The practicality of ethics for business
Michael Sandel's ethics course at Harvard is a must for business leaders wondering about what makes sense to do with digital technologies.
In today’s fast-moving business landscape, the most pressing areas—from digital transformation and AI to sustainability—demand an alliance between ethical and practical thinking. Progress in these fields cannot come from polarized thinking or simplistic approaches that prioritize action at the expense of measured consideration. Balanced, thoughtful deliberation is not a lack of conviction; it is the foundation of true determination to "do the right thing" and ensure that what we do is both impactful and sustainable.
When I teach digital transformation, innovation, and marketing, I always emphasize the deeper meaning behind what we do with technology. These discussions extend beyond the strategic, technological, and operational aspects to explore the rationale for innovative applications and the importance of critically evaluating consequences beyond first-order impacts. In this fast-paced digital age, the questions of why and what if must take precedence over the (much) easier question of how. This is a principle that skilled engineers, technologists, and leaders alike must uphold.
The Practicality of Philosophy
Contrary to what many people in business believe, philosophy and ethical considerations are not abstract or impractical exercises. They have profoundly practical applications, particularly when evaluating the role of tools and technologies in shaping our world. Philosophy provides the right foundation to think holistically about whether we should or should not do something with a tool or technology.
It’s tempting to use technologies simply because we can, to implement innovations simply because it’s possible, or to pursue ideas because they present a compelling business case. However, history teaches us that such narrow, first-order thinking can lead to unintended consequences. Conversely, ethical considerations should not devolve into blanket prohibitions, driven solely by collective moral mandates or individual beliefs about a technology being inherently "bad". Regulation alone does not equate to progress, and this is particularly evident in the EU’s approach to AI. Writing directives or persuading the public that wishful thinking can serve as scientific and industrial policy will not make the EU a leader in AI. When the combined investment of 27 nations in critical areas—such as fundamental research, semiconductors, or AI data centers—is dwarfed by that of a single corporation (e.g., IBM, Meta, Alphabet, Microsoft, Alibaba, TSMC), it becomes evident that scale is a critical factor that cannot be overlooked.
To find a constructive path forward, we need to strike a balance:
Avoiding blind enthusiasm for every technological possibility.
Steering clear of reactionary resistance to innovation.
Progress occurs when ethical considerations and practical advantages align to create momentum for something new, even if it initially feels uncomfortable.
How This Applies to AI and Digital Transformation
The principles of aligning ethical and practical thinking are especially relevant to AI and digital transformation. These rapidly evolving fields present opportunities for profound innovation but also carry significant risks and ethical complexities. Progress demands a nuanced approach that avoids the pitfalls of both unchecked enthusiasm and reactionary opposition.
Moving Beyond "Good" and "Bad"
AI is not inherently "good" or "bad." It is a tool whose impact depends on how it is designed, deployed, and governed. Simplistic moralizing or vilifying specific AI applications oversimplifies the nuanced decisions required to ensure that AI serves human interests responsibly. Ethical considerations must guide how we prioritize transparency, fairness, and accountability in AI systems.
Avoiding Data Overload and Confusion
Digital transformation and AI thrive on data, but decision-makers often face a deluge of information about potential risks and benefits. This can lead to analysis paralysis or poorly informed decisions. Clear, actionable frameworks—rooted in both ethical considerations and business value—are essential for making sense of complexity and moving forward effectively.
Embracing Innovation Without Overcorrection
The rapid pace of digital transformation requires adaptive strategies that harness innovation while addressing potential harm. Overcorrection, such as overly restrictive regulations or blanket bans on AI applications, stifles progress and fails to account for the potential benefits of responsible AI adoption. Governance models must be dynamic, enabling innovation while addressing risks in real time.
Aligning Ethics with Economic Value
AI and digital transformation succeed when ethical considerations align with economic rationale. Organizations should aim to demonstrate how ethical practices—such as improving privacy protections or reducing algorithmic bias—also deliver tangible value, such as enhanced customer trust, competitive differentiation, or operational efficiency. This alignment ensures that ethical AI is not only a moral imperative but also a strategic advantage.
How that applies to sustainability
Efforts to address sustainability often fall into counterproductive patterns that fail to drive real progress. It’s tempting to focus on moral imperatives, overwhelming data, and idealistic visions of “going back to simpler times.” However, these approaches frequently backfire, creating cognitive overload, despair, or impracticality rather than inspiring meaningful action. Here’s why these methods fall short and what a more pragmatic approach might entail:
Moralizing Environmental Harm Doesn’t Drive Change
Simply labeling environmentally harmful behaviors as “bad” or unethical has limited effectiveness. While moral arguments can raise awareness, they often alienate those who feel judged or overwhelmed by the scope of the problem. Real progress requires actionable pathways that show how addressing these harms aligns with tangible benefits—economic, social, or otherwise.Data Overload Creates Paralysis, Not Solutions
Bombarding people with dire statistics about environmental crises often has the opposite effect of its intention. Instead of motivating action, it leads to cognitive overload and despair. For instance, a focus on endlessly reciting the cost of climate inaction—without clear steps or hope—risks making people feel powerless. Instead, framing sustainability in terms of opportunity and achievable steps creates engagement and momentum.Regressive Ideals Are Incompatible with Modern Realities
Some sustainability advocates romanticize a “return” to simpler, less industrialized ways of life. While this idea may appeal to a certain nostalgia, it is impractical and unsustainable given today’s population levels and interconnected economies. Many of the same individuals who advocate these views also rely on the conveniences and systems they criticize. What’s needed is not a rejection of STEM progress but an embrace of innovation to create sustainable solutions that can scale to meet the needs of billions.Frameworks Without Economic Rationale Won’t Work
Tools like the mitigation hierarchy or 6R/9R frameworks (reduce, reuse, recycle, etc.) are essential, but presenting them as moral imperatives without a strong economic rationale limits their effectiveness. For businesses and governments, sustainability initiatives must make economic sense to drive adoption. Pragmatism, not idealism, will enable the adaptation required to tackle the sustainability crisis. Programs and solutions must account for second- and third-order consequences, ensuring they are viable at scale rather than “half-baked” ideas that collapse under scrutiny.
Building a Pragmatic Case for Sustainability
To move beyond these common pitfalls, sustainability efforts should prioritize:
Concrete Value Propositions: Demonstrate how sustainability drives business value by lowering costs, mitigating risks, spurring innovation, and enhancing brand value.
Scalable Solutions: Focus on innovation and adaptation that can meet the demands of modern populations without unrealistic sacrifices.
Economic Incentives: Embed sustainability into business strategy by aligning it with cost reductions, access to capital, market differentiation, and talent attraction.
Balanced Messaging: Combine moral considerations with a focus on benefits and achievable goals to avoid overload and disengagement.
By embracing these principles, we can transform sustainability from an aspirational concept into a driving force for meaningful change that balances ethics with practicality.
Why Michael Sandel’s Lectures Matter
To deepen this reflection, I highly recommend listening to Professor Michael Sandel’s extraordinary lectures. In his celebrated course on moral reasoning, Sandel introduces ethical frameworks that are immediately relevant to decision-making in the context of digital transformation and AI.
Here are a few key takeaways from his lessons:
Different Ways of Thinking About Ethics: Sandel explores utilitarianism, deontological ethics, and virtue ethics, showing how each offers distinct perspectives on what’s “right.” These frameworks are invaluable for analyzing complex technological decisions where the consequences, duties, and character of the organization come into play.
Recognizing Unintended Consequences: Through historical and hypothetical examples, Sandel illustrates how well-intentioned actions can lead to outcomes that are worse than the original problem. This lesson is crucial for innovators, where the road to progress often intersects with ethical grey areas.
The Value of Doubt and Dissent: In an era dominated by certainty and consensus, a pinch of doubt is your best ally. Sandel’s philosophy underscores the importance of intelligent and respectful dissent in decision-making. For business leaders, this means fostering environments where team members feel safe to challenge prevailing assumptions and contribute alternative perspectives.
Ethics, Leadership, and Action
As business leaders, we must develop exceptional listening skills to navigate these complex ethical landscapes. However, listening alone is not enough. Leadership requires the determination to act:
To do the right thing (as you define it, consistent with your values and purpose).
At the right time (a judgment you must make and own).
In the right way (whether through soft influence or hard enforcement).
Sandel’s lectures remind us that ethical decision-making is rarely black and white. By embracing doubt, fostering dissent, and refining our ability to think critically, we can better navigate the intricate interplay of ethics and innovation.
For anyone navigating the challenges of digital technologies and AI, I can’t recommend Sandel’s lectures highly enough. They provide a powerful starting point for reflecting on the ethical dimensions of innovation. As you implement and design the tools of tomorrow, let these ideas serve as your guide. The future of technology is not just about what’s possible; it’s about what’s right.