Setting the tone at the top

When I first came across the term “setting the tone at the top” I was completing a Master’s degree at George Washington University and studying issues relating to organisational behaviour. Setting the tone at the top is an area of organisational science which deals with how the behaviour of employees in organisations is influenced by the tone that the leaders of those organisations set - in other words, staff behaviour is shaped by the values, principles and systems the leadership of the organisation put in place to guide their employees and the kind of ethical climate that is created. The tone set at the top forms the foundation for the organisation, and determines its culture, norms, and behaviour. While studying this issue I reflected on my time as an elected politician in my home country, and I could see strong parallels between how the tone set by private and public sector leaders impacted on their organisations. In fact, I started to think that the tone set by public officials and political leaders often had a much more far-reaching impact not only on the behaviour of public sector workers and party supporters, but also on the very performance of the country. Let us look at a few examples of what it means to set the wrong tone at the top in both the public and private sectors, and some of the consequences. I will start at home. In February 2003 the Government of Jamaica was seeking to negotiate an agreement with public sector workers to accept small (approx 3%) wage increases. The country was in a crisis – public sector debt was 140% of GDP, public spending had to be cut drastically, and a range of other austerity measures were needed. As part of this effort, the government wanted to negotiate minimal wage increases for public sector workers. But, during the negotiations the workers and their trade unions found out that Members of Parliament had already granted themselves significant wage increases of over 100%. It was also disclosed that the government was ordering new luxury 4-wheel drive vehicles for senior officials and MPs. Workers dug their heels in and fought the government - they would not accept austerity when leaders were not prepared to do the same. The wrong tone had been set at the top. A more recent case: a few weeks ago the Romanian Parliament tried to pass new decrees that would decriminalise certain types of corruption. The measures would effectively halt investigations into pending corruption offences against senior government officials, and free some officials already imprisoned for corruption. Mass riots resulted and led to the resignation of the Justice Minister. Government was attempting to set the wrong tone at the top. Last week we saw another interesting example in the USA with the new President using his office and the official Presidential twitter account to defend his daughter in a private business affair involving Nordstrom. The tone set by the President was quickly adopted by his Press Secretary and his Senior Advisor. The latter, Kelly-Anne Conway, went as far as to go on national television in her official capacity and encourage people to purchase clothes from Ivanka Trump’s clothing line - an ethical line crossed by the President was quickly crossed by his senior advisor. From the private sector, we can also look back at Citibank during the midst of the 2008 financial crisis. While the company was negotiating a $45 billion bailout from the government (aka taxpayers), it was continuing the process of buying a $50 million new private jet for its executives! We see another example in the collapse of the 168-year-old News of the World newspaper in the UK a few years ago. The management of the organisation showed no regard for ethical conduct, which meant that other leaders, managers and staff had no incentive to act ethically. Ethics was not part of any reward or remuneration structure within the organisation. Staff therefore acted unethically and the company collapsed. Enron also comes to mind. The point of all this is that leadership requires public and private officials to set the right tone. This is key to shaping the way supervisees and workers behave. As Lisa Quast wrote in a Forbes December 19, 2011 article on “How To Prevent Poor Ethical Decision-Making,” “One of the most important steps to leading ethically is to act ethical. Working for a boss who behaves unethically engenders little to no respect from the manager’s direct reports. Further, employees may “be tempted to rationalise their own unethical conduct when they see their leaders acting unethically.” If people do not see their leaders acting ethically, they will not have any incentive to do so either. Leaders must lead by example; they must establish ethical and values-based organisational norms. Leadership is not only about generating performance, it is also setting the right tone - promoting tolerance, integrity, honesty, respect, etc. We know that many companies and many countries continue to grow with unethical and corrupt leaders at the top. But if history is anything to go by, then sooner or later the chickens will come home to roost. They always do. The writer is a development consultant and owner of Forrest Jackson Relocation Services.

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Setting the tone at the top