Kara Swisher of The New York Times last week wrote an op-ed about ethics and Silicon Valley.
In it she wrote: “When asked about the idea of a single source of wisdom on ethics, some point out that legal or diversity/inclusion departments are designed for that purpose and that the ethics should really come from the top—the chief executive. Also of concern is the possibility that a single person would not get listened to or, worse, get steamrollered. And, if the person was bad at the job, of course, it could drag the whole thing down.
I have some thoughts about this topic that I would like to share.
Ethics are not the responsibility of a single person, single role or even a single function in an organization. Ethics should not be buried as a ‘nice to have.’ Ethical decision-making is, and should be, a standard part of the business. An organization that builds its business on how it achieves its goals--not the goals in abstract--lays the groundwork for sustainable, long-term success.
Ethics determine how an organization is led. If ethics are treated as window dressing, that's what they will be. We often see fancy marketing materials and talking points from a business, but as headlines have reinforced, the actions of the business will surface its true ethical colors.
Organizational culture is built in the corridors of the business, at the ports, in the sky, on the shop floor, at the store, at the client site. There are countless case studies across dozens of industries that point to a historically strong tone at the top, only to see the business crumble because of muddle in the middle.
We also can’t forget headlines of misconduct tolerated at the top for decades, where boards and others in powerful positions turned a blind eye of complicity, placing profits over ethics. Where are our true leaders?
Leadership is in crisis today.
I have advised organizations for nearly two decades on how to build an effective ethics and compliance strategy by elevating the dialogue from a playbook of mere rules and policies to embedding ethical decision-making into all aspects of a business.
My experience taught me--and countless examples prove--that compliance is an outcome of corporate culture. A workforce models what it sees. Policies alone won't change behavior, but are an important part of building a strong corporate culture. Corporate culture represents all the intangible sides to a business, the things we see, hear and experience.
Research from LRN’s Program Effectiveness Index points to guideposts of consistency and modeled behavior by leaders as the core ingredients to building an effective ethics and compliance program.
Credibility and trust matter. We conducted an LRN study with a client, and discovered when employees observed a lack of accountability they were 10 times more likely to hesitate to speak out if they witnessed misconduct. They think, why bother?
ECI’s Global Business Ethics survey found employees tend to report misdeeds 71% of the time, but only when they believe top management is committed to ethics.
Setting tone matters, but walking the talk and activating principles are where the stickiness occurs. This is where I believe we are experiencing a crisis in leadership. We cannot build and lead ethical cultures without investing in the development of leaders around core skills such as listening, humility and the willingness to go deep.
According to LRN’s State of Moral Leadership study, 17% of employees believe their leaders put principles first. Yet we know there is a desire for moral leadership. The study discovered when managers demonstrate moral courage by standing for truth or asking tough questions, they are judged 17 times more effectively by their colleagues.
I was recently advising a partner, the chief compliance officer of his organization, on internal pushback he had received on how to measure the effectiveness of his proposed changes on translating corporate values into action.
We discussed the significance of first developing and coaching leaders to model action; of taking ownership of corporate culture; and becoming more self-aware. We agreed inaction is the most dangerous action of all--and the reason why so many organizations turn up in the headlines.
Inaction erodes culture. Decades of inaction produced complicity and a passive approach to taking ownership of healthy, ethical cultures. In the words of my client: “The process is the result.”
Meaning, there is no single point of failure or success, and there is no single person that beholds the wisdom on ethics. Ethical decision-making and the development of an ethical culture requires full ownership at the top, driven through to the middle.