Monday, June 9, 2014

Skills Recent Grads Need the Most: The Ethical Dimension

Bob Clary, the community manager of Webucator, has asked me to identify and blog about a valuable skill  that recent grads need to succeed. Bob would like to make the job market a less scary place to recent grads of his program, and he's asked bloggers with relevant knowledge to offer advice.  Bob writes this:  "We’re excited about this newest blogging campaign in our Webucator Asks series, and we look forward to reading about creative ways to help guarantee success!"

I decided to do Bob one better and identify four skills to write about.  The four skills that I am covering are ethics, job search, interpersonal skills, and writing.  Interpersonal skills boil down to communication, and communication is the focus of my discussion on that topic. This blog and my next three will cover these skills just as I discuss them with my students.

I start with ethics, the most basic of all managerial skills. Ethics is a competency or skill just like job search, interpersonal skills, and writing. Many students mistakenly believe that there is a dichotomy between profit-making or high wages and ethics.  That is a false dichotomy. Making money is a good, just as honesty and concern for others are goods.  Our job as business people is to balance these and other goods or virtues so that we, our associates, and society, can flourish.

As Warren Buffett pointed out in a talk he gave in the 1990s to MBA students at the University of North Carolina, ethics is much of the reason high achievers achieve.  It is true that in the short term money can be made through dishonesty; it is also true that low achievers can become successful by dishonest means. Look at those who engage in organized crime or in government corruption. They can be successful, although corrupt executives, as in the cases of Enron, Tyco, and Worldcom, pay a high price when they are caught.  Nevertheless, the reason we seek education is to achieve well, not to become drug dealers, confidence men, or thieves. Education is not necessary for such professions.  We achieve well and successfully on an ethical foundation.

The reason the most successful achievers achieve is that they play by the rules of the game. They respect their customers, their employees, their stockholders, and their society.  As society becomes more concerned with the environment, environmental concerns become business concerns.  That is why customers repeatedly return to a firm that produces great products, and that is why society turns to business in times of crisis. One of the great triumphs of General Motors was its ability to convert to war production to assist the US government during World War II.  Without such assistance American victory would have been more difficult, and more soldiers' lives would have been lost to tyrants in Europe and Japan.

Business's products are moral goods because they help many billions of people.  The ability to expand the availability of such goods to ever greater numbers of people is the moral triumph of business.  Making business more efficient and helping business to better meet customers' needs, the mission of recent grads entering the workplace, fulfills a higher moral good. To do so one must rest his or her actions on a moral foundation.

The moral foundation is a set of competencies that students need to identify for themselves.  These likely include what Warren Buffett called the "Ben Franklin virtues" that were identified by his teacher and the inventor of value-based investing,  Benjamin Graham. Buffett calls them the "Ben Franklin virtues"  because Franklin identifies them in his writings in Poor Richard's Almanac and in his 1758 book The Way to Wealth.  Franklin's virtues include honesty, sobriety, hard work, and prudence.  In ancient Greece, 2,500 years ago, Aristotle listed similar virtues--not geared to commercial life, although there is much overlap--as necessary to success.  The reason that there is much overlap between Aristotle's and Franklin's virtues, written more than 2,000 years apart and in different cultures,  is that Aristotle's students aimed to become leaders of the Athenian city state, and the virtues that he describes in his Nicomachean Ethics were geared to success in that ancient society.  These included the cardinal virtues: moderation, prudence, courage, and justice.

Justice, as in Aristotle's day and in Franklin's day, is the cornerstone of ethical competence when working in business. Just as is the case with emotional intelligence, in order to act well we need to develop ethical intelligence. Ethical intelligence means asking ourselves whether an end is justified, whether we can accomplish it prudently, whether we can reduce or eliminate costs or harm, whether we can improve quality or increase the good that we do, whether any harm is more than balanced by the good, and whether our actions serve our colleagues, society, and ourselves.

Many corporations recognize this balance. For example Johnson and Johnson's Credo describes the firm's vision of ethical intelligence in dealing with nurses, doctors, customers, employees, suppliers, and the greater community.  J&J's conclusion is this: "When we operate according to these principles, the stockholders should realize a fair return."  Compare the success of this great firm with that of any of the dishonest ones that have made the news and often no longer exist.

Ethics is the most important competency because all dealings depend on it.  It is the chief recipe for long-term success. Whether we are looking for a job, dealing with the challenges of interpersonal communication, or negotiating an important deal, it is important to ask ourselves whether we are doing the right thing by balancing all considerations in a way that yields an optimal outcome for others, for society, and for ourselves.

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