Is "Business Ethics" an oxymoron? No. Commercial performance and ethics are by no means incommensurable -but they ask fundamentally different questions. Ethics is about choosing whither to go - how to grow, and why. Performance is about progressing towards a chosen destination in the most efficient way possible, adapting to obstacles and opportunities along the road.

Good leadership depends on the "multiplication" of both factors: Good impact = Energy * Ethics.

Sadly, if the second term is barely "net positive", we won't get anywhere any time soon, however much technological or human "performance" we bring to the table. And if it turns negative, we are in big trouble. Back to the old adage: if you're on the road to hell, don't go faster! But the reverse is also true. If organisational ethics is only about compliance and abstract bureaucratic rules, it quickly dampens the energy in an organisation. Hence, our challenge is to unleash positive motivation "for the good".

That is not easy. We are quick to conflate the terms "change" (non-directive adaptation) and "transformation" (a purposeful change in values and our capacity to see and interact with the world). These are not the same thing.

From Agility to Excellence

In fact, much of today's "new" management wisdom still focuses on "agility" - the practice of taking small iterative steps to learn-by-doing, rather than creating ambitious and complex multi-year plans and projects that require rigid central steering and often prove unsuccessful if early assumptions are incomplete, incorrect, or subject to change.

However, this way of looking at management almost exclusively focuses on "external" complexity and seeks to develop internal adaptiveness. Change is king - it is assumed to be necessary and intrinsically valuable. That might sometimes be true, but certainly cannot be universally assumed. Not all change is "good", even if a customer might want it, and not always is a capacity for "reactivity" or "resilience" the optimal choice for interaction between an organisation and its environment. Often, we must "stay our course", or proactively promote longer-term changes that enable the organisational ecosystem to develop its highest potential. This requires a shift from agility towards excellence.

STEP 1: From Vision to Wisdom

What is notably missing in the notion of agility is the desire for continuous and deeper "triple loop" learning: the ability to reflect not only about our methods, i.e., what tasks we are required to achieve a certain outcome, but also about how we are practicing our tasks together; and who we are becoming through our work.

Organisational transformation is not just about new strategic visions or polaroid purpose statements. And not even about implementing the "agile manifesto." It is about seeking to become our collective best in the flurry of daily work.

This requires the capacity to stay close to an organisational "source" of value and identity, throughout an endless stream of small and large judgments, decisions, and actions. We cannot simply adapt to circumstances, but must continually inquire and experiment how to square the circle of existential interests: between our corporate self (viability and profitability), our stakeholders (development of the potential of all organisational constituencies), and the needs of society and planet as a whole. Rather than just agile retrospectives to prioritise backlog items, we must enable wise decision-making through appropriate education, governance and reflective spaces: transformation needs time, process and clarity of who we are.

STEP 2: From Agility to Virtue

Keeping close to a set of values is simple in small organisations or independent teams, but it quickly gets complicated when we try to scale wisdom "at the edge" of large and complex, decentralised organisational systems. Local teams or unit leaders must develop "excellence": the capacity to make effective choices in the face of contingent risks and opportunities, whilst at the same time maintaining global integrity. This requires expertise, virtue (a practiced commitment to shared values), and organisational citizenship: knowing when to act in isolation, when to seek advice, or when to pass the decision on to someone else with a better view from a different vantage point.

But, of course, organisational excellence is not only an individual capacity - it needs to be institutionalised through structures, practices, policies and goals, and embedded in heedful communities. Relevant information and support must be available throughout the business, so that people can act with both freedom and responsibility.

The End of Agility

Thus, the difference between organisational excellence and agility is evident. Whereas the "end" of agility remains instrumental - seeking to maximise organisational energy and performance simply to exceed the budget - excellence is intrinsically developmental. Where agility aims at "mechanical" adaptation to the uncertain tides of an ever-changing external environment, excellence seeks to develop capable sailors who face the waves of work wisely - sensing when to yield to the currents and when to stay firm, and using every tempest as an opportunity for growth, for the sake of collective flourishing.

Why is business ethics no oxymoron? Simple. The crux is that both terms are not distinct. Ethics is IN business, not OF business. Good leadership ensures that markets and all the tools of the (management) trade fully support the societies we live in. Excellence is not an quarterly accomplishment, but an existential commitment to act in the spirit of humanity. The budget is in our hands, but the goodness is in every action.

#leadership #goodorganisations #strategy #leaders #transformation #agile #hr #organisationalchange #philosophy #business