Keep it fresh

If a business keeps selling the exact same product or service for 10 years (think Blockbuster), chances are that a competitor with a fresh offering will displace it.

Support functions in a business (like HR, finance, and ethics & compliance) don’t have the same competition. So many of them to the exact same thing, over and over again. Same onboarding, same reports, same training – while the world is changing.

Eventually this creates a drag on the business, giving an edge to competitors with better support functions. If we don’t recognize where that edge comes from, we will simply ask the sales force to “sell harder”. That pressure is likely to lead to wrongdoing (remember the fraud triangle?), which must be addressed by – you guessed it: stale support functions. Talk about a vicious cycle.

Never lose sight that changes in the marketplace impact more than your products and services; they also impact vital support functions like ethics & compliance.

Keep it fresh.

HT to Seth Godin

Changing the culture, one process at a time

When I tell people that culture is an outcome of processes, I often get a faint nod of understanding, mixed with an inquisitive look. They intuitively get it but they are not sure what it looks like in real life.

Let me share an example with a process that takes place in the very early stages of employee onboarding. Each month, I ask HR to give me a list of new hires. I then email each new hire and invite them to meet with me over Zoom for 15 minutes (I’ll go back to in-person meetings after the pandemic). During the meeting, I ask them to tell me a little bit about themselves, about the ethics program at their previous employer, and then I tell them about our ethics and compliance program and open it up for questions.

Why do I do it this way? Well, let’s look at the alternatives and try to guess which one can lead to a better cultural outcome.

  • Email. I could send a welcome email describing the program. This email would join dozens or hundreds of other emails, each looking more urgent and more important to this new employee who is trying to make a good first impression. My email would not tell me anything about this employee, where she comes from, what she does, or what questions she might have on her mind.
  • Phone call. That’s better than email. What’s missing is the handshake of an in-person meeting (whenever we can shake hands again), the vibes you get when you are within feet of another human being, and the employee experience of visiting your office, of knowing where you are physically located, which is often a location they will seldom have to visit.
  • Group training. This is very common in large organizations like mine. HR rounds up all the new employees, once every quarter, in a large room, for 3 hours, and shoots them with several 30-minute presentations about safety, quality, ethics, benefits, policies, etc. Here again, there would be no time for me to learn about each new employee or to answer all their questions.

There are other avenues but let’s stop here and consider: “Which of these experiences is most likely to result in an employee reaching out to you a year later when they are facing an ethical dilemma?

I sincerely believe that the employee who took the time to schedule a meeting with me, to walk to my building, to find my office on the 2nd floor, to shake my hand, to sit across my desk, to tell me about herself, and who was given the opportunity to hear about our commitment to an ethical culture and to ask questions – she is the employee that is most likely to reach out when debating what the right thing to do is. And since my job is to create a culture where employees speak up when in doubt, then I find that I have no choice but to adopt the process that will most likely create that outcome.

I have looked at only one process with you – the welcome of new employees by a chief ethics officer. There are tens of thousands of processes in your company right now. How you hire, how you compensate, how you promote, how you reward, how you treat each other – each influencing the culture. You might be responsible for a few dozens. What is the cultural outcome of each? How can you improve the outcome? Don’t know where to start? Look at a cultural outcome you dislike; link it to a process; then set about to change that process. And a cultural change will follow.

Just in time

Imagine a world where we don’t put stop signs or traffic lights at dangerous intersections.

Instead, we provide training to all students entering high school, telling them where the dangerous intersections are, hoping they will remember when they first take the wheel a few years later.

Sounds ridiculous?

Yet, many companies train their new employees on antitrust or corruption risks months or years before these employees will attend a trade show or interact with a government customers. Wouldn’t it be better for the training to be provided just before every trade show or customer meeting – as if they were approaching a dangerous intersection?

New employees and new risks

According to this article, most homebuyers are not warned about the new flood or wildfire risk caused by climate change. They know a lot about their new home: quality of schools, access to public transportation, and presence of lead paint. But they don’t know about the rising risks associated with climate change, mostly because the law doesn’t require disclosure.

Which got me thinking: are companies adapting their new employee training and onboarding process to account for the new risks associated with the pandemic and social justice?

Is yours?

Training options

There are different ways to train employees. Depending on the risk we face, some ways are better than others. Here are a few options (among many others):

  • Onboarding training – That’s the one-and-done approach. It should be reserved for no/low-risk activities, like “Here is where the corporate policy manual is.”
  • Basic training – Also for one-time training events, and recommended for low/medium-risk activities, like “Careful Email Communications”.
  • Refresher training – The training we repeat every year or every other year, for specific groups of employees. Best for medium/high risk activities, like “Discrimination and Harassment”.
  • Task-based training – This is when the training is baked into the actual tasks of the high-risk activity. Ideal for significant risks like antitrust, corruption, or trade sanctions.
  • Simulated-risk training – I call it War Games. A common example today is phishing your own employees to test their alertness, awareness and decision-making skills. When used for high-risk activities, repeatedly failing these exercises could lead to disciplinary actions.

Can we do this for everyone?

It’s the wrong question to ask when considering a new idea.

The answer will almost always be no, especially in a large organization.

When everyone had a BlackBerry, the person who asked for an iPhone was told no. Not because the iPhone wouldn’t work for that one person. It’s because the organization wasn’t set up to give everyone an iPhone. That question has killed more good ideas than we care to admit.

The same thing happens when you have a new idea about training your employees or conducting investigations or onboarding new E&C professionals. The trick is to experiment on the smallest group possible. Once you have measurable benefits, the better question becomes “How can we not do this for everyone?”

Q&As add more value per minute

Today, I will be hosting a Q&A call on the topic of internal investigations for my team of ethics & compliance officers (ECOs).

One of my colleagues, a retired FBI special agent, will be answering most of the questions. We have no agenda and no slides. We haven’t prepared in the slightest way, if you discount the 60+ years of experience we have between the two of us.

The idea of hosting Q&A sessions came to me after years of delivering formal presentations. I noticed that my favorite part of a one-hour presentation was the Q&A in the last 2 to 5 minutes. I loved the engagement and I felt, no, I knew, that I was adding real value. Eventually, I decided to allocate at least a third of any presentation to Q&As, no matter how much time I was given to present. Even when I took one hour of questions, I seemed to run out of time and employees would approach me afterwards for more.

So it wasn’t a big stretch to create Q&A-only sessions. I have hosted several on conflict of interests and investigations, and will soon offer other topics. The beauty of these sessions is that I don’t have to guess what’s on my team’s mind. They will ask us questions that really matter to them. We will add value no matter what. It’s a great feeling.

Any leader can easily hold these sessions. Choose a topic your employees care about. For example, you can hold a session for employees who joined your organization less than 3 months ago. Based on their questions, you’ll be able to identify ways to improve your onboarding process. Or you can do something a bit more challenging and hold a session about bullying or sexual harassment.

The density of value-add in Q&A sessions is worth a leader’s time. Give it a try.

Bravado and humility

Several years ago, I led a team of about 100 ethics & compliance officers (ECO) in one of my organization’s business units. I directly supported 6 Regional ECOs who in turn supported about 15 Local ECOs. Whenever we appointed a new Local ECO, the Regionals and I always covered conflicts of interests (COI) as part of our onboarding discussions.

Our message was simple: COIs are going to be your most common matters but that won’t make them any easier to solve at first. And our advice was equally simple: call your Regional ECO for help – she has resolved dozens of COIs. If she’s stumped, call me – I have resolved a few hundreds. And if I’m stumped, I know who to call for help.

Our goal was twofold: to offer support and to deploy some humility. By admitting up-front that we might not have the answer when they call for help, we gave these ECOs permission not to have all the answers for their employees on the spot. Being comfortable with saying “I don’t know but I’ll find out” is particularly important for E&C professionals. We go beyond simply asking “Can we do this?” and ask “Should we do this?” The first question might evoke bravado in some. The second question should trigger humility in all of us.

I can tell you now, or…

As E&C professionals, many of the problems we face at work result from poor communications.

  • An employee violates a policy she didn’t know existed
  • A manager doesn’t discuss the importance of onboarding training with his new employee, who decides to skip it
  • The team conducting a routine unannounced audit poorly explains the routine nature of the exercise and the local organization goes into a tizzy
  • A new compliance program, which took 2 years to create and significantly changes how things are done, is rolled out with little warning
  • One business unit in France develops a new process in response to a new law and does not share it with sister business units in the same country
  • Employees respond to a survey and never hear about the results

I could go on but you get the point. Poor communications create frustration at best and significant compliance issues at worse. Often, this happens because we think that we have too much to do to waste time telling others about what we are actually doing.

This reminds me of a quote I heard years ago when I didn’t take time to exercise: “If you don’t make time for health now, you better make time for sickness later.” Similarly, when we don’t take a minute to communicate about our E&C initiatives, we often spend hours fixing problems.

Book report: Primed to Perform – Frozen or Fluid


Reading notes by Yan Tougas

Organizations reach four (4) crossroads in each of their life cycles.  These crossroads create uncertainty and, in search of predictability, many leaders inadvertently adopt practices that limit their adaptability.

Crossroad 1 – The foundation.  Focus entirely on building a product, or focus on building a product and a culture?

Crossroad 2 – The scale-up.  As the organization grows and becomes desperate for talent, do you opt for skills and warm bodies over cultural fit?

Crossroad 3 – Institutionalizing.  When the organization is too large for informal HR processes, it must choose between implementing indirect motivators to manage the growth or scale the existing ToMo culture.

Crossroad 4 – Renewal.  Eventually, every organization hits a plateau.  Leaders can either ratchet up indirect motivators with rigid performance management systems, incentive compensation, cost reductions, etc., or choose a high ToMo path of renewal.  The urgency of everyday challenges usually leads to indirect motivators, which decrease total motivation, and with it adaptive performance, and eventually total performance as well.  It’s a death spiral.  The mortality of companies is less than human beings.  Just like humans, companies must adapt to survive.

The Medallia case study:

At Medallia, culture is not secondary to the mission.  It’s the only way to achieve the mission.  The two founders, Hald and Pressman, brought their own high ToMo to the company.  During the 10-year startup phase, “we were very focussed on getting food on the table,” Pressman recalled.  “So when I talked about culture, people’s eyes glazed over.”  [Editorial note: We can easily replace the first sentence with “While publicly traded, we were very focussed on meeting quarterly earnings…]

But they remained true to the vision.  They personally hired new candidates, looking for the right culture fit.  When they got too big, they hired a psychology doctoral student to find out why candidates were applying (because why you work drives how well you work).  Eventually, they created a culture interview team and they now have one culture leader for every 250 employees.  They learned that you need people who are not afraid of not being perfect, because trying to be perfect is counterproductive to learning, growth, and reaching full potential.  Trying to be perfect increases emotional pressure and reduces play, thus limiting the organization’s ability to adapt.  They understand that “winning” means having a winning record, not winning 100% of the time.

Their goal is to prime people’s why from their very first moment in the company.  Medallia’s week-long onboarding program is designed to reduce emotional pressure and create a sense of play.  It starts with a welcome letter explaining the culture.  Then, the very first task of an employee is to do something to make the company a better place to work.  Finally, employees are asked to be vulnerable, which often leads to a tearful room.  The program ends with each new hire reading a paragraph written by his or her hiring manager, describing the special spark that led Medallia to extend a job offer.

Leaders are then taught to actively combat the blame bias, to sustain the high ToMo that was created during onboarding.  Performance reviews are designed to reduce indirect motivation.  Career ladders help employees understand the skills they need to build.  Medallia’s Associate General Counsel is clear about the culture: “We assume good intent.  We assume competence.  We work collaboratively to solve problems.”  Not the typical adversarial relationship that legal teams face in most organizations.  Looking at the cost per hire, the culture programs more than pay for themselves.

The objective of a high-performance culture is to maximize adaptability.  Adaptive organizations require adaptive individuals.  Individuals adapt when they have high ToMo.  Organizations create high ToMo with direct motivators.

Research has found no relationship between ToMo and size of the organization.​