ECI Best Practices Forum – Fall 2017 – Day 2

Day 2 had a different rhythm than Day 1. Here are the key points for me:

Videos
- The cost of entry is now so low that there are no reasons not to use video to communicate about E&C. An iPhone and free editing software is all you need.
- Use videos to demystify aspects of your program (what happens when you call the helpline, what are the steps in an investigation, how are reporters protected from retaliation, etc.)
- Keep them short (below 4 minutes)
Appreciative inquiry
- It means asking employees “What does it look like when we are at our best?”
- It’s a concept combining two good practices:
  - Getting employees involved in the solution, because involvement is key to commitment
  - Focussing on creative thinking while staying away from traditional discussions (which typically lead employees to focus on all the reasons why something won’t work)
Quotables
- “Conflict is normal. It is to be expected. So prepare for it” (i.e. train supervisors on how to handle future conflicts)
- “Everybody deserves special treatment.” (ie. a call not to govern everything by policy; or a call to scale the unscalable)
Recommended books
- The speed of trust, by Covey
Recommended apps
- Kahoots

ECI Best Practices Forum – Fall 2017 – Day 1

Yesterday was the first day of the 2017 Fall Best Practices Forum, put together by the ECI. The topic: Creating a speak-up/listen-up culture. Here are some of my meeting notes:

Science shows that “telling” is instinctual and “keeping quiet” is learned.
- Babies as young as 14-months old can communicate to their parents when something is wrong (e.g. they will cry if an older sibling steals their cookie while mom is not watching to get her attention). But…
- Kids as young as 4-years old have already learned that “no one likes a tattletale”. This is reinforced during school years, on TV, and in the workplace.
Thus, managers…
- Should assume that employees want to report.
- Should be educated on recognizing and responding to reports.
- Should let reporters know that it was a good idea to come forward
Organizations should share how reporters make a difference and protect them
- Reporters are 32% more likely to come forward if they know it will make a difference and 40% more likely if they know they will be protected
- Reporters use a 2-step analysis
  - Are there potential repercussions for me personally? If yes, shut-up. If no…
  - What is the cost/benefit analysis? E.g.: Will anyone care? If no, shut-up.
- Reporters want to know what will happen if they speak up. We need to demystify the process. KPMG has done that successfully with videos from their CECO demystifying intake, investigations, retaliation protection, etc.
  - KPMG videos explain, with statistics, why it is not as effective to report anonymously (harder to protect, to stay in touch, to investigate).
  - Reporters are less likely to trust senior leaders. The greater the power imbalance, the lower the trust. That’s why supervisors are key.
  - Reframe the conversation to describe reporters as loyal to the organization
- Employees working in organizations with a helpline report more than others – but they barely use the helpline! There is a lot of speculations as to why that is.
- Managers need to learn to listen.
  - On average, managers interrupt their subordinates within 17 seconds of the start of a conversation.
  - What makes it difficult to listen attentively is, in part, that the brain can process 1,000 words per minute while people speak an average of 150 words per minute. The extra brain power is spent on distracting thoughts.
  - Listening requires significant effort.
  - In brainstorming sessions, allow employees to “pass” and go back to them later.
- Retaliation
  - Most retaliation is “social”.
  - 80% of retaliation happens within 3 weeks of a report.
  - When organizations take extra measures to protect the reporter of a significant allegation, it is perceived as retaliation by the reporter!
- Quarterly performance meetings can be more effective than annual reviews because it is easier for employees to discuss issues that happened recently.
- Miscellaneous quotes
  - “The best employees are the ones asking the best questions.”
  - “Some people believe they are doing the right thing because they are not asking the right question.”
  - “Managers focus on complexity, leaders focus on change.”
  - “Crises are situations that draw out heroic actions.”
  - “The CEO is the curator of culture.” – Microsoft CEO
  - “Think of trust as a credit score, with the lenders being your stakeholders.”
  - “Culture is the immune system of your organization.” – Huffington
- Recommended books
  - Nudge
  - Riding the waves of culture

In search of an inefficient skill

Seth Godin wrote a post today about people becoming “machine-readable“. He argues that it’s a bad idea to become another cog in the machine. His advice echoes what I’ve heard elsewhere: if your current job depends on your efficiency, it’s time to find another job. Soon, humans will (only) occupy inefficient (creative, imaginative, inventive) positions, the rest being relegated (exclusively) to robots.

I hope to learn an inefficient skill this week at the Ethics & Compliance Initiative’s Best Practices Forum in Chicago. The topic: creating a speak-up/listen-up culture. I don’t think there’s an efficient shortcut to creating trust and making people feel safe. These states are still created by genuine human connections, by efforts that must first overcome our primitive instincts to expect danger at every corner.

It’s a valuable skill to have. And a rewarding one at that.

See you in Chicago.

ECI Fellows Meeting – Day 1

Whenever I attend a large meeting of E&C professionals, I learn about leading or best practices from other organizations. Of course, no organization is flawless but here are some of the practices that were shared yesterday during Day 1 of the ECI Fellows meeting:

In one banking organization, the E&C group must sign off on compensation plans. Their job is to look for elements that might drive unethical behavior.
In one aerospace organization, 40% of the employee performance evaluation is based on the corporate values.
In one healthcare organization, executives go through a regular 360 assessment, with a particular emphasis on feedback from subordinates.

And here are some concepts from Day 1 that got my attention:

However you design your compensation system, make sure you send a clear message that “compliance affects your pay.”
To influence ethical behavior through compensation, focus on variable pay over fixed pay and benefits.
Goals focus your attention (good) but can also create blinders to important and risky behaviors happening in your peripheral vision (bad).
Goals cause people to take on more risk (this can be good or bad). An independent party should evaluate those risks.

Finally, some thoughts from the session with Neel Doshi:

Data, in its most natural form, creates play. Unfortunately, many organizations weaponize data to create emotional and economic pressure.
Dashboards and scorecards don’t tell the whole story. Where there is red on a dashboard, it is certainly not proof that people are the problem. Go see for yourself. The further removed you are from the event, the stronger the blame bias.
If no one in your organization owns culture, then it’s a great opportunity for E&C to take the lead. It’s much harder to do so when another function claims ownership.

Programs and culture

When the Ethics & Compliance Initiative (ECI) published the findings of its 2007 National Business Ethics Survey, it identified two drivers reducing ethical risks in organizations: a well-implemented program and a strong ethical culture.

Ten years later, I regularly meet with colleagues working in large national or multinational organizations that do not have an enterprise risk management (ERM) process in place. When I ask them how they identify risks, I get blank stares. “How do you decide what training to provide, what processes to put in place, what controls to enhance?” More blank stares. ERM is the foundation, the starting point of any well-implemented program.

ECI was clear in 2007: a strong ethical culture has a greater influence on reducing risk only when we have a well-implemented program in place.

With the news full of corporate scandals pointing to a bad culture, we all want to work on improving our culture. But perhaps it’s time we go back to basics and work on our programs.

Culture is an outcome of our processes.

The adjacent possible

I am spending the next three days in Washington, D.C. for the annual conference of the Ethics & Compliance Initiative.

In the midst of countless plenary and breakout sessions, here is what I hope to accomplish, in increasing order of priority:

Network with colleagues
Learn something new
Learn to think differently

And you can hardly get to the third bullet without the first two.

That is how most people innovate, even E&C professionals. We start with our current body of knowledge, we bump into someone who adds a new learning, and our brain makes a new connection.

It all happens on its own – if we show up.

To learn more about innovation and the adjacent possible, read Where good ideas come from, by Steven Johnson.

The Embassy Analogy

I just returned from 3 days in New Orleans where I participated in the Ethics & Compliance Initiative’s Best Practices Forum. I was one of about 100 practitioners discussing how best to evaluate an E&C program.

During one of the roundtable discussions, a colleague asked how others deal with cultural differences around the world. When it was my turn to speak, I offered the “embassy analogy”.

When we walk into an embassy, we legally walk into a new country. The laws of the embassy’s country now apply to us. This is something we need to think about before we walk into an embassy.

Similarly, when we walk into our place of employment, we agree to follow the company’s rules and abide by its values. We might work in a country that doesn’t protect employee safety as much as our company, or allows employment discrimination based on race or gender, or doesn’t enforce its bribery laws. These “cultural differences” should be seen as irrelevant by ethical employers.

In a way, a company is like a tribe. My favorite definition of a tribe is: “People like us do things like this.”* If we refuse to pay bribes – or hurt the environment, or discriminate – people like us will come work for us and buy our products. Others won’t. And that’s just fine because we don’t want them. Our goal is not to be a company that everyone wants to work for. We just want the people who share our values. Others can go work somewhere else. No one has to work for us.

This attitude should not be mistaken for a belief that our values are better than those adopted by other groups or organizations. Different values could be just as good. And, who knows, maybe we are living by the wrong set of values. The point simply is that we have intentionally chosen our values and living by them should be a condition of employment.

Do you agree with the embassy analogy? Let me know in the comment section below.

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*HT to Seth Godin