Duke Professor Dan Ariely discusses his latest book, The (Honest) Truth About Dishonesty

Written by Paul J. Gennaro

One of the great challenges for large, global organizations is how to foster and maintain a consistent ethical culture across their operations and around the world.  The obstacles are daunting, yet the need is essential.

Increasingly complex business environments – churning with difficult economies, evolving customer/client demands, new/complex regulations and seemingly never-ending pursuits for improvement of business processes – provide a landscape ripe with potentially disruptive change for most companies.  The business environment is further exacerbated by a battle for employee “share of mind” that has never been more competitive.  Untenable amounts of e-mail, along with a myriad of other technological information inputs, are compounded by seemingly uncountable in-person, phone and video meetings.  And while communicating with staff has never been harder to do, it will likely only become more challenging as we go forward.

For those charged with ensuring that organizational values – including ethics and integrity – serve to define a culture, tone at the top and a robust internal communications program are essential.  Similarly, a code of conduct, training, policies, and assurance, through audit and accountability, are all “must haves.”

To optimize these known enablers of an ethical culture, we spoke with a world-renowned expert on human behavior to see if there are any lessons learned from behavioral psychology that could influence how we foster work environments that better enable ethical behaviors.  Dan Ariely is the James B. Duke Professor of Psychology & Behavioral Economics at Duke University.  In addition to his appointments at the Fuqua School of Business, the Center for Cognitive Neuroscience, the Department of Economics, and the School of Medicine at Duke University, Ariely is also a New York Times bestselling author of Predictably Irrational, The Upside of Irrationality, and The (Honest) Truth About Dishonesty.

It is Ariely’s most recent book, The (Honest) Truth About Dishonesty – and the research that contributed to it – that offers thought-provoking findings on how to foster an ethical business culture.

How moral reminders can support honesty

In Ariely’s research, groups of students at different universities were asked to solve math problems within a five-minute period.  After reviewing the results, a baseline average of four solved problems was established.  Subsequent groups were told to review and score their own work, and these groups reported an average of six solved problems – suggesting that students reviewing their own results appeared to cheat by reporting more problems solved than was accurate.  Ariely experimented with this basic methodology further by changing different factors in this exercise with different groups of students to figure out what factors increase and decrease dishonesty.

In one of these experiments, a finding that could offer a suggestion for those charged with creating and maintaining an ethical culture emerged.  When a simple moral reminder was added to the exercise – when a group of students was asked to recall the Ten Commandments prior to completing the exercise – no cheating was observed despite the fact that no one in the group was able to recall all ten.

“This result was very intriguing,” said Ariely.  “It seemed that merely trying to recall moral standards was enough to improve moral behavior.”

In another experiment, students who were self-declared atheists were asked to swear on a bible prior to participating in the exercise.  Again, no cheating was reported.  “These experiments with moral reminders suggest that our willingness and tendency to cheat could be diminished if we are given reminders of ethical standards just before the temptation to act dishonestly showed up,” Ariely concluded.

With other experiments, the researchers used students from schools without an honor code and asked them too to sign a no-cheating pledge.  Even though no official honor code was in place at these schools, the students did not cheat.  This was the same as when students at a school with an established honor code signed the honor pledge.  However, when students at a school with an established honor code participated in the exercise without signing an acknowledgement relating to the honor code, cheating occurred and at the same magnitude as in the school without an honor code.

“It is very difficult to alter our long-term behavior, and a crash course on morality will not suffice,” Ariely said.  “On the positive side, it seems that when we are simply reminded of ethical standards at the point of temptation, we behave more honorably.”

Asked if his research suggests that corporations would be well served to include more frequent ethical reminders into their internal communications programs, Ariely said, “The good news is that people seem to want be honest, which suggests that it might be wise to incorporate moral reminders into situations that tempt us to be dishonest.”

One bad apple really does spoil the barrel

Ariely also noted that behavior is based on what we observe other people around us do.  “People know what is right and what is wrong,” he noted.  “But what determines behavior is what the people around us end up doing, which ends up being more important.”  The role of the culture around us tells us what is acceptable and what is not acceptable, according to Ariely.

“Every time we see bad behavior, it becomes the norm – and it determines what we find acceptable.  Misbehavior by one influences everyone else’s ideas of what is okay and not okay.  And that is dangerous for a culture.”

Ariely cited the need for clear and strict rules to influence behavior, and to publicize the consequences of unacceptable behavior.

“If you want people to act a certain way, then you need to get into the details,” he said.

Publicize positive examples of ethics in action

On the topic of regaining ethical health, Ariely suggested reinforcing positive behaviors.  “The first thing to realize is that personal examples are what is most important – more than the written rules,” he said.  “Once you understand that, you can think differently about how to conduct your business.  It has to do with personal examples in leadership, but it also has to do with exposing people to good behavior.”

When people behave well, we need to reinforce or publicize it, according to Ariely, who recommends giving positive feedback for what is acceptable.  Making personal examples – paying attention to smaller things that happen – and rewarding good behavior was suggested.  “You have to give people the ability to do small things and not just wait until huge things happen, like whistleblowers,” Ariely said.

For leaders at all levels, there is an opportunity to celebrate behaviors that should be replicated, which will reinforce the desired culture.

“With more salient and vivid examples of commendable behavior, we might be able to improve what society views as acceptable and unacceptable behaviors, and ultimately improve our actions,” Ariely concluded.