When Budgets Challenge Ethics
Sometimes a tragic accident or major crisis has to occur to shake up a complacent organization. As a nation, we’re rediscovering this sad truth in the aftermath of the disintegration of the space shuttle Columbia. A few months before, a panel of NASA engineers, budget officials, and consultants dared to suggest budgetary controls were compromising safety at the space agency. NASA officials rewarded the engineers with involuntary terminations.
Time will tell whether the NASA engineers were onto something or whether there was a connection between budget management and safety problems culminating in the Columbia disaster. Yet simply the fact that questions comparing money and safety were raised at all suggests an ethical dilemma existed—and challenges to the status quo weren’t welcome.
In the end, not only is there an ethical dilemma in this story, but a communications problem, too. There evidently was some doubt, some vagueness, in how to make a decision about how safety would place in the NASA budget alongside competing priorities. The same story can be told in tens of thousands of governmental agencies, companies, non-profit organizations, schools, and churches. How do we decide between competing priorities—and the level of funding for each—especially when budgets are bleeding red ink?
Clearly, there must be a solid, well-thought-out, clearly stated values system supporting decision-making—and the challenges to decisions being made. The healthiest workplaces are open to vigorous discussion about important steps to be taken and how they are to be funded. It’s sometimes said, “Money drives decisions.” From a practical standpoint, that may be true. We can’t spend more than we have, or can reliably anticipate having on hand. But budgetary issues compel all involved to ask, “What’s really important here?” And that’s an ethical question.
At Medical Center A (not in the Peoria area), one of the core values stated that motivated, caring employees were vital to the delivery of quality health care. It should be noted for what follows that maximizing and rewarding profitability at all costs isn’t a stated ethical stance. Medical centers face any number of financial challenges and competitive pressures that test the truthfulness of the ethical system. The medical center’s board viewed declining profitability with anxiety. We need to cut costs, they said, and strive to meet certain margins and profit targets, while maintaining acceptable levels of care.
The board of Medical Center B, facing the same dilemma (and with the same commitment to employees), asked their employees to join in the search for savings. The employees knew where waste was rampant, or where efficiencies needed to be implemented. Other employees wondered whether their jobs were really necessary, and whether an organizational re-design could result in cost savings. The results: cost savings were achieved, the medical center thought through its organizational design, and employees were re-deployed into new lines of service instead of being laid off.
Medical Center A kept the job in the hands of the managers, who cut costs to meet targets. They laid off nearly 15 percent of the hospital workforce across the board to achieve the majority of savings. So much for motivated, caring employees—especially when they learned the board gave the managers end-of-the-year bonuses: new SUVs for each of them. Sound outrageous? It’s a true story, and one that can be told in many industries with minor changes. So what’s the ethical standard? We cut costs no matter who or what is affected, and we reward achievement of financial targets.
Is this any way to run a business? Some may think this comparison is extreme—but we’re seeing the same difficulties being faced by the Peoria City Council, in the General Assembly in Springfield, in Congress in Washington, D.C., and by school boards in countless districts around the state. No doubt the financial problems are painfully real. But in the absence of clearly stated, understood, and accepted ethical standards, managers and elected officials cut costs whenever, wherever, and however they can. They choose the path of expediency because, at least in the short term, the financial problems disappear—only to be replaced with a de-motivated workforce, unclear priorities, and dissatisfied customers or constituents.
No one ever said budget issues were simple. But money must never drive decision-making. Mission and values—ethical standards—must set the agenda at all times. The questions are clear. Instead of asking, “What should be cut?” we ask, “What is worth saving—and why?” Behind these questions is the bottom-line question: “What must we never sacrifice because it’s central to who we are and why we’re here?” Some things can never be compromised without catastrophic results. IBI