It’s never good to be bad

“You can’t change the people in your life. But you can change the people in your life.” – The Minimalists

In every organization, some people are rude, some are liars, some are bullies, some are cheaters. And many of them were promoted along the way. Which means they have no incentive to change because everything suggests that their success is linked to their bad behavior (which they don’t recognize as bad).

These people are toxic. They hurt performance. They make good people leave.

Most often, the only way out is to show them the way out.

People like us don’t cheat

Organizations with a strong safety culture never tell their employees that they must comply with safety measures to avoid government penalties. Instead, they speak of the importance of everyone returning to their families every night in good health.

Yet, when it comes to corruption, most organizations wave the latest billion-dollar fine in front of their employees as if avoiding such fines was the driver for honest behavior. Would they not care if the fines were smaller?

Ethical leaders tell their followers “People like us don’t cheat, lie, or steal. We win the right way, on the merit of our products and services. Others can trust us because we perform with integrity, always.”

Lazy managers use scare tactics. Ethical leaders inspire principled performance.

Are we here to help or to shame?

Dashboards and scorecards can help our business or hurt it.

If the purpose of the dashboard is to highlight pain points and deploy necessary resources to relieve the pain, then employees will gladly share the information we ask for.

If, on the other hand, the scorecard is perceived as a ploy to improve performance by shaming the few who don’t seem to keep up with the rest, then employees argue, cheat, and lie in attempts to withhold incriminating information. And performance won’t get better.

We must ask ourselves: why are we tracking the metrics that we have? And do our employees understand our purpose?

Stifling the business

The Ethics & Compliance professional…

Provides advice and guidance to employees with concerns or questions
Writes policies and provides training to protect the organization and its employees
Conducts audits and investigations to ensure that policies are implemented and followed
Protects employees who are the target of retaliation
Implements controls to prevent fraud
Protects the reputation of the organization by stopping conduct that is lawful but awful
Instils a sense of pride in employees who want to work for an organization that does the right thing
Allows the organization to attract candidates whose values are aligned with its own
Focuses on the long term in a world of quarterly results

And because of that last bullet, E&C professionals are often accused of stifling the business.

Those who make these accusations actually believe that their organization would be better off without us. They are the descendants of those who, decades ago, did not want to provide safety training and equipment to employees because it was cheaper to replace an injured worker with an able one. Today, they want to open millions of fake bank accounts, they want to sell cars with cheating devices in their emission system, and they want to jack the price of life-saving drugs.

And they find it difficult when E&C professionals get in the way.

So frustrating.

When good people do bad things

Too often, we see colleagues lose their job for covering up a mistake that would not have led to any form of discipline, let alone their termination.

Those are the saddest moments.

They expose a low-trust culture where an employee is willing to risk her job or her career for fear of admitting a mistake.

Our typical response – to shake our heads in disbelief and then move on – is unacceptable. Someone just lost their job, in part because of the culture we created or tolerated. We ought to examine how we do things and look for what might have led to this unfortunate outcome.

Questions to ponder:

How do we react when others make mistakes, miss a deadline, fall short of a goal? Is the reaction commensurate to the missed opportunity?
When we make mistakes, do we admit them freely? Do we share the mistake and its learnings with others (demonstrating that one can survive mistakes)?
Do we go as far as encouraging mistakes by asking our employees to be curious and to experiment?
Do we recognize colleagues for pursuing innovative ideas, even if they fail?
Do we have unforgiving compensation schemes, where huge bonuses are paid for meeting 100% of the goal but nothing if 99.9% of the goal is met?
Do we offer an ombudsman program where employees can ask for advice while remaining anonymous?
Do we forgive mistakes made by senior leaders more easily than those made by the rank-in-file?

To be clear, employees who cheat, lie, and steal to cover up a mistake deserve to be punished. But let’s remember that everyone has a breaking point. So when someone breaks, how much of that pressure came from us?

Double standards are cancerous

When senior leaders decide to discipline their own more leniently than how low-level employees are disciplined for the same infraction, they typically think that no one will know.

But someone always does. The assistant who anonymously reported that her boss was cheating on his expense report. The ethics officer who received the anonymous report. The few who have access to the system where the allegation was recorded. And those who might be the confidents of the previously-mentioned – among others.

Everyone who knows of an actual double standard become disillusioned. We all believe in fairness and it hurts when we see it stolen. We become less enthusiastic, less engaged. We think “what’s the point?” The entire organization suffers as a result.

Double standards are born out of a lack of courage by those who are in the best position to fight.

Book report: Primed to Perform – The Blame Bias

Book by Neel Doshi & Lindsay McGregor

Reading notes by Yan Tougas

Studies have shown that people tend to blame individuals, and not the situation, when something goes wrong. Teachers who teach in terrible conditions blame the students for not learning. Managers blame employees who get hurt in dangerous conditions. Salespeople miss their targets because they are lazy. Coworkers cheat because they are unethical. Because of this bias, few of us focus on improving the context, the culture.

We invest in hiring the right people and then underestimate the influence of our culture once they arrive.

In many studies, leaders were tricked into believing that their followers were exceptional individuals. Because leaders believed that their followers could do no wrong, they assumed that the context was at fault when something didn’t go as planned. The leaders then worked on the context (because, they assumed, there was nothing wrong with the followers). Witnessing this work, the followers felt motivated and valued, and ended up excelling. The Pygmalion effect is the antidote to the blame bias. Once blame is eliminated, expectations increase all around.

Everyone is subject to this bias. Before anyone can remove the bias from an organization, they must remove it from themselves. The easiest way is to learn how to give feedback to others (“REAP”):

Remember to assume a positive intent. Assume the other person means well.

Explain – Come up with 5 scenarios that could explain the behavior, scenarios that do not place the blame on the individual. Consider that culture could have contributed to the outcome.

Ask the other person why they behaved that way (ask assuming positive intent).

Plan – Identify the root cause and create a plan of action

One of Toyota’s values is genchi genbutsu – the actual place, the actual part – reminding managers to go to the worksite to assess a situation in context and ensure a good solution based on objectivity and open mind.

We don’t need more rules

As business scandals continue to surface, we see more companies looking to hire compliance officers. So we must ask: do we really need more employees whose job it is to ensure that other employees are following the rules?

Thinking about the recent Volkswagen scandal, would more compliance officers have prevented the deployment of its cheating software? Compliance officers do their job within a set of corporate values. If those values don’t include honesty, integrity, and trust, then what exactly is the role of a compliance officer? The time has come for organizations to discover the values they want to live by, instead of the rules they want to follow.

Ethics Officers more naturally consider culture and values when addressing compliance failures. Values provide guidance not only in interpreting a rule but in deciding what to do when no rule governs. That’s why values-based organizations will always outperform, and outlive, those that are rules-based. In the aftermath of an ethical scandal, organizations regain none of the public trust by hiring a large outside law firm. To regain trust, organizations must publicly commit to live by a set of clear values. And they must be willing to lose business rather than compromise those values.