Ethical Issues in Leadership

 “Perception is more important than reality. If someone perceives something to be true, it is more important than if it is in fact true. This doesn't mean you should be duplicitous or deceitful, but don't go out of your way to correct a false assumption if it plays to your advantage.”

Ivanka Trump
The Trump Card: Playing to Win in Work and Life

This is a statement with which we both agree and disagree. If you look at our "Performance Model", it is based on the assumption that the upstream processes of filtering, translating, and connecting are essential to defining the reality to which we respond. In that sense, your "perception" is the "reality".

Whether your reality matches either someone else's reality of the same situation or what some describe as "objective reality" is another matter. The fact is that your perception is crucial to what follows (judgments/decisions and actions).

The Ethical Question

First, I would never make such a statement.

Why not?

It has to do with outcomes. The notion that the main criterion is "if it plays to your advantage" may apply to poker (which I play), but not to my work.

What's the differrence?

In poker, the goal is to win as much money as possible and everyone is playing by the same rules. In business, I confess that a lot of the "game" is played with the goal of "winning as much money as possible," but not everyone is playing by the same rules.

For example, if you know that your company's work conditions are unsafe, but a safety audit concludes that it is okay, do you have an obligation to say so? Let's suppose that if you do, the result would be a significant drop in stock price (on which some CEO bonuses are based) and result in large expenditures by the company.

If, on the other hand, you assume that it is "to your advantage" to keep quiet, there may be significant harm to employees include effects that lead to early death. Now, to who's advantage is keeping quiet?

Once we decide the reality (for us), we move to the decision/judgment stage which employs our "Criteria" (including values and goals) as the basis for judging or deciding. So if our goal is to win as much as possible in business and to do that we are willing to let you reach or hold inaccurate conclusions as long as they are in the interest of our winning goals, then it is not hard to understand why Ms Trump would feel comfortable making such as statement. It is probably part of the value set of the clan of which she is a part.

We have tried to operate on the basis of the best interests of our clients regardless of the outcome. I don't ever recall a time in which we let an incorrect perception stand because we thought it was to our advantage. We have let them alone when there is repeated resistance to counter information. This suggests, I hope, that the value base on which we operate (outside the poker room) is quite different from the one proposed in the Trump book and shall remain so for as long as we exist.

This brings us to the next element of the topic–confirmation bias.

Confirmation Bias

Dr. Shamran Heshmat describes confirmation bias as follows:

Confirmation bias occurs from the direct influence of desire on beliefs. When people would like a certain idea/concept to be true, they end up believing it to be true. They are motivated by wishful thinking. This error leads the individual to stop gathering information when the evidence gathered so far confirms the views (prejudices) one would like to be true.

Once we have formed a view, we embrace information that confirms that view while ignoring, or rejecting, information that casts doubt on it. Confirmation bias suggests that we don’t perceive circumstances objectively. We pick out those bits of data that make us feel good because they confirm our prejudices. Thus, we may become prisoners of our assumptions.

The explanation above may explain how some people are misled based on their assumptions about truth and reality. Confirmation bias may explain why they remain committed to a decision or position in the face of potential evidence that is contrary to the decision they made or the conclusion they reached.

Suppose, for example, a realtor sold me a house that s/he knew had a defect, but that my inspector had missed. (We once bought a two-story building on which a brick wall came loose and had to be rebuilt. There is no evidence in this case that the realtor knew it, but our inspector clearly missed it.)

After the purchase, I discover that there is a required repair costing thousands of dollars and I have no legal recourse to pursue an action. Now I'm stuck with the purchase. Even though I'm now stuck with an additional investment, when someone asks about the new purchase, I tell them that I got a great buy based on the market. If they bring up the fact that they heard I have a major unexpected repair bill, I still cite the profit I'm going to make after getting the property up to snuff (even if ten realtors would not agree with my estimates of net profit in a reasonable time frame).

Where We End Up

Based on the two scenarios above, we end up in a kind of "double jeopardy" situation. First, we bought the "pig in a poke" without a full and accurate description of what we were buying (but according to Ivanka, it's okay because it was to the seller's advantage). Second, we cannot come to grips with the reality of our decision and its impacts because of our tendency toward confirmation bias.

All of which brings me to the conclusion that (potentially) "no good will come of this."