Tuesday, August 7, 2012

Errors, Midjudgments and Dishonesty- "Lessons from Locksmiths"

"Locks don't protect you from thieves.  A professional thief can get in your house if they want to.  Locks only protect you from mostly honest people who might be tempted to try your door if it had no lock."  The locksmith Dan Ariely quotes in "The Honest Truth About Dishonesty" goes on to assert that "1% of people are always honest, 1% are always dishonest, and the rest are honest as long as the conditions are right".

This dark assessment is at the heart of Ariely's book about dishonesty.  His core theory, backed up by multiple experiments, is  that our behavior is driven by two opposing motivations. First we want to be viewed as honest , honorable people.  Second we  want to get as much as possible out of any situation, which often leads to cheating.  Along the way he addresses the Simple Model of Rational Crime(SMORC) which is simple weighing the benefit of the offense against the likelihood of getting caught and the penalty for getting caught.  All of his research and experiments lead to the conclusion that "cost benefit forces often do not drive dishonest behavior.  Longer prison sentences and more police don't necessarily lead to less crime."

He explores such varied settings as hourly billing by lawyers, writing time to projects in consultancies, golf, university honor codes, filing taxes, fishing, story-telling, creativity, and the effect of wearing counterfeit designer merchandise.   I found his section his section on conflicts of interest..."Blinded by Our Own Motivations"  particularly important and relevant in the business setting.

One important conclusion on the positive side is that when we are reminded of ethical standards we behave more honestly.  Those reminders are especially important when they are provided "close to the moment of temptation."

It is easy enough to say that a company's values...honesty, integrity and respect for people...it's business principles... and its code of conduct are important. The consequences for violations should be severe. It's also important to note that there are shades of grey below the level of egregious misconduct.  People need to make the right choices over and over in the face of ambiguity and mixed messages.  It reinforces the idea that ethics training needs to be frequent, customized to the circumstance and embedded in all formal leadership curricula.  Great leaders create an environment....and structure to provide "reminders" close to the moment of temptation where those right choices can be made.  Most importantly, great leaders model ethical behavior in all their decision making....they lead by example.

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