April 19, 2015

Ethical leadership and innovation

Ethical leadership is a fundamental pillar for organisations. Specially if a goal of this organisation is to innovate, and today this is a requisite of survival for any organisation, both in an incremental and a disruptive manner. Hence, we could take it a step further and state that ethical leadership is necessary for survival. It doesn’t surprise me now when I remember that the Google’s motto, of one of the greatest large corporations in terms of innovation, is “Don’t be evil”. At first ethics and innovation might seem a bit detached but the research is quite convincing. Let’s quickly go through a few examples:

Research shows that managers that are perceived as ethical leaders protect the employees rights through respect, dignity and autonomy. When this takes place, employees feel empowered and satisfied, and reciprocate by doing more for the organisation. Leaders that encourage their employees to participate in decision making, and who treat them with fairness, create an organisation of engaged and committed employees. This makes employees go the extra mile to find an innovative solution even if a previous one already exists.

Naturally, we trust more those who we consider to be ethical. Ethical leaders achieve a stronger level of trust among employees and between the manager and his team. Employees see through their managers actions that there is a set of values and behaviours that brings the group together. This creates an atmosphere where employees feel safe and confident enough to challenge the status quo and voice their opinions. It also leads employees to feel that their work is important to them, as the goals and values of the group align with their own. Their motivation is boosted, specially if the organisation’s goals are self transcending (making a better world) vs self enhancing (getting a raise), which once again is strongly linked to ethical behaviour in a teleological sense. Motivated employees that voice their opinions without fear leads, once again, to innovation.

Ethical leaders also inspire and therefore are trusted and followed. Only an organisation with ethical managers can transmit a shared vision that employees believe in. Without them, the vision will be a common joke among employees or at best empty words for marketing. A shared vision is an excellent lubricant to keep an organisation working smoothly in a common direction with an atmosphere of trust, which once again, triggers more interaction among employees with a common goal, and a larger degree of autonomy, which leads to… Innovation!

Ethical leaders care for their employee’s development. They are not just means to an end. They tend to encourage them to take the trainings that best fit their needs and help them develop their expertise. As a result, employees feel more competent and are confident to take more responsibilities which triggers a positive cycle of growth. This will ensure a future middle and top management that developed as ethical leaders, and voilà, the cycle goes on.

The level of innovation is defined by the organisation’s ability to use their intellectual capital. The goal is to create further knowledge by using the full potential of the current one. Ethical leadership is a good place to start, and strict job descriptions, excessive reporting, tall hierarchical pyramids with micromanagement practices and additional quality and controlling departments don’t help organisations use their potential. It’s waste.

Ethical leadership and innovation

Author: C. Criado-Pérez #

Further reading #

Now read this

Behavioral Economics and the Emergency Order Fee