Chartered Management Institute: In My Opinion

Heidi Mottram, a CMI Companion and CEO of Northumbrian Water Group, on how ethical values can help companies compete successfully

by Heidi Mottram
Last Updated: 02 Mar 2012

Listening to the media over the past few months, no business leader can have escaped the coverage of angry protests in Wall Street, St Paul's and around the world. While those protests were mainly directed towards the financial and banking sector, it does give all of us food for thought about the importance of responsible and ethical management in any business and about how we present ourselves and our activities to the outside world.

Not that I come at this from any 'holier than thou' perspective - I would be very wary of anyone who claims to get the concept of 'ethical or responsible' completely right all the time. The pressures placed on us cause all sorts of dilemmas. That said, I do believe that if you set out to lead an organisation using a set of values and behaviours that can stand scrutiny and approval externally, which you can live by as a role model in a way that's genuine, then your organisation will be able to go about its business in a productive and competitive way. Its reputation will be based not only on what it does but how it does it.

So how do you decide what those values should be? Within a month of taking up my role at Northumbrian Water, I was talking to employees and asking them what they thought we stood for and what sort of business we were. What would people say about us and what would we like them to be saying? People spoke of the need to be ethical and collaborative, among other things. It was very important to preserve these values because they resonated within the organisation.

We needed to think about introducing values that would be important in moving us in the right direction, and it became very important to use measures so that people could see we were serious about our values. What would they mean for middle managers? What would they mean for the board? What would they mean for me? What would we be doing or not doing if we were living by those values? The challenge was to make standards completely transparent so that everybody could see what we expected of people at their different levels.

If you are really serious about living your values then they very quickly become a touchstone for all you do. One of the values we have in Northumbrian Water is to be ethical in all we do. For example, in business process, we ensure that as much of our supply chain as possible is secured locally (currently 63%). This gives back to our local economy by creating jobs and also reduces our carbon footprint. We also ensure the natural environments we are responsible for are managed in a way that improves their ecological health. Managers are targeted and rewarded for finding ways to 'live the values' in their part of the organisation. There are also some great networking organisations, such as Business in the Community, where you can meet and share good practice with other values-driven businesses.

But process and targets are only one way of getting an organisation to act in an ethical and responsible way; the key factor is really the culture, and the biggest influence on that is always going to be the leaders. You can't duck the impact of 'you'. I don't think anyone expects their bosses to be saints, any more than they are saints themselves, but if you want your organisation to do the right thing then the lead will come from the things that you give importance to and speak about.

I spend a lot of my time out and about in the business, which gives me lots of opportunities to discuss colleagues' everyday issues with them. Having those conversations gives credence to what the company values really mean. If you are open and transparent, then people will not shy away from giving you honest feedback about the business behaviours that are embedded in your organisation. That feedback, coupled with tools such as employee surveys, tells you how alive your values are. Then the test comes in how you act to put right what isn't right and reinforce what is. Sometimes I have to be strong and push back and be frank about why I can't do things the way they would like, but at least we all know where I stand. But if we are straying from our stated values, then I know my credibility stands or falls on what I choose to do about that.

The responsibility of leadership is a privilege and I'm conscious of the influence I have on employees' lives and others in the wider communities and environment in which we operate. Ultimately, the way you lead your business will be judged by others, which is why we also seek external feedback on how we are doing. Aside from the regulatory regime that monitors businesses like ours, we have a group of senior leaders, made up from a cross-section of organisations, which are there to challenge us from an ethical standpoint. We ask simply: 'Are we doing the right thing?' We listen, we embrace the challenge it brings and we build plans to embed different approaches.

So, if I were to sum this up in my typical, down-to-earth northern way, I would say: 'Know what you and your organisation stand for and want to be judged by, do the right thing and don't duck it when it gets tough - because everyone's watching!'


Heidi Mottram was appointed to the Northumbrian Water Group and Northumbrian Water Ltd boards as chief executive in April 2010. She joined British Rail as a general management trainee in the mid-1980s. She was commercial director for Arriva Trains Northern from January 2004, before joining Serco-Ned Railways in November 2004 as managing director, Northern Rail Ltd. Heidi was named rail business manager of the year in 2009 for being an 'inspirational leader', and was awarded an OBE in the New Year honours list 2010 for services to the rail industry.

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