Rules in support of values

I often write about the importance of values and how they help employees make better decisions. After all, we can’t have a rule for everything and rules sometimes contradict each other. So values are essential to fill those gaps.

To be clear, I’m not suggesting that we should replace all the rules with values. This would be like telling drivers to enjoy the roads and just make sure they drive safely. This would result in chaos and gridlock. A few, well-chosen rules ensure smooth traffic and actually support the safety goal.

The same is true in the business world. Each organization must establish a minimum of rules and controls to be responsive to government regulations and in support of their own values. These rules ensure the survival of the organization.

The trick is to find the right balance.

Redefining speak-up culture

Today’s post was originally published on LinkedIn. It is reproduced below.

In many organizations, the “speak up” message has been hijacked by the compliance function.

When employees hear “If you see something, say something,” they think about reporting someone else’s wrongdoing. But a true speak-up culture can and should be much more than that.

A true speak-up culture is one where employees feel safe to share any idea that they believe will help the organization or its stakeholders. It can be an idea about a new product, a more efficient process, a new market, a savings opportunity, or even how to improve your bathrooms.

Feeling safe and trusted is critical to a speak-up culture. In their book Primed to Perform, authors Neel Doshi and Lindsay McGregor explain how “play” is the most powerful driver of performance. Organizations who allow their employees to be curious, to experiment, and to fail often outperform their peers. And my friends at LRN use the neat acronym “TRIP”: when Trust is high and employees feel safe, they take on more Risk, which leads to Innovation and Performance.

Smart leaders understand the true value of a speak-up culture. They invite feedback and treat it with respect. Each instance is a seed that will grow into trust.

Where there is no trust, more than wrongdoing goes unreported.

Step #1 in improving your organizational culture

Only hire managers who care just a bit more about your employees than they do about your customers and other stakeholders (and themselves).

Start that process in the C-suite.

What does a manager who cares about employees look like?

She makes her employees feel safe by allowing them to try new things and fail (it breeds innovation and leads to better performance).

She connects her employees’ work to the end product or service delivered to the customer (it gives meaning to the work).

She positions them to be successful inside or outside the organization (successful employees who leave the organization make great ambassadors).

She avoids using emotional or financial pressures (which hurt adaptive performance, the only type of performance that really matters in today’s economy).

For more on high ToMo leadership, read Primed to Perform. For my reading notes on this book, click here. For a recent post on hiring the right people, click here.

Trust: the currency of business

Suppose you buy something on eBay and the seller ships it one day late.

You receive your item in good condition, it’s exactly what you wanted, and the price is fantastic. If you ever needed another item like this one, you would probably do business with this seller again.

Now imagine your item never arrives, your emails to the seller are never returned, and you only get part of your money back after going through the lengthy eBay dispute resolution process. Chances are, you’ll never buy from this seller again.

That’s the difference between a breach of performance and a breach of trust.

Trust, not money, is the currency of business.

Locks are for honest people

I remember being startled the first time I heard the expression that “locks are for honest people.”

My whole life, especially as a kid, I had assumed that the locks on my house or my parents’ car were there to stop burglars and thieves.

Now I get it.

In the E&C world, we could equally say that internal controls are for compliant people. Those who lie, cheat, and steal will find a way around the controls.

As a kid, my parents, my teachers, and my clergy all taught me the importance of trust, respect, honesty and integrity. So, if I spotted a new shed in the yard of that old couple, and my boyish impulses to discover the treasures inside were frustrated by a lock on the door, I naturally walked away, disappointed. Never in a million years would I have even considered the possibility of trying to defeat that lock.

That is the power of values and culture.

And that is why, when one of our employees defeats a control, we need to do more than increase our controls. We need to ask “What is it about our culture that this employee felt the need to behave this way? Why are our values of honesty and integrity not espoused?”

Locks are for compliant people. And culture is the road to compliance.

Pre-boarding

Many employers have an official on-boarding process for new employees.

It’s that short period after hire when we tell new employees what they need to know before they start doing what we actually hired them to do.

This includes sharing our values and providing ethics & compliance training. Just like we would not let a machine operator on the shop floor without safety training, we don’t send an account executive to a trade show without antitrust training.

We do this at the outset of employment to frame messages that come later – messages about sales goals, production quotas, delivery schedules, etc. Our values provide context for our rules.

However, few of us remember that we communicate about our values even earlier in the hiring process. How much we talk about our ethical culture during the interview stage sends a message. How often we communicate our values as part of our marketing efforts can determine the talent we attract.

If an ethical culture is truly the foundation of our business, everything we do should communicate accordingly.

Ethical skillset

Performance management systems often drive compensation – and thus employee behavior. That’s why it is so important to include an ethical skillset in those systems.

Here are some ethical skills that employees should master before being considered for promotion or salary increases:

They consult the right people when solving a problem
They ask the right questions and listen critically
They understand the organization’s values and their duties to stakeholders
They ask “Should I?” before implementing what appears to be the right decision

Employees have either learned those skills or they are still learning them. There is nothing wrong with an employee still learning. When that’s the case, the burden is actually on the manager to provide the coaching.

If you think integrity is hard, try dishonesty

An organization of “ands” is an organization that requires its employees to make the numbers and to do it safely and to do it ethically. It’s not one or the other.

Contrary to popular belief, working in an organization of “ands” is not more difficult. It’s actually way easier. We don’t have to struggle with compromises. We either do it the right way or we don’t. We never have to figure out how to lie, steal, or cheat without getting caught. If something cannot be done ethically, we move on to the next opportunity.

If you think integrity is hard, try dishonesty for a few years and let’s reconvene then. One of us is going to be in a much easier spot.

Micro battles

I am finally home after 11 days on the road.

The days were long but oh so rewarding. Between Singapore and Sydney, I met with nearly 60 of my colleagues to discuss how we can continuously improve what we do. With so many good ideas coming out of our sessions, we discussed the necessity of fighting “micro battles“.

In a large organization with hundreds of ethics & compliance officers (ECOs), not every idea can – or should be deployed globally. Furthermore, even the local implementation of an idea can appear daunting. Thus it is critical for ECOs to understand that we win wars by winning battles, and we win battles by winning micro battles. Micro battles can be won by small units with achievable missions.

Small victories add up. After wars are won, we can often look back and see a critical turning point creating momentum for the victor. That turning point was a micro-battle. It didn’t seem like much at the time but it set things in motion.

We should not let the enormity of a task stop us. We don’t have to do it all on our own, but we have to start, we have to do our part.

One is greater than zero.

The importance of a dissenting opinion

Medium and large organizations should have a disciplinary review committee (DRC) to ensure that disciplinary actions proposed by supervisors and human resources are consistent and fair across the organization. The committee should comprise, perhaps among others, a senior business leader, a senior HR professional, legal counsel, and the ethics & compliance officer (ECO).

A flaw I see in many DRCs is the self-imposed requirement that their decisions be unanimous. Any member should be allowed to disagree with the votes of the majority. This is particularly important for the ECO, who often is the only committee member not part of the C-suite. This junior member of the committee must be encouraged to record his or her dissenting opinion, lest they feel pressured to go along with the more senior majority.

Organizations who employ ECOs charge them with an important task: to be the voice asking the question “Should we?” after everyone else has answered yes to the question “Can we?” In the minutes of a DRC meeting, that voice must be recorded. An organization willing to make part of its official records the dissenting opinion of its ECO is much more likely to arrive at the right decision.