Teaching Students to Lead With Their Consciences

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Tuesday, August 3, 2021
By G. Richard Shell
Photo by iStock/fizkes
Let the “ethics refugees” in your classrooms help you teach purpose-driven leadership.

As a senior member of the faculty at the Wharton School at the University of Pennsylvania in Philadelphia, I have noticed a new pattern emerging from the discussions I have with students in my required MBA course on law, ethics, and responsibility. More students are telling stories about quitting their last jobs to escape toxic work cultures that they felt powerless to change. So many of my students are sharing these experiences that I now have a name for them: “ethics refugees.” For these students, business school doesn’t just offer a chance to accelerate or switch careers. It’s also a place where they can double down on their commitments to their core values when they choose their next employers.

I have my theories for why I am hearing more of these stories now than in the past—and why I expect to hear even more as more members of Gen Z enroll in our MBA program. But my reason for highlighting this trend here is pedagogical. If we can coax more ethics refugees to speak up, their stories offer powerful examples about the vital importance of values-based, purpose-driven leadership.

What better way to demonstrate the benefits of positive office cultures than to hear firsthand what it’s like to be a victim of negative cultures that drive the best people out? This insight helps students understand why skills in negotiation, persuasion, ethical sensitivity, and conflict management—not to mention an appreciation of a manager’s legal obligations—are essential for purpose-driven leaders. Positive workplaces do not just happen. Someone must create them by setting the right standards and fighting to ensure those standards are protected and followed.

Stories From the Front Lines

Here are just a few of the stories my students have told their classmates recently, with some details changed to protect their privacy:

  • After college, a young woman landed her dream job in marketing within the sports and entertainment industry. However, she soon was subjected to sexual harassment on an almost daily basis. Her last straw occurred about a year after she was hired, while she was attending a firm dinner to celebrate a successful product launch. A powerful client seated next to her in the restaurant repeatedly slipped his hand over her knee , even as she brushed it off. She finally had to switch seats with a young male colleague. She later reported this to her boss, who responded with a shrug telling her, “He’s an important client. Nobody got hurt.” At that point, she began applying to business school with the goal of working in a different industry.
  • A sales employee at a high-tech startup succumbed to pressure by the firm’s founder to create a list of fake clients. The founder wanted to reference this list, complete with orders from these “customers,” in pitches for venture funding. The student never felt the same about his boss or the work. He applied to business schools in hope of starting his own firm based on his core values.
  • A private equity analyst watched as one of the firm’s partners, her boss, blatantly misrepresented the value of several companies in the firm’s portfolio. The partner wanted to conceal the true state of these poor-performing assets from prospective investors while the firm raised a new round of funding. A week after the new funds were raised, the partner downgraded the value of these companies. Permanently turned off to private equity, this student came to our MBA program to prepare for a finance career in a more socially minded sector.
  • A young lawyer at a large, high-powered law firm found herself repeatedly bullied and intimidated by a senior partner, who sought a legal opinion approving activities that were, in her mind, in clear violation of the Foreign Corrupt Practices Act. She stood her ground, but the resulting angry tirade could be heard throughout the office. She walked out of the office and never returned. She came to business school hoping to find more ethical cultures in business than she had endured in “big law.”

The assignment that prompted these stories comes midway through my course and will be familiar to those who have read Mary Gentile’s book, Giving Voice to Values. Students must write a short paper on two “tough moral or ethical conflicts” they have experienced at some point in their lives. In the first example, I ask them to describe a situation in which they pushed back against pressures to compromise their values; in the second, I ask them to share a conflict they backed away from but now wish they had handled differently. As you can see from the examples above, both kinds of stories can end in decisions to seek work in more ethical organizational cultures.

Our Students Are ‘People of Conscience’

Even without ethics refugees in the class, this exercise reliably helps me make three key points that tie in with effective leadership. First, it helps students understand that moral conflicts at work are common, not exceptional, when they hear these “everybody does it” cases of expense-account abuse, demands for analysts to pad client reports with made-up data, and regrets about enduring sexist jokes during all-night work sessions.

Indeed, some students realize that they have stopped seeing these conflicts as problematic at all. “What’s wrong with cheating on expense accounts?” some ask. “Especially when you are underpaid?” Others then step in to tell stories about people being fired for similar behaviors.       

Second, as we dive into the origins of major corporate scandals, the exercise shows students that large-scale wrongdoing by high-level managers is made possible in part because lower-level employees are willing to look the other way. That said, the ensuing indictments seldom spare lower-level employees who are complicit in conspiracies.

Students do not have to embrace the fraught role of whistleblowers to do the right thing at work. They just have to remember that every step down the wrong road makes it a longer journey to get back on the right one.

Finally, it reinforces my efforts to remind them that they are what I call “People of Conscience.” I argue that they do not have to embrace the fraught role of whistleblowers to do the right thing at work. They just have to remember that they know right from wrong and that every step down the wrong road makes it a longer journey to get back on the right one.

Virtue, like exercise and diet, is a habit of action, not a state of being. As theologian C.S. Lewis, the author of the classic Chronicles of Narnia books, memorably put it, “Good and evil both increase at compound interest. That is why the little decisions you and I make every day are of such infinite importance.”

But there is another idea I hope students will note: Exactly what People of Conscience should do after they observe wrongdoing isn’t just a matter of morality—it’s a matter of organizational strategy. Effective People of Conscience own ethical problems and then use their influence, negotiation skills, and conflict management skills to seek solutions.

All this is well and good, but as students began sharing their “I quit” narratives in my classroom five or six years ago, I realized that their stories provided a bridge to a larger point about committing to purpose-driven leadership as a professional mission. These twenty-something students escaped to graduate school when they found themselves in morally offensive workplaces. But they can play that card only once. Going forward, they must rally others who will stand and fight with them to create the ethical cultures they want.

Becoming Part of the Solution

After these ethical refugees share their narratives, I offer some bad news and some good news. The bad news: The ethical problems that gave rise to their “I quit” decisions will inevitably crop up again no matter where they work. Sexual assault and harassment, bullying, and conflicts of interest are not the exclusive preserve of any industry. Nonprofit organizations can be just as corrupt as for-profit firms.

The “2021 State of Ethics and Compliance in the Workforce” survey by the Ethics and Compliance Initiative (ECI) revealed that 63 percent of middle managers and 51 percent of top managers reported being pressured in the last year to compromise their organizations’ ethical standards. These figures are all-time highs for the past decade. Similar numbers of respondents witnessed unethical and/or illegal conduct by colleagues. Meanwhile, fewer than 20 percent of employees reported that they worked within “strong ethical cultures.” In fact, 79 percent of employees told researchers that when they reported wrongdoing (which most had done at least once), they experienced some form of retaliation.  This figure was also an all-time high for the ECI survey.

The testimony of ethics refugees vividly illustrates the pressures that drive the best people out of unethical business units. Our students can apply the skills they learn in business school to turn toward rather than away from ethical conflicts.

The good news: If my students make it their missions to become ethically grounded, purpose-driven leaders, they can be part of the solution for the people they lead. The testimony of ethics refugees is especially dramatic for this purpose. It vividly illustrates the pressures that drive the best people out of unethical business units. Our students can apply the skills they learn in business school to push back against these pressures; they can gain the confidence they need to turn toward rather than away from ethical conflicts they encounter. 

These students live in an era notable for the value-based social movements that are swirling around the workplace, empowering more people to call out bad behavior. In the wake of the #MeToo movement and the murder of George Floyd, more newly enfranchised voices are speaking out against gender-based and racial discrimination. Sensitized by the pandemic, more employees are prioritizing their personal wellness and rejecting the physical and emotional costs imposed by office bullies and tyrants. There is strength in numbers, and the numbers involved in these movements are vast.

Inspiring Leaders of Conscience

The head of New York University’s business ethics program, psychologist Jonathan Haidt, once famously wrote, “Nobody is ever going to invent an ethics class that makes people behave ethically after they step out of the classroom.” I totally agree. Indeed, I would go one step further: Nobody will ever invent a purpose-driven leadership class that makes people lead effectively after they step out of the classroom.   

That said, I believe we can invent classes that inspire our students to lead purposefully and ethically. It was this belief that inspired me to write a book based on my efforts to help students navigate ethical conflicts at work, The Conscience Code: Lead with Your Values. Advance Your Career. Through that work, I've found that we can extrapolate two things from the stories ethics refugees share with their classmates. First, their personal stories illustrate, better than any example on a PowerPoint slide, the way it feels to work in a business unit that has lost its moral anchor. Second, their stories provide occasions for us to remind all our students, refugees included, that they can be, and perhaps always have been, People of Conscience.   

It remains for them to take the next step: to use their educations after they return to the tough, morally ambiguous place we call “the office.” It will be up to them to become purpose-driven Leaders of Conscience who accept the challenge of creating positive workplace cultures where everyone can thrive. 

G. Richard Shell
Thomas Gerrity Professor, The Wharton School, University of Pennsylvania
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