Thursday, January 15, 2009

The ethics of loyalty

Being loyal to those who pay your fees is not always ethical and for project managers there are times when conflict of interest situations can become quite tricky.
I was talking with two of my MBA students last night and one of them posed me a question about an ethical dilemma he was facing. He asked a simple question:
‘When there are conflicts on a project where should your loyalty lie?’
‘That’s simple’, I replied, ‘your ultimate loyalty is to your customer's shareholders. As a professional you should be looking to supply the best possible solution for your customer, your decisions and influence should be directed accordingly. ’ But then came his second question:
‘But who is my customer? I work for a consulting company that supplies services to the end customer, for whom I am managing the project. Should I be loyal to the shareholders of my employer (the subcontractor) or to the shareholders of their customer?’
The situation (simplified) was that the sub-contractor (his employer) was asking him to play a more active role in ‘bigging up’ the client’s problem; increasing the risk evaluations to create a sense of criticality and to supply a technical solution that would require more services and hardware than might otherwise be needed.
For me, it is still a simple issue: As PM for the end customer, his professional code of ethics should motivate him to advise the end customer as he sees fit and he should not be influenced by the bias of his ‘immediate’ bosses. But I know that this is easier said than done, especially for employees of subcontractors.
I am curious to hear other people’s opinions and stories.
At The Bayard Partnership, we like to pride ourselves on the fact that aim solely to deliver the solution our client's actually need. The solution that ultimately delivers the best share value. Partly because of this, we prefer to supply our services directly whenever we can, or at least via other suppliers that share our fundamental philosophy and principles.
In times of recession the temptation to motivate consultants and PM’s to extract as many man-hours from the customer as possible, may become too big to ignore for some contracting companies, especially those solely focused on short-term profitability. I like to think this is not the case but experience tells me otherwise. Many are afraid of losing revenue and falsely feel that by dragging events out, somehow they will get through. nothing can be further from the truth. In times of recession we need to deliver value for money. Neat solutions to complex issues. Quality, honesty and succinctness will seperate the the long term players from the charlatans.

1 comment:

matthew said...

I came across a model, which is very useful in answering the question whether a political act, like the one described (to influence the client in such a way that he is going to spend more money on you as a consultant then necessary) is ethical or not? In short, this model works as follows:

First question: Is the act acceptable according to the following ethical criteria:
- Utility: Does the act optimize the satisfaction of all constituencies?
- Rights: Does the act respect the rights of the individuals involved?
- Justice: Is the act consistent with the canons of justice?

If yes, than the act is ethical.

If no, the second question: Are there any:
- Overwhelming factors? (refers to any aspect of the circumstances that would justify setting aside one or all of these three ethical criteria)
- Double effects? (refers to the situation that the negative outcomes become acceptable if the dominant purpose is to achieve the positive outcomes and if those outweigh the negative outcomes)
- Incapacitating factors? (refers to the possibility that the decision maker may be unable to apply these three ethical criteria)

If yes, than the act is ethical.

In the described case, it’s evidently that the answer to the first question in relation to utility and rights is no and that the one to the second question in relation to all three is as well no. Therefore, the act was unethical.

I have experienced myself a related situation. In fact, my CEO pushed and forced his ideas (changing our selling behavior) upon an advisor and he used the advisors report in support of his ideas to convince the company. In the beginning, the advisor must have asked himself whether to go through or not? In fact, he delivered in the end the goods. The report was clearly in support, but in my opinion he must have found reasons to believe that the answer to the first question was yes anyway.

For more details see: Power, Politics, and Organizational Change, written by Dave Buchanan & Richard Badham.