Want a More Ethical Team? Build Expertise, Not Just Guidelines

Ethics is often associated with the abstract realm of philosophers. But there’s nothing abstract about the risks for business leaders: Ethical missteps can expose their companies to a host of reputational, regulatory, and legal risks. In response, companies develop ethical guidelines or codes for decision makers and set up boards to govern guideline usage. For example, companies under growing pressure to fight bias are developing protocols to enable customer service representatives to treat all complaining customers fairly. Another example is companies that are revamping guidelines to ensure fairness and the implementation of diversity, equity, and inclusion commitments at all stages of the recruitment process (such as screening or selecting), often aided by algorithms.

However, a significant challenge arises when leaders need to apply ethical guidelines — which are, by design, generic and abstract — to concrete, pressing dilemmas. The practical application of ethical guidelines requires skill, not merely noble intentions.

How can decision makers learn to skillfully put a company’s ethical guidelines into action? This article demystifies the art of applying ethical guidelines in real-world scenarios and offers leaders recommendations on how to build people’s ethical expertise in order to successfully bring their organization’s guidelines to life.

Three Practices That Help Leaders Apply Ethics Guidelines

To learn more about effective leaders who take a proactive, systematic approach to ethical risk management, we conducted an in-depth study of health care organizations. We examined how health care leaders used ethical guidelines when making critical, occasionally life-or-death decisions in ambiguous situations and with limited resources. That’s a competency that business leaders across all industries need to master in order to manage ethical risks.

By meticulously analyzing the equitable distribution of resources and establishing advanced ethical guidelines, health care leaders have set a benchmark in ethical decision-making. The health care sector’s experiences offer valuable lessons for people addressing ethical dilemmas in everyday high-stakes decision-making areas, such as hiring or customer service.

While spending several months observing decision makers in action, we gained insights into the art of applying ethical guidelines in the real world. Our research illuminates three practices — sensemaking, sense-giving, and sense-breaking — that enable decision makers to apply ethical guidelines skillfully across multiple complex scenarios.

1. Sensemaking

Sensemaking involves using the language of the ethical guidelines to create a narrative of what’s going on in a specific decision-making situation.

For example, the decision makers we studied — health care managers and doctors — asked pertinent questions driven by the ethical guidelines when examining patients’ requests for expensive new drugs: Is there an exceptional need? Is it a genuine request? Does the expected benefit justify an exception?

In one example that we observed, decision makers had to determine whether a teenage patient had exceptional needs that would unlock funding for a new drug. At first glance, the patient’s needs appeared unique: He suffered from a severe, rare genetic disorder for which the requested drug was licensed. However, upon closer examination of the available information, such as doctor reports on the patient’s other symptoms, and reflection on past cases, decision makers sensed that the patient would likely benefit more from psychological support than from the requested drug. Moreover, after several careful readings of published scientific reports on the drug’s effectiveness, they noted that the expected, quantifiable clinical benefit would be much smaller than they had initially thought.

The lesson here: Decision makers need to develop a nuanced narrative of what to do by iteratively interpreting and synthesizing diverse sources of information. This approach provides the scaffolding to help people align a decision with the organization’s ethical guidelines.

2. Sense-Giving

Sensemaking is not enough when people face complex “right versus right” dilemmas, where ethical ambiguity is high. What the guidelines mean in relation to a particular case can become an open question. We found that decision makers address such ambiguity through sense-giving. This is a process in which each person takes a position on how the guidelines apply to the case at hand and, through open debate, tries to persuade others to side with them.

This is a perfect recipe for surfacing disagreements, and that’s exactly the point: Group members leverage collective wisdom to generate diverse viewpoints and navigate ethical ambiguity.

Consider the following example involving a request for a lifesaving drug. A doctor ardently argued to reject the request, based on limited evidence of the drug’s clinical effectiveness. Another doctor passionately counterargued that “we are in the business of saving lives” and suggested approval. A health care manager respectfully disagreed with both and reminded everyone that, based on the ethical guidelines, other patient groups who have complex health needs should be included in the fairness equation. Through open debate, decision makers effectively revealed various aspects of the ethical dilemmas they faced, such as the unfairness of exceptions that might unjustly limit equally deserving people’s access to health care resources.

During sense-giving, there is a risk of entering a spiral of endless conversations and potentially persisting differences. Decision makers can manage this risk through two main tactics. First, they can build consensus by extracting evidence from authoritative sources and letting the evidence drive the deliberation process. Second, they can bring clarity to the dilemma faced by imagining plausible responses from external stakeholders (in our case, the public). For example, decision makers can use common sense as a device for building consensus by asking, “Would a person on the street find logic in this argument?”

3. Sense-Breaking

In even more complex “outlier” cases, the letter of the ethical guidelines appears to contradict the spirit of the guidelines. This calls for a reflective and flexible approach, whereby the rationale and the language of the guidelines are adapted to the specifics of the case. We call this process sense-breaking. In sense-breaking, decision makers may temporarily deviate from strictly following the guidelines, acknowledge their emotions, revisit the purpose of the guidelines, and draw on their personal sense of what is morally right. Sense-breaking exposes the potential limitations of any generic ethical guideline to certain outlier cases and, therefore, constitutes an opportunity for further reflection and learning, including the potential to modify the guideline itself.

In one example that we observed, decision makers were debating a very rare request for brain surgery. While debating the evidence, they agreed that, based on the scientific literature, the procedure probably would not work. Strictly following established clinical protocols and ethical guidelines meant that decision makers had to reject the request. Most of these health care leaders, however, went silent as they intuitively felt that such an outcome would be wrong. One of them broke the silence by saying, “We can’t be so rule-bound and just walk away!” The group eventually agreed to approve the request by flexibly adapting the guideline principle. At a subsequent meeting, they were informed that the patient had successfully undergone the surgery and was in stable condition.

The lesson: Sense-breaking is, undoubtedly, a balancing act that comes with risks. On the one hand, it requires flexibility and divergence from conventional thinking, asking leaders to combine their personal moral sense with analytical insights derived from the ethical guidelines. On the other hand, decision makers know that they must stay aligned with the core principles of the ethical framework and not be swayed by their emotions and personal moral judgments. The process is delicate, but when it is handled in the spirit of collegial, ethical deliberation, sense-breaking helps to develop novel solutions to unique ethical dilemmas.

As these examples show, simply designing an ethical framework is not a panacea for managing ethical dilemmas. People need to master the ethical expertise — sensemaking, sense-giving, and sense-breaking — needed to apply ethical guidelines and avoid stark ethical missteps in daily work.

For example, in February 2021, a staggering 40 human content moderators for Meta independently reviewed a contentious Facebook post and, after applying Meta’s hate speech policy, decided that the post should remain on the platform. After an independent ethics board scrutinized Meta’s decision, the company was forced to remove the post. The board found that moderators had crudely applied the policy, primarily because they were “instructed … to apply the letter of the policy and not to evaluate intent.” It appears that when judging the case, moderators put more emphasis on creating a trail of compliance with Meta’s ethical guidelines and less on making sense of what was going on. If the company’s human moderators had fully developed their ethical expertise, especially their ability to engage in sense-giving and sense-breaking practices, the company might have avoided the public backlash that the post caused.

Four Ways to Develop Your Organization’s Ethical Expertise

So how can leaders develop that ethical expertise across the organization and enable the appropriate application of ethical guidelines in practice? Here are four ways to strengthen people’s ethical expertise, based on our research:

1. Prioritize ethical expertise as a skill set and mindset. Ethical expertise is a form of mastery that blends analytical skills with the ability to remain open to emotions and differing viewpoints in order to take a nuanced approach to ethical dilemmas. Ethical experts master sensemaking, sense-giving, and sense-breaking skills and learn to consult and control their intuition. These leaders can distinguish between the spirit (the right thing to do) and the letter (the correct thing to do) of ethical guidelines. Ethical experts also adopt a critical and collaborative mindset that enables them to recognize the intrinsic value of developing and comparing different ethical standpoints.

2. Train for ethical expertise, not rule compliance. To develop employees’ abilities to navigate ethical dilemmas, organizations should focus not only on adherence to ethical guidelines but also on enhancing critical thinking skills and emotional intelligence. Engage decision makers in scenario-based simulations and role-play exercises to allow them to encounter ethical situations filled with varying degrees of ambiguity. Such exercises can be structured by incorporating targeted questions to uncover nuances in a situation, generate diverse applications of the guidelines, and nudge decision makers to adopt alternative perspectives, such as considering the view of an outsider.

By working through different scenarios in a structured way, decision makers learn to discern when sensemaking narratives are coherent and when additional deliberation and recourse to common sense (sense-giving and sense-breaking) may be necessary before making decisions. Organizations can further enhance training by compiling a repository of past ambiguous cases for reference that provide tangible lessons. Additionally, using generative AI tools for creating new scenarios or serving as a dialogue partner can help a decision maker refine their ethical expertise.

3. Develop mechanisms for sharing ethical expertise. Business leaders should foster an environment where employees are motivated to both develop and share their ethical expertise. The main challenge here is that, due to its tacit nature, ethical expertise tends to remain confined within individuals or parts of the organization where people have the opportunity to gain experience in applying ethical guidelines in multiple scenarios. This hinders widespread dissemination.

To address this challenge, business leaders can set up structured shadowing programs. These programs should pair employees with recognized ethical experts within the organization, allowing the employees to learn through direct observation and interaction. That was a practice we observed in the organizations we studied. Moreover, leaders can create forums or teaching groups where ethical experts can share their experiences and insights on navigating real-life ethical dilemmas. This initiative can not only facilitate peer learning but also elevate the status of ethical expertise across the organization.

4. Foster open debate. Leaders need to create an environment where employees feel safe expressing their opinions and emotions without fear of judgment or dismissal. For example, companies can organize discussions to include dedicated time for debate, focusing on results while allowing emotions to contribute to, but not control, the conversation. This is particularly important in complex or edge scenarios where the morally right outcome may not always derive from strictly following the organization’s guidelines.

During debate, employees should be encouraged to rely on their initial intuitive reactions (sympathy or antipathy toward a request, for example) and then subject these reactions to rational evaluation. Leaders must also define and communicate clear escalation pathways for addressing unresolved issues, to ensure that employees responsible for applying ethical guidelines know how and when to escalate concerns.

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Leaders need to view ethical guidelines as a compass that employees need to skillfully use alongside their ethical expertise rather than as a key that effortlessly unlocks a door. Ethical expertise needs to be nurtured and grown throughout the organization. Prioritizing the development of ethical expertise will help everyone to bring the organization’s ethical guidelines to life and prevent serious ethical missteps.