4 Warning Signs of Ethical Burnout on Your Team (HBR)

By Richard Bistrong, Dina Denham Smith, and Ron Carucci

(Originally published in HBR. Image: Henrik Sorensen/Getty Images)

Everyone has experienced stress-inducing pressure at work: ambitious financial targets, tough performance reviews, and shrewd competitors, and so on. The resulting stress can harm not just people’s personal well-being, research shows it can also erode their commitment to ethical behavior. This phenomenon, known as ethical fatigue, makes it challenging to take the high road and maintain integrity when faced with complex decisions.

When stress destabilizes people’s ethical compass, they may inadvertently overlook the heightened risk of ethical lapses. And when employees focus solely on achieving their targets, deadlines, or personal financial goals at the expense of ethical considerations — when doing the right thing feels burdensome compared to seemingly less-costly shortcuts — they can teeter on what we refer to as “ethical burnout.” To prevent this, it’s crucial to spot the signs and root out the contributing forces early.

Here are four warning signs that your employees may be heading toward ethical burnout — and strategies to counteract these forces before it’s too late.

Increased Commercial Pressures and Targets

Setting challenging goals is standard corporate practice, with proponents pointing to research that difficult goals increase employee performance. However, stretch goals are widely misunderstood and misused and can have serious side effects, including increased risk-taking and unethical behavior. For example, when Wells Fargo set overly aggressive sales goals, some employees created millions of fraudulent bank accounts and credit card applications to meet their targets. Similarly, Volkswagen’s unrealistically high performance and environmental targets resulted in engineers and executives installing software in their diesel vehicles to cheat emissions tests.

Instead of viewing goals as benign, over-the-counter remedies for motivation, see them for what they are: potent medications requiring precise dosage, consideration of adverse side effects, and vigilant monitoring. Involve employees in the goal-setting process to create targets that motivate high performance and high ethics, leaving teams enthusiastic and not exhausted. Solicit feedback from employees regarding their obstacles to success. Encourage them to question your assumptions and assure them it’s okay to disagree.

Armed with this understanding, you can respectfully push back on unrealistic goals regardless of where they originate from. As a leader, you need to be vigilant about validating how realistic your targets or requests are. At higher organizational altitudes, leaders are often unaware of the practical difficulties and trade-offs involved in achieving a given target.

In addition, establish open feedback loops across the organization to ensure that overwhelming commercial pressure and fatigue aren’t “buried” within a particular group or function. When top organizational leaders are attempting to combat lagging financial performance, they reach for strategies that appear rational from their altitude; however, these same strategies, when cascaded down to middle management and frontline leaders, arrive looking irrational. Without a two-way loop to communicate serious concerns, those responsible for execution often reach for their own irrational, sometimes corner-cutting, approaches in response. Ron’s 15-year longitudinal study on organizational honesty found that when there is transparency in decision-making across functions, organizations are 3.5 times more likely to have people act honestly and fairly.

Finally, isolated groups are more vulnerable to ethical scandals, so exert extra effort to integrate groups and teams that are more distant from headquarters geographically or in terms of transparency and information access. Being further from the epicenter of decision making and where ethical standards are set makes it easier for local business norms to encroach, even if they conflict with the company’s expectations. For example, Swedish telecom company Ericsson, headquartered in what is commonly considered a low-risk and highly transparent country, experienced ethical breaches in distant and higher-risk markets including Kuwait, China, and Indonesia, among others.

 “Survival Mode” Thinking

Many industries and sectors are facing downturns and workforce reductions. Under such circumstances, people often wonder if they’re next, which can trigger stress that comes with personal economic anxiety. It can also reduce organizational loyalty, as people might only think about self-preservation and temporarily “suspend” personal and corporate values to succeed at any cost in hopes of keeping their employment.

If you know this stress exists, instead of ignoring it, acknowledge the elephant in the room. For example, one of Richard’s clients asked for him to “double-down” on ethics and compliance training prior to the company’s acquisition because the transaction would come with significant workforce reductions. His client tasked him to reinforce the importance of integrity, even in times of uncertainty. By surfacing and addressing this workforce stress instead of ignoring it, the client aimed to keep ethics strong and top of mind during that period of disruption.  

A number of our clients use “ethics ambassadors”: peers they can look to for counsel when they feel ethically fatigued. With such touchpoints, organizations can keep a sense of community and loyalty strong, even under the most difficult circumstances. As scholar Amy Edmondson posits in her book The Fearless Organization, when confronted with an ethical challenge, we’re most likely to turn to our peers and supervisors for support and direction. As surveys demonstrate, having a cross-functional network of ethics ambassadors can mitigate ethical stress in the workforce by reducing the distance between those who are ethically fatigued and those tasked with supporting them.

Decision-Making Overload and Speed

While business leaders are often distracted by a need for speed to capture market share in the face of economic volatility and shrinking competitive advantage, too many decisions, especially in a short period of time, can lead to ethical overload. Under such conditions, people might think, “It’s not fair that they keep piling on all the work when I don’t have the time, budget, or skills to do it. I have no choice but to take a shortcut.” While such ethical fatigue can often be situational, that doesn’t reduce the peril to both employees and their organizations.

As Max Bazerman demonstrates in his research, slower thinking is more deliberative and ethical. However, it’s not intuitive and is often rejected by leaders who signal the need for rapid responses to corporate demands, especially in times of uncertainty. By encouraging slower decision-making, you give your teams time to reach out for help and ask tough questions when they most need to.

One of our clients, a sales leader in the pharmaceutical field, starts difficult commercial meetings with a simple statement: “Don’t misinterpret a mandate to move quickly and beat the competition as a license to take a shortcut or circumvent rules. If you feel like you are getting mixed messages about success and integrity, let’s pause and talk about it.” By sharing clear ethical expectations at the start of tough conversations instead of at the end, the client made it understood that ethical and financial success are partners. Moreover, they showed that speed and thorough deliberation are not mutually exclusive and in fact often work hand in hand. Deciding with haste rarely results in faster, better outcomes.

Yet even with the best of intentions, ethical lapses will occur, even minor ones, often under the pressure of shortened timelines. Another client, who oversees compliance programs for a logistics company, shared, “We see a growing set of employees that, when under pressure, take ethical shortcuts, not to enrich themselves, but because they think they are helping the company.” When that occurs, use those opportunities to acknowledge and empathize with the intent and transform those missteps into “intelligent failures.” When people stray from processes, rules, and procedures, give them the runway to share their disagreements, explore their assumptions about why it seemed like a good decision, and be open to changes that can maximize learning and prevent future misjudgments.

Envy of Unhealthy Status Symbols

When you sense people in your organization are becoming competitive with peers as opposed to collaborative, or even envious of their status, pay attention. These signals of self-involvement can devolve into “Why should they get all the recognition when I’ve done all the work?” thinking. Ironically, it’s the highest-achieving employees who tend to be the least satisfied and therefore more prone to making these comparisons. Cultural currencies — for example, attending high-visibility meetings, the square footage of one’s office, access to exclusive perks, or high-profile assignments — can create a zero-sum mentality when used to compare one’s relative importance to others. And when high achievers feel they aren’t getting their due acknowledgment, they can be some of the first to bend the rules.

“Sue,” a client of Ron’s, faced this challenge when one of her high performers came to her and said, “I’m frustrated that you gave Rick the lead on the Midwest expansion project instead of me. I thought you’d said you would consider me for it.” Though Sue felt defensive at the implied entitlement, she remained curious and empathic instead. Rather than simply saying something dismissive like “I did consider you for it, and decided Rick was the better option” and leaving it at that, she decided to engage her team member differently. She prompted, “Tell me how you’re interpreting my giving the assignment to Rick.” As Sue suspected, her team member saw it as a reflection of their own shortcoming. Having that out on the table, Sue said:

Sue got the outcome she hoped for: Instead of withholding support from Rick, her high performer rallied around him, sharing key client insights and market data that were pivotal to Rick’s success — and that only they had.

When you rely too heavily on your top performers, their dopamine rushes and adrenaline hangovers can lead to unhealthy risk-taking when trying to keep a track-record going. That degree of single-mindedness can accelerate ethical burnout. As was the case with Sue, showing that success can be celebrated without ratcheting up every new goal is critical. Keep your highest performers grounded in integrity, without the need to always be on the rise.

• • •

Ethical burnout often begins with what looks like benign stressors. And that’s the best time to confront them head-on. The spectacular corporate scandals that have graced our headlines — Theranos, Lehman Brothers, or Kobe Steel for example — were years, perhaps decades, in the making. They began as misguided assumptions and untested hypotheses about what success required and were hatched in environments in which doing the right thing eventually became too hard. If these early signals — excessive commercial pressures, survivor-mode thinking, decision overload and speed, and petty competitiveness, especially from high performers — are showing themselves, don’t wait to step in with supportive, clear leadership. The seemingly simplest ethical dilemmas will always arrive at the worst possible time. Prepare your employees for them early and often, before they grow into headlines you never imagined appearing in.

With daily fires to fight and limited space to think, I understand how the pressures rob your clarity. As a certified executive coach, I help senior leaders and their teams gain fresh perspective, confidence and new capabilities that accelerate their success. Work with Dina