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The Leadership Illusion: Are You As Ethical As You Believe You Are?

If you were the Chief Executive Officer (CEO) of a networking and cybersecurity organization and you learned about employees who were knowingly utilizing third parties to pay bribes to government officials, what would you do if such payments clearly violated Canada’s Corruption of Foreign Public Officials Act (CFPOA)? Would you turn your head and allow the practice to continue as long as the payments brought in significant revenues? More likely, you would choose to end the practice immediately. Yet, if you were the leader of your organization and had to make such a choice, the decision you think you would make is not likely to match the decision that you actually would make.

The previous statement is certainly not meant to detract from your integrity or ethicality, but rather, it reflects how your brain operates in ways that we don’t always consciously recognize, especially as you move up the organizational hierarchy. It has been estimated that approximately 95% of your daily decisions are made automatically and without conscious thought. Before you go any further in this article, take a moment and think about how you would answer the following questions:

  • Do you rank in the top 10%, top 25%, top 50%, or the bottom 50% when assessing your leadership ability as compared to your organizational colleagues?
  • On a scale of one to ten with one being absolutely unethical, ten being absolutely ethical, and five in the middle, rate your own ethicality on this numeric scale.

How do you think that your colleagues and executives would have answered those questions? The case highlighted in the first paragraph involved a Juniper Networks, Inc. senior manager who learned about a secret slush fund that was being used by employees to facilitate bribes that earned government contracts yet did nothing of substance to stop the illegal behavior. If posed the same questions about leadership and ethicality, how do you think the senior manager would have responded?

Organizations spend millions of dollars each and every year on leadership and compliance efforts, yet despite the substantial investment, reports of unethical behavior emerge frequently. Typically, the excuses provided for such leadership and ethical failures involve the bad seed or the deviant employee, but if you were to dig further, you might find that the people and the leaders who committed the unethical transgressions were very similar to you. Illusory superiority is your natural tendency to rate yourself, when compared to others, in a much more favorable way than what may be true. Participants in one of our leadership development classes are asked this question and told to move to the designated corner of the room that matches their response.

Statistically, there should be half of the people in the corner of the room identified as the bottom 50%, but how many participants do you think would actually walk to that corner? There have never been more than just a few.

As you think about your answer to that question, is it possible that illusory superiority can or has affected you? Confidence is an important part of being a leader, but as you gain power and prestige in an organization, there are deleterious effects that occur to your leadership, including overconfidence. By the time you become an executive leader, research has shown that you will become very overconfident in your judgments, your risk acceptance, and in your decision-making. Therefore, what may seem to be an easy ethical decision as you look at it from your perspective could easily be different from the perspective of someone who has a vested interest in the decision outcome.

Max Bazerman and Ann Tenbrunsel, in their book “Blind Spots: Why We Fail to Do What’s Right and What to Do about It”, introduce a concept they refer to as the “Want Self” and the “Should Self.”

“The “Want Self” describes the side of you that’s emotional, affective, impulsive, and hot-headed.”

In contrast, your “Should Self” is rational, cognitive, thoughtful, and cool-headed.” As much as you like to believe that your decision-making is rational and thoughtful, emotions and impulse play a significant role. “When time comes to make a decision, our thoughts are dominated by thoughts of how we want to behave; thoughts of how we should behave disappear.” The “Want Self,” in conjunction with illusory superiority, often leads to bounded ethicality, the tendency for organizational pressures and psychological processes to cause us to engage in ethically questionable behavior that is inconsistent with our own values and preferences.

Illusory superiority also causes you to overestimate your ethicality. In the second bulleted question, you answered at the beginning of this article, did the number you picked to represent your ethicality go below a seven? If not, you would be the same as approximately 99% of the people who are asked this question in one of our ethics courses. In a matter of minutes, the interactive session provokes enough self-assessment that the participants realize they are not nearly as ethical as they believe themselves to be. What allows you to overestimate your ethicality is your ability to rationalize your decisions.

If you were to think about a time where you said or did something you regretted, can you recall the conversation that occurred almost instantaneously in your mind after the mistake? As soon as you thought about how you shouldn’t have said or done whatever it was, the word “but” was inserted into your thoughts followed by your rationalization/ justification. When you or your followers deviate from ethical or compliance rules, your brain will automatically start to produce the excuses you need in order for you to maintain the belief that you are an ethical person. A leader who understands how easily people can rationalize their behaviors can pursue a more active approach when attempting to create an ethical organizational culture.

One of the methods your brain uses to alter and transform the dimensions of your decisions is through the use of euphemisms, a mild term used in place of another word that could be considered offensive or abrasive. Instead of paying a bribe to a foreign official, you offer a “grease payment.” Instead of intentionally lying about something, you are providing “alternative facts.” Euphemisms have long served as a means for you to camouflage decisions, behaviors, and thoughts which make you and your followers uncomfortable. “Euphemisms send a powerful informal signal about an organization’s values to its employees: As long as you disguise and hide your unethical behavior, we will accept it, and indeed even encourage it.” (Bazerman, M. & Tenbrunsel, A., 2011).

In order to improve your ethical leadership, being consciously aware of the power of euphemisms can lead to deeper discussions to determine the true context of their origin. For example, when you hear a follower use a euphemism in conversation, you could engage the follower in a more nuanced discussion to see if you can determine the reason why your follower chose to deploy the softer language. Simply hearing a follower use words such as collateral damage, creative accounting, and the like can give a clear indication of discomfort in the follower’s actions, decisions, and/or behaviors. Likewise, taking the time to self-assess when you catch yourself deploying euphemisms can also lead to important discoveries about your true feelings, behaviors, and thoughts.

Another common technique to neutralize and rationalize unethical behavior in organizations is referred to as social proof, a psychological and social process for copying and adopting the actions and behaviors of others as social norms. If you think about the very first day you arrived in your organization, do you remember looking to others to see how you were supposed to dress, talk, and behave? Social cues from other organizational members, especially leaders, sets the tone for others and informally gives direction on what is or isn’t acceptable behavior within the organization. “Carrying messages that are heard but not seen, informal cultures represent the unofficial messages regarding ethical norms within the organization. It is through informal mechanisms that employees learn the ‘true values’ of the organization.” (Bazerman, M. & Tenbrunsel, A., 2011).

If you contrast the Juniper Networks, Inc. case with a recent CFPOA filing against Imex Systems in Toronto, the leaders in that organization self-reported the bribery payments of their employee. When the executives of IMEX Systems chose to self-report, there was a message sent to the employees about tolerance for unethical acts such as paying bribes. If you were an employee of IMEX System’s or Juniper Networks, Inc., what kind of message would you take from either company’s action/inaction and how would it affect the formal and informal culture of each organization?

Employee goals are another method where leaders can influence the ethical behavior of the organization. While goals are certainly useful in establishing and measuring expected performance for your followers, leaders who create vague and unclear goals could inadvertently lead their people down the slippery slope. “Architects of reward systems often fail to consider how efforts to accomplish a target goal will cause decision-makers to ignore ethical problems in other areas.” (Bazerman, M. & Tenbrunsel, A., 2011). Leaders who ignore these indirect effects can cause their followers to fall victim to the false consensus effect, your tendency to overestimate how acceptable and common your own behavior is in a society.


Nazir Karigar was a Canadian citizen employed by Cryptometrics Canada who was trying to obtain a $100 million security contract with Air India and was convicted of violating the CFPOA. During his trial, Karigar presented the defense that it was commonplace to offer bribes in India. The allegation of bribery as a cultural norm is an example of how bounded ethicality and the false consensus effect can directly lead to unethical behavior. By framing his decision to bribe government officials in the context of “everyone is doing it”, Karigar saw his decision as standard behavior within the society, when the inverse was true.

Salespeople are frequently tasked with contradictory goals; generate a certain amount of sales while also acting in accordance with compliance procedures. When people face competing goals, it causes stress, which allows rationalizations that mute ethical obligations. “The rationalizations not only facilitate future wrongdoing but dull awareness that the act is, in fact, wrong. Indeed, if the rationalizations become a shared resource in the organization’s culture, they may pave the way toward defining the practice as ‘business as usual’ – the way things work.” (Vikas, A. et al.). Organizations and leaders that openly clarify their stance on unethical behavior such as corruption and follow that clarification with appropriate action lessen the chance that the informal culture will send the message that “business as usual does not include bribery or other unethical behavior.

If you are like others, you probably have underestimated the difficulties of being a leader. You, although we don’t like to admit it, are equally capable of rationalizing unethical behavior as anyone else. In order to fight against the natural reactions to increased organizational power such as overconfidence and illusory superiority, understanding your tendencies to overestimate your abilities and your ethicality can lead to decisions and behaviors you never imagined nor intended. Your integrity is only as good as your actions and whether you realize it or not, your followers are watching… and learning.

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