At any given time, one aspect of your compliance program is ineffective.

It’s normal. Your organization changes. The laws change. Society changes. Innovation happens.

It may be normal but it still needs to be addressed in a meaningful way. Publishing a policy and asking employees to certify their understanding of it does not earn you good grades from the regulators these days.

What, then, is a meaningful implementation of an effective compliance program? For that answer, let me turn it over to Hui Chen and Eugene Soltes. They’ve written great article for the Harvard Business Review, one that every ethics and compliance professional should read. Here is the link: https://hbr.org/2018/03/why-compliance-programs-fail.

The punch line: Organizations cannot build effective compliance programs without effective measurement tools.

How do you measure the effectiveness of your compliance program?

In a recent post on Bloomberg View, Matt Levine suggests that perhaps corporate culture is overrated, that the success of a company might be random.

He adds that the CEOs on the cover of business magazines are usually there for one of two reasons: they either lead a hard-charging organization where managers demand the impossible and don’t take no for an answer, resulting in wild success; or they lead the same type of organization resulting in fraud and scandals. Interesting observation, and I would add that many CEOs have been on the cover of magazines for both reasons, albeit at different times.

But I disagree that the outcome is random, or that good outcomes perhaps result from asking for the impossible politely and adding “do it the right way” at the end of the sentence, as Levine suggests.

In my view, the companies who stay out of trouble are the ones who care deeply about how things are done. Managers don’t simply say “do it the right way”, they want to know exactly how success will be achieved. They also care about how people are hired, compensated, promoted and generally treated. They understand that culture is simply an outcome of the processes, whether these processes are written in corporate policies or not. For each process they ask “Can this lead to a bad outcome?”

Some companies understand that how they do things is just as important as what they do.

Some don’t.

It’s not random.

Feeling a bit scattered and overwhelmed at work recently, I created a mind map of my activities. The map showed what I suspected: I take wide aim at too many projects, making it difficult to go deep into any of them.

As I work on fixing this, I find that eliminating activities is not the only solution available. Instead, I can re-focus each activity towards a single goal. Doing so immediately suggests different ways to approach and execute the activities. I now feel that more of what I do is making a greater impact towards a worthy goal.

Perhaps there is a lesson here for the business leader who feels that running her business leaves not time to address culture. She can look at everything she does and ask herself: “If each activity’s goal was to improve the culture, what would it look like? What changes would I have to make?”

Then, suddenly, there is new meaning to the work.

Or, I should say, the work is now more meaningful.

I define ethical leadership as having the skills to execute ethical decisions in ways that inspire others to become ethical leaders.

If you are new at ethical leadership, here’s a practical approach to get you going:

• On a sheet of paper, create a table with 4 columns.
• In the first column, write a list of initiatives you are working on. Write each initiatives in a separate row. Take a week or so to do that. Just write the initiatives as you work on them.
• In the second column, write one (or more) ethical dilemma associated with each initiative. The dilemmas may not be immediately obvious. Take your time. Just revisit the list every day.
• In the third column, write the decisions you made to resolve the dilemmas. Don’t hesitate to ask for help. Involving the right people lead to better decisions.
• In the fourth column, write how you will execute each decision in a way that will make you visible and vocal about the importance you place on ethics and compliance.
• Keep doing this until it becomes second nature.

The second column develops your ethical awareness.

The third column develops your ethical decision-making.

The fourth column develops your ethical leadership.

There you have it. A simple process to ethical leadership. Give it a go and, if it works for you, share it with others.

 

Today is a work holiday in the U.S.

Some people will work anyway.

Some because they love what they do and want to do it.

Some because their services are essential, like emergency responders.

Some because they have no real choice, like those working for a national chain who decided that the extra revenue is worth paying overtime and denying family time (see this chain for a better philosophy).

Some because they think they are expected to work and will be rewarded for it, even though their organization is officially closed for the day. This  speaks to the culture of the organization, or “how things are really done around here.” It matters not what the policy says; employees know what the real rule is.

If we work in an organization that is officially closed today and still receive a call or an email from a subordinate, one that could have waited a day, we must pause and ask “what is it about us that makes our people think they have to work on a holiday?” And let’s not be too quick to blame the subordinate, to deflect responsibility. At the very least, we can do a few things:

• Tell our subordinate that she should enjoy the day off, relax, recharge, and return to work with new energy
• Follow up with her in the coming days to assess her workload
• On the eve of the next holiday, set clear expectation of rest for your team. A short email thanking them for their work and wishing them a nice break can go a long way in creating the right culture.

 

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This post was originally published on 24 November 2016.

Ethics & Compliance Officers are often required to conduct internal investigations. Most of us are not professional investigators and the process can be overwhelming and intimidating at first. If you are still new at investigations, you should read Jeffrey Klink’s excellent post on the basic 7 steps to follow.

The last step, case evaluation, is of particular interest to me. This is when the business leaders (not the investigators) are supposed to “fix the holes that allowed the misconduct to occur.” For too many leaders, this process involves adding controls or policies to the existing framework. In other words, each time the pipeline is leaking they put some duct tape on the hole. Meanwhile, no one is addressing the fact that perhaps the water pressure is too high.

Here is a question I like to ask myself at the end of an investigation: “What is it about our culture that made our employee think it was OK to do this, or that he would get away with it?” This is a critical question if you believe, as I do, that culture is an outcome of your processes. If you identify the process that created the culture that lead to the misconduct, you can work on the cause of the leak. You’re fixing the hole, and then some.

Is there an element of your culture you don’t like? Find the related process.

Today I want to share one of the smartest interviews I’ve read about corporate culture. Amy Conway-Hatcher knows her stuff. You might want to read it before continuing.

Allow me to add my two cents to the question about the role of culture in enabling scandals. The interviewer suggests that scandals happen despite the systems and policies that most major institutions have in place. I argue that these scandals happens because of the systems and policies in place.

While the interviewer was most likely alluding to standard policies like non-retaliation,  harassment, and keeping accurate records, which are all good and necessary, we must also consider the less formal systems that grow in organizations. Take the Wells Fargo “system”, for example. Start with a CEO that shouts “Eight is Great!” all the time, tolerate the managers who then decide to micro-manage their sales people to make sure 8 new accounts are opened every day, allow HR to fire those who don’t meet the target, ignore that your have terminated over 5,000 employees for creating fake accounts in 5 years, and you get a scandal.

Surprising? Not a bit. And we could repeat the exercise with Volkswagen, Uber, Fox, etc.

A scandal is growing in your organization right now. Do you know what system to blame?