity?

Prisoners of own perspectives

It’s curious to us that topics such as religion and politics are often not debated or discussed.

As a modern society, we have become increasingly “politically correct”. The positive intention of this is to create a fair and equitable discourse and society. At the same time, we can use “political correctness” to insulate ourselves from asking the questions that might enable us, and others, to hear other views and open up new perspectives or critique the status quo.

The ability to think critically is often diluted through over tolerance and consensus. Methods like Socratic questioning that invite people to question their assumptions can be met with defensiveness or fear rather than engaged as a valid way of searching out new ideas and develop a deeper understanding. The result is that people often make decisions based on personal preferences or sheer ignorance rather than through having their ideas challenged.

It’s no wonder, with our increasing focus on “tolerance” above understanding that we have not learnt to engage in true dialogue. This shows up in our organisations as toxic communication and decision-making practices which can result in extremes of over consensus, unquestioning compliance, or bullying.

How do we move towards genuine dialogue, where people are both trusting AND discerning? How do we uphold the whole person and positive intent of the “other”, AND respectfully challenge the consequences of their perspective?

Social media/sound bites

The 280-character tweet or the quick LinkedIn post with a visual and a snappy quote has become a common way to provide social commentary. This is wonderful for sharing a clever or different perspective, but terrible at building capacity to explore, test, think and challenge.

Research suggests that we are re-training our frontal lobes from being able to process 7 bits of information at any one time to processing 5. The outcome of this is that we are outsourcing our thinking capacity to a computer and working in short bytes, potentially diluting attention spans and capacity to hold larger perspectives. At the same time, our world requires us to be able to hold much more expansive perspectives to navigate our way through complexity.

How do we create time and space in our daily lives to step back from the impulsiveness of sound bites and quick responses, to observe the many larger systems we are part of?

Worshipping the almighty dollar and the blindness of the short-term business cycle

Shareholder expectations of rapid and substantial returns and executive expectations regarding monetary rewards are represented in many of the current challenges faced by organisations. In a recent discussion with a senior executive client, they wondered whether executive bonuses were causing organisations to draw value from the market rather than add value to it. Incentive systems that favour shareholder and executive rewards over customer outcomes are central to the Royal Commission inquiry.

Accelerated cycles and a greater emphasis on extrinsic motivators such as short-term incentives may blind leaders from focusing on a bigger picture of success and the consequences of short-termism. The impact is that many businesses and their leadership teams continue to demonstrate lack of foresight, forward planning or consideration for things that fall outside of the ordinary.

How can we enable a deeper conversation between companies, investors and shareholders about what level of short-term economic sacrifice can be reasonably made in the spirit of long-term, responsible success? How can organisations hold the WHOLE business cycle, putting in place actions that are meaningful in the short, medium and much longer term?

The cult of busy-ness

The cult of busy work and an overemphasis on doing rather than being often results in a lack of self-awareness or awareness of the consequences of individual actions and decisions on the greater whole.

Without due care, the quest for greater business “agility” can lead to a whole lot of the wrong things being done more quickly. True business agility and adaptivity enables ongoing learning and reflection which is impossible without slowing down and considering deeply, before moving into action. Rather than taking time to slow down and examine the actions we are taking, many are living an unexamined life and as a result, are not developing as whole human beings.

The cult of busyness and overstimulation is also creeping into our kindergartens. Far from the time to dream, play and explore that may have existed for children in previous generations, many of our children are overstimulated and over-scheduled. When the capacity for creativity and reflection is discouraged in favour of outcomes and activities we live half-lives. It’s no wonder we have a rise in anxiety and depression.

Time in nature is replaced or overwhelmed by times in front of a screen and as a result, scientists are seeing physical changes in our vision. City and busy living are reducing our peripheral vision and we wonder what other impacts this narrow focus is having and will have.

How can we build rhythms into our lives that incorporate the time and space for reflection, solitude and regeneration? What would need to happen so that value and priority is placed on these activities as part of a much larger cycle of growth and sustainability?

How were these conditions created?

It is apparent that we as a society have created each and every one of these conditions. While we may have reaped many benefits from our modern systems and ways of living, there is also a dark side surfacing in the destruction and erosion of human values, conscience and compassion.

It is easy to understand why so many succumb to practices that allow for the dark side, when the assumptions and agreements which are the cause of these remain unquestioned.

An alternative way

In the same way that we have created these conditions, we also have a choice in how we respond to them. The choices we make will determine what kind of future we create. Without time spent developing our conscience, thinking critically, examining our long-held agreements and assumptions we are limited in our choices by the level of consciousness that created the systems we exist within.

As Einstein observed, “We cannot solve our problems with the same level of thinking with which we created them.”

The solution to enable us to navigate our way through these current challenges is to upgrade the way we think and make decisions. This requires focus and time to question our current systems and experiment with new ones, to develop ourselves, to breathe, to reflect and to respond intelligently.

Organisations across all sectors have a crucial role to play in enabling society to evolve beyond the constraints we have placed upon our 21st-century selves. We wonder how different the outcomes for customers in the financial services industry may have been if organisations took the time to do this.