ETHICAL IMAGINATION, CSR & LEADERSHIP Changing perceptions & Adopting new representations

1. ETHICAL IMAGINATION, CSR & LEADERSHIP Changing perceptions & Adopting new representations Laurent Ledoux ledoux.laurent@gmail.com – 0478 62 14 20 (www.philoma.org)

2. Introduction Moral imagination is the condition for free deeds Rudolf Steiner Ethical decisions form, reveal & test the self John Dewey Do you think you can govern innocently, without dirtying your hands? Jean-Paul Sartre

3. What did Lee Iacoca, CEO of Ford ? What does the 1974 Ford Pinto scandal teach us about CSR?

4. What did M. Toyoda, CEO of Toyota? What does the 2010 Toyota break scandal teach us about CSR?

5. Case 2 – Steve Lewis What would you do if you were Steve Lewis ? Would you go to the meeting or not ? How should you respond if you are offered an opportunity at work solely because of your race or gender? Steve Lewis To attend St Louis meeting?

6. Questions to think «individual» dilemmas – Steve Lewis’ case “How do my feelings and intuition define, for me, the ethical dilemma?” (To respect oneself or to be loyal – loyal to whom?) “Which of the values that are in conflict are most deeply rooted in my life and in my community?” (To consider the dilemma as his parents’ son) Who am I? “Become who you are” (Friedrich Nietzsche) “What combination of expediency and shrewdness, coupled with imagination & boldness, will move me closer to my personal goals?” (To go to St Louis but to participate to the presentation) “Looking to the future, what is my way (not the way of others)?” (To become partner in an investment bank) Source: Badaracco (1997); adapted by Ledoux

7. Variations on the word « Ethics » « Ethos » in Greek: custom, habit, way of behaving in an environment The primary meaning of «Ethos» or «Ethics» has therefore to do with: making your way,positioning yourself in an environment An ethos is the doctrine of a particular art of living the best possible life and the means to pursue this aim (i.e. to live happily or to search for truth) (Marcel Conche, philosopher) Ethics is a human activity. The purpose of ethics is not to make people ethical; it is to help people make better decisions (Marvin Brown, author & ethics consultant) A morality is a set of duties and imperatives (positive or negatives) that a society or a community gives to itself and which enjoins its members to conform their behaviour, «freely» & in an «unselfish» way, to certain values enabling to distinguish right & wrong.

8. Potential sources to support ethical decision-making Codes of conducts & Mission statements Legal duties Moral or ethical principles Heuristics («sleep-test» rules)

9. A framework for ethical theories Individual processes Adaptability & responsiveness Virtue Ethics (Aristotles, Gilligan,…) Development Ethics (Etzioni, Covey,…) Principles “Doing right” Results “Doing good” Deontological Ethics (Kant, Rawls,…) Teleological Ethics (Bentham, Mill,…) Institutional structure Fixity & consistency Source: Fisher & Lovell (2003); adapted by LL

10. If you know it’s wrong, don’t do it! If you’re not sure, ask. Keep asking until you get an answer. The Texas Instrument Ethics Quick Test(2001) • Is the action legal? • Does it comply with TI values? • If you do it, will you feel bad? • How will it look in the newspaper?

11. 12 tests filter to validate or reject a decision Trigger Ask yourself these questions concerning the decision you wish to take +/- Veto Legal duties 1. Legalist test. Is my decision in accordance with the law? Corporate credos & mission statements 2. Organisational test. Is my decision in accordance with my organisation’s rules of conduct or ethics Heuristics 3. Hedonistic or intuitive test. Does my decision correspond with my gut feeling and my values? Does it make me feel good? Respect of ethical principles Virtue ethics 4. Light-of-day test. Would I feel good or bad if others (friends, family, colleagues) were to know of my decision and action? 5. Virtuousmeantest. Does my decision add to, or detract from, the creation of a good life by finding a balance between justice, care and other virtues? Deontological ethics 6. Veil of ignorance/Golden Rule. If I were to take the place of one of those affected by my decision and plan would I regard the act positively or negatively? 7. Universality test. Would it be a good thing or a bad thing if my decision and plan were to become a universal principle applicable to all in similar situations, even to myself? Development ethics 8. The communitarian test. Would my action and plan help or hinder individuals and communities to develop ethically? 9. Self-interest test. Do the decision and plan meet or defeat my own best interests and values? Teleological ethics 10. Consequential test. Are the anticipated consequences of my decision and plan positive or negative? 11. Utilitarian test. Are the anticipated consequences of my decision and plan positive or negative for the greatest number? 12. The discourse test. Have the debates about my decision and plan been well or badly conducted? Have the appropriate people been involved?

12. Cases – Peter Adario What would you do if you were Peter Adario, the head of the marketing department ? What should you do if a single parent on your staff is falling behind in his or her work? Peter Adario To dismiss Kathryn McNeil?

13. Questions to think «internal» dilemmas – Peter Adario’s case “What are the other strong, persuasive, competing interpretations of the situation or problem that I hope to use as a defining moment for my org.?” (To understand that, for Walters, the basic ethical issue was irresponsibility: McNeil’s for not pulling her weight & his for not taking action) “What is the cash value of this situation and of my ideas for the people whose support I need?” (Refine his message and shape it to the psychological & political context in which he was working, in terms of raising productivity or improving recruiting) Who are we ? “Truth happens to an idea. Its verity is in fact an event, an idea” (William James) “Have I orchestrated a process that can make the values I care about become the truth of my organization?” (After hiring McNeil, to start quickly to let her & her work known to his bosses & to campaign for a more family-friendly workplace) “Am I playing to win?” (To take swift actions to counter Walters: While Adario was out of the office, she worked with one of the bosses to swiftly resolve McNeil’s issue) Source: Badaracco (1997); adapted by Ledoux

14. Questions to think «internal» dilemmas – E. Sakiz’s case What would you do if you were E. Sakiz ? What does the RU 486 (1982) case tell us about CSR ?

15. Questions to think «societal» ethical dilemmas – Edouard Sakiz’ case “Have I thought creatively & imagina- tively about my organization’s role in society & its relationship to its stakeholders?” (To orchestrate a public debate among the different stakeholders) “Have I done all I can to secure my position and the strength & stability of my organization?” (To refrain to take decisions that could expose directly The organization or to confront the BoA’s president) Who is the organisation? “Ethics result from the inescapable tension between Virtue & Virtu” (Aristote & Machiavel) “Have you done all you can to strike a balance, both morally & practically?” (To market the new drug without endangering the organization) “Should I play the lion or the fox?” (To organize and support a vote that will trigger a massive counter-reaction from other actors) Source: Badaracco (1997); adapted by Ledoux

16. The 4 orders & the tensions between the individual and the group Spiritualities Metaphysics (secular or religious) Wisdoms * Synthesis based on the texts from André Comte-Sponville, Marcel Conche & François Jourde Ascending hierarchy for individuals possibly induces Ethical order Good vs. Bad (Self, subjective or relative Will) completes limits Moral order Right vs. Wrong (Universal or universalisable duties) limits Juridical & political order Legal vs. Illegal Descending hierarchy for groups limits Economic, technical & scientific order Possible vs. Impossible (Natural and rational Law)

17. Dynamic – What does teach us the Toyota brake scandal ? Laurent Ledoux – 31/03/11

18. The three dimensions of CSR Social Economic Environmental CSR – Static definitions Corporate Social Responsibility The entirety of obligations legally required or voluntarily assumed by an enterprise to pass as an imitable model of good citizenship within a given field (Jean Pasquero) Fair Sustainable Livable Viable

19. Final thoughts – Where do we go? Another way to represent CSR? Biosphere Social sphere Equitable Social Economique Durable Economic sphere Vivable Viable Environnement Laurent Ledoux – 31/03/11

20. Diversity & Interconnectivity Optimal balance Sustainability 100% 0% Towards Brittleness (Too little diversity) Towards Stagnation (Too little efficiency) Optimum Greater efficiency (streamlining) Greater resilience Diversity & Interconnectivity Ulanowicz

21. The infinite Nature, the universe ? Or…

22. The limit is what a generation owes to the next one … the 320,000 light bulbs, equal to the number of kilowatt hours of electricity wasted in the United States every minute from inefficient residential electricity usage (inefficient wiring, computers in sleep mode, etc.), that is 230 million per day. Legendre

23. Motivation • In whose interest & why? • For Share- or Stakeholders? • Marketing opportunism or moral duty? • Power locus • Who drives CSR? • Internally: managers or «corporates»? • Externally: Govs, NGOs or corporates? • Dynamic • How did/does CSR evolve? • Concept’s evolution so far? • Today’s logic in a globalized economy? • Method • How to promote it? • Regulation or self-regulation? • Soft or hard? • Global or Issue-related?

24. Dynamic – How has the CSR concept evolved so far? Content richness of the CSR concept 8 components of CSR nowadays Evolution so far? Citizen participation Proactive «engagement» Performance reporting Triple balance sheet Ethical rectitude Codes of conduct Social responsiveness « Societal management » system Environmental nuisance limit Priority given to the environment Sollicitude Employees’ needs Philanthropy Grants & corporate patronage Efficient management (Technical skills) Time Classical eco. (18th century) Traditional eco. (19th c.) 1960’s 1970’s 1990’s Beg. of 20th c. Beg. of 21th c. Source : Jean Pasquero (2005), adapted by Ledoux

25. CSR Coregulationbased on reputation rather than law ? Frydman

26. Dynamic – How CSR is evolving in today’s globalized economy? Transfer of States’ duties to corporates “Coherency” of the coregulation system Evolution today? Effectively Empowerment of 3rd parties by States & Judges Proliferation through reputation & transparency Highly stylised process*: in reality these trends overlap each other Regulatory innovation process Hard 2003 Nike vs. Kasky Consumers’ CSR concerns legally recognized Growth of surveillance & social controls’ web Voluntary adoption of codes of conducts 2001 Global Compact corporates become world citizens Politization of comsumption Corporates’ emancipation from states «Formally» but self-fulfilling prophecy Soft Time * Source: “Responsabilité sociale des entreprises et co-régulation”, by Berns & al, 2007

27. Optimize value for the under the constraint of an for shareholders whole society adequate return Emmanuel Faber Maximize (without limits) under the constraint of the shareholder’s value respect of the law Milton Friedman

28. Profit is the consequence of the human relation that we develop daily with our shareholders, clients, employees, suppliers and the rest of society Toniutti

29. Collaboration & Organic growth

30. Cradle 2 Cradle Laurent Ledoux – 31/03/11

31. Challenging business models: Product Service Systems

32. Evolution of the relations between capitalism & the dominant ethos Post-capitalist Ethos Rise of the post-capitalist economy Protestant ethos Progressist ethos ? Birth of modern Capitalism Expansion of industrial Capitalism Time Consumerist Capitalism Promotion of a childish ethos According to Benjamin Barber in «Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole», 2007; See also Anne Salmon’s analysis in « Ethique et ordre économique : une entreprise de séduction », 2002

33. LEADERSHIP Mobilize the group for the adaptive work Heifetz Photo: ΠΑΣΟΚ

34. Distinguishingtechnicalproblems & adaptivechallenges Problemdefinition Solution and implementation Primary locus of resp. for the work Kind of work Clear Clear Physician Technical Type I Clear Requireslearning Physician &patient Technical &adaptive Type II Requireslearning Requireslearning Patient > physician Adaptive Type III Source: “Leadership without easy answers”, by Ronald Heifetz

35. Modulating the stress Source: “Leadership on the line”, by Ronald Heifetz & Marty Linsky

36. Adaptive leadership – 5 strategic principles of leadership Identify the adaptive challenge (Unbundle the issues) Protect leadership voices w/out authority (Cover who raises questions authorities can’t raise) Give the work back to people (Put pressure on people with the problem) 5 strategic principles of Leadership Keep the distress level tolerable (Control the pressure cooker) Focus on ripening issues (Counteract work avoidance mechanisms) Source: “Leadership without easy answers”, by Ronald Heifetz, adapted by Ledoux

37. Scope of authority A● B● Adaptive leadership – The politics of change & Going beyond your scope of authority Adaptive challenge Faction Participant Constituencies

38. Adaptive leadership – Nye: effective leadership styles - Soft, Hard & Smart Power skills Smart Power (Combined Resources) • Contextual IQ (broad political skills) • Understand evolving environment • Capitalize on trends (« create luck ») • Adjust style to context & followers’ needs Soft Power (Inspirational) Hard Power (Transactional) • Organizational capacity • Manage reward & information systems • Manage inner & outer circles • Emotional IQ • Ability to manage relationships & charisma • Emotional self-awareness and control • Communications • Persuasive words, symbols, example • Persuasive to near & distant followers • Machiavellian skills • Ability to bully, buy and bargain • Ability to build & maintain winning coalitions • Vision • Attractive to followers • Effective (balance ideals & capabilities) Source: “The powers to lead” by Joseph Nye, adapted by Ledoux

39. The 5 stages of culture Relationshipto People Language Team 5 “Life is great” “We’re great” Stable partnership 4 “I’m great” Personal domination 3 “My life sucks” Separate 2 3 “Life sucks” Alienated 1 49% 4 2 22% 25% From “Tribal leadership” by Logan, King & Fischer-Wright, 2008; adapted by Ledoux 1 5 2% 2%

40. Freedom Inc. Getz

41. Team management principles Inspired by Isaac Getz (Freedom Inc.) Intrinsic equality Personal growth Capacity to self-direct

42. Whyway 1 Intrinsic equality • Open communication • Participation • Diversity Humility 2 • Ignorance’s strength • Transparency • No titles Fairness 3 • Wage gap reduction • Bonus sharing • Open space for all Everybodywantsto take initiatives

43. Exploration 1 • Open trainings • Collective intelligence • Godfathers Personal growth Trust 2 • Risky appointments • Tolerance for errors • Resilience faith Benevolence 3 • Craftsmanship • Dignity • Coherence Everybodyis ableto take initiatives 43

44. Adults 1 Capacitytoself-direct • No rules • No credos • No monkeys Engagement 2 • Common good • Team practices • Societal projects Let go 3 • Loosening follow ups • Distance • Improvisation Everybodyhas the libertyto take initiatives

45. Structure of stablerelationships From “Tribal leadership” by Logan, King & Fischer-Wright, 2008 Marina Olivier Laurent Triad

46. rust your people eward output nderstand the business case tart at the top reat people as individuals

47. On-the-job democracy & The Whyway Breaking down Knowledge boundaries Semler

48. Lao-Tseu, 630 bc. The best leader is the one the group barely knows she exists Awa

49. Listen toyourliberating question Get off the dance floor & on the balcony 1 2 Let go Learndailytorideyourelephant 4 3

50. 1 Listen to your liberating question