Christopher Bauer's Ethics Nexus

Adding Value To Your Values Statement

2012-11-24T14:37:32-06:00

My appreciation for values statements that are both well written and well implemented grows and grows. Done right, they not only drive cultures of ethics but, in the same stroke, drive better management, leadership, and customer service. This really is 'silver bullet' stuff with the ability to provide a major uptick to every organization's functioning and bottom line.

As I work with more and more organizations on the values statement development and implementation process, there are a number of problems I see time and time again. Let me hopefully save you some trouble by putting the three most persistent problems I see out here right now. Hopefully this will help you avoid them in your writing (or re-writing) process.

Too Long - If your values statement is too long, how in the world will each of your employees be able to keep it in mind all day, every day? If they can't keep it in mind all day, every day, how can you expect them to use it as a fundamental guideline for their decision-making each day? (And, if it isn't helping them make better decisions all day, every day, you really haven't finished honing it yet...) Plus, we've all heard the idea 'if everything is a priority then nothing is a priority', right? That applies 100% here. Until you're honed and honed to the point that your values statement contains only the most imortant, most persistent priorities for your employees' decision-making process, you aren't finished.

Too Much 'Squishy' Language - Clarity is king, queen, and the entire court here. If you are using words like "integrity" and "synergy", you automatically lose. It's not that those are bad things, it's that most people - myself included - really have no clue what they mean until you put them in practical, everyday terms. Until each and every employee knows how each item on your values statement translates into specific things they are to do or not do in their job, you aren't done.

Seeing It Part-Way Through - As I often tell my clients, writing and implementing a values statement is the toughest simple-sounding job most of us will ever take on. The concepts are easy in the extreme. However, really getting it right takes a lot of thinking, talking, and time. (In organization of over fifty or so, my experience is that it typically takes a minimum of six months, and sometimes up to twelve, to really get it right.) All too many organizations simply get tired of the process and settle for something that isn't really finished. Here's why that is dangerous... When effectively implemented - which is, I guess, a discussion for another time - a well-written values statement will be getting every one of your employees on the same train; you had better be getting them on the right train! In my growing experience, a poorly written or poorly implemented values statement can, in fact, be far worse than having none at all. The best possible outcome is that employees will resent the time taken in the development process and the false promise that things will be better/easier/more productive for them. Far more dangerous is the prospect of getting everyone on the same page but, in fact, getting them on the wrong page.

Need help in getting your writing or implementation process off the ground? Let me know and I'll be happy to help. In the meantime, see if you can avoid these three all-too-frequent pitfalls described above. Doing so will greatly increase the value of your values statement and, done right, that value can be huge.

Ethics & Values Culture Development: What's Your Plan?

2012-08-15T10:03:49-05:00

I speak all the time with executives and managers who tell me about their wish to develop a culture of ethics and values as well as the depth of their frustration in trying to do so. Far too many tell me that it just never seems to work for them. Generalizations are always a slippery slope but here's is what I find to be true in the overwhelming number of those cases - they have no real plan!

Developing a culture of ethics is exactly like any other plan - it needs to be formal, strategic, written and supported. You wouldn't, I hope, try to improve leadership or management or customer service simply by hoping that it will get better. Again, it takes a formal and supported plan.

As a place to start in developing a plan, here are four of the essentials that I see missing most frequently where a plan actually exists:

You haven't articulated your values in such a way that they are both absolutely clear to every employee and in such a way that every employee knows precisely how to bring those values to life in everything they do every day.
You have somehow confused ethics and compliance. Your employees know all the rules, maybe, but they don't reliably know what to do when there isn't a rule for something. (Besides, simply following the rules not only still allows for unethical behavior but it sets the bar really low for management, leadership, and customer service. If you're looking for exemplary service, simply following the rules isn't going to get you there.)
You haven't developed a formal, written, supported plan that clarifies your goals, your intended actions to fulfill those goals, and steps to monitor and improve the efficiency and effectiveness of your efforts. (Again, you are presumably doing this for every other essential part of your business, why not for ethics and values?)
You have succumbed to the fantasy that a one-time training session on ethics and values is all you'll need. (You may have also succumbed to the fantasy that an annual fifteen minute review of the ethics code online is going to magically allow your employees to really understand how to recognize and appropriately respond to often ignored or overlooked ethical challenges around them.) Are those kinds of training activities better than nothing? Absolutely - as long as you are realistic about their limitations and don't use them to create a false sense of security about the level of your employees' skills in the areas of ethics and values. Training and reinforcement needs to be on-going, live - at least in part - and focused on real-world, immediately applicable ideas and tools. Training also needs to be responsive to hearing what employees feel the barriers are to putting their training into use. Without giving them the tools they need to overcome those barriers, how could the ultimate outcome possibly be maximally effective?

If we were talking about any other type of training or culture-change initiative, each of these ideas would likely seem eye-rollingly obvious and you would already have a plan of action dealing with each of them. Yet, these lapses and oversights are seen in failed ethics and values initiatives all day long.

So, what's your plan? If you can use help in developing one, I hope you'll let me know.

Are Your Claims of Ethicality Either Ethical or Legal?

2012-07-02T14:17:10-05:00

An extremely interesting post on the Conflict of Interest Blog caught my eye this morning and I appreciate Jeff Kaplan for posting it. In that post, a case is described in which Goldman Sachs is reported to have defended some of their inappropriate activities, in part, by claiming that their promises of ethical behavior were merely "puffey" and not actually intended to be a promise of ethical behavior. Therefore, as the logic goes, they shouldn't be held legally liable for breaching their promise of ethical behavior. Besides perhaps setting a new low water mark for indefensible defenses, it also got me thinking about the hollowness of so many promises of ethics from a wide range of organizations.

For example, how many companies have an ethics code which, among other things, prominently states that ethical behavior will be expected. In essence, the ethics code simply promises ethical behavior. Besides the awkward circularity of that logic, how can you possibly assure - or, really, even adequately support - ethical behavior if you don't provide specific guidance regarding what that ethical behavior actually involves. Without such guidance, might not your organization's claims and promises of ethical behavior be just as likely to be viewed a "puffery" as were Goldman Sachs'? After all, an empty promise is largely what puffery is all about, yes?

The court has now held that false promises of ethicality are not a legal shelter and I suspect we can all agree that any type of false promise is a defacto ethical violation as well. So, is your organization prepared to show that its ethics code represents a genuine, concerted, persistent, effective effort to develop and maintain a culture of ethics? Remember, you need to be able to demonstrate all four of those qualities and the need to be able to do so has always been an ethical mandate. Now, however, it appears as if it might be a legal mandate as well.

Is Your Social Networking Policy Legal?

2012-06-29T11:24:06-05:00

In the rush to develop effective and enforceable social networking and social media policies, many organizations have written policies that are sensible on the surface but which are, in fact, both ethical and legal nightmares waiting to happen. Do you know whether or not yours pass either test?

For those of you living in the U.S., the NLRB had now written three reports providing guidance on do's and don'ts for social networking and social media policies. Though many of you live outside of the U.S., I would suggest that you review these reports as well both because they are thought-provoking and because similar ideas and mandates may well be heading your way at some point.

Even if you live outside the U.S. where the NLRB has no legal jurisdiction, their reports speak to a number of ethical considerations we should all keep in mind. Among these are:

The line between protecting an organization's reputation and the employee's right to express their opinions and beliefs online is perhaps not a line at all but, rather, a continuum. How can you write a policy that protects appropriate free expression but still provides reputational protection for fellow employees and your organization as a whole? I think that the NLRB reports provide a number a thought-provoking ways to consider accomplishing that.

Yet another continuum is found in the balance between making a policy broad enough to cover both the reputation of your employees and organization as a whole as well as the need to protect internal information and yet still be specific enough to be enforceable. Here again, the NLRB reports may give you some ideas, regardless of your location and, indeed, regardless of your feelings about the NLRB's stance on these matters.

Long time readers will know that I have long-advocated that a rough policy on social networking and social media is still better than none. After all, one can't possibly enforce a policy that doesn't exist. In the rush to develop a policy, however, don't overlook that case law is still rapidly evolving and your policies are, consequently, likely to need to evolve rapidly over time as well. Hopefully a careful reading of these three NLRB reports, along with any future reports, may well help you think through how you can develop something clear and enforceable that will protect your organization while still allowing both the legal and ethical protections every employee deserves.

Associaton of Certified Fraud Examiners Releases 2012 Global Fraud Study

2012-05-08T17:07:39-05:00

The Association of Certified Fraud Examiners (ACFE) had released its 2012 "Report to the Nations on Occupational Fraud and Abuse". As all ACFE studies, it is a trove of interesting and useful, if sometimes alarming, data.

The current study analyzes data from 1,388 verified fraud cases from around the world and these data were reported via an online survey of ACFE members between October and December of 2011. To be included in this study, the investigation of these cases must have been completed at some point between January 2010 and the time of the survey.

Among the many compelling findings found in their executive summary are the following:

On average, survey participants estimated that typical organizations are losing approximately 5% of revenues each year to fraud and abuse. (This corresponds closely to the figure frequently cited for major corporations in the U.S. So, these findings suggest that this estimate is both worldwide and probably, in fact, unrelated to the size of the organization.)

The median fraud loss in this sample was $140,000 but more than a fifth of the cases resulted in losses of greater than $1,000,000. (Here again, theses figures correspond relatively closely with domestic U.S. studies from the last several years.)

Occupational fraud reported in this study was far more likely to have been discovered by a coworker than through formal oversight and audit programs. (This is why effective ethics and compliance training must help employees learn to recognize danger signs for fraud and abuse as well as how best to respond to them. After all, they are the folks most likely to actually notice something is amiss. Obviously, formal oversight and auditing process are critically important; just don't fool yourself into thinking that they are any more effective than they actually are.)

A significant majority of the perpetrators in this study (87%) had neither been charged or convicted of a fraud-related offense or punished/terminated by a previous employer for fraud. (This provides stil more data supporting the already-large pool of evidence that, despite our stereotypes, only a fraction of fraud and fiscal abuse is perpetrated by the 'criminaly-minded', reagrdless of one's definition of 'criminal-mindedness'.)

It is interesting that, as has often been the case with ACFE studies, these findings are based on 'worst case' reports of informants. (In other words, informants were asked to report on the worst case they had seen during the study period.) Although in theory that should skew these data significantly in the direction of overly liberal estimates, the findings are far more similar than different to those of other studies not using a 'worst case' data set. It's tough to know exactly what that means but my money is on the likelihood that patterns of fraud and abuse are so similar across cases that the range from best case to worst case, once the amount is large enough to be both reported and material, is actually smaller than one might imagine.

Much, much more is reported in this current ACFE report and giving it more than a passing glance is highly recommended.

"Better Ethics NOW" Now Available on Kindle

2012-02-22T09:24:09-06:00

Just a quick note to all you Kindle owners to let you know that the latest edition of my book "Better Ethics NOW: How To Avoid The Ethics Disaster You Never Saw Coming" has now been released for the Kindle and is available here on Amazon.com for only $9.99. (For those of you outside of the U.S. and Canada, it is available on all of the other Amazon international sites as well.)

Should you download it it and like it - as I certainly hope you will - it would be terrific if you could leave a review for it on its Amazon page.

In the meantime, happy reading and thanks!

Some Good News and Bad News From The Ethics Resource Center's 2011 National Business Ethics Survey

2012-02-06T14:44:23-06:00

The Ethics Resource Center recently released the results of their 2011 National Business Ethics Survey. Long term readers of this blog and my Weekly Ethics Thought will know that I am always impressed with their research methods and clarity of reporting. This year's study is no different in that regard.

While, as always, I heartily recommend downloading a copy for closer personal review, here - with a little added editorializing - are the key points from their executive summary in the meantime:

Since their prior survey two years ago, the number of employees in their sample who witnessed misconduct at work fell by four percent. That would be great news except that the new number is still a stunning 45 percent.

Those reporting misconduct, once seen, rose two percent. Certainly good news but, again, not-really-so-good in that the improved figure is only 63 percent making reports in this sample.

Alarmingly, retaliation against employee whistleblowers rose significantly to 22 percent. While the form and intensity of that retaliation can be all over the map from worst-case to relatively benign, that any type of retaliation should be reported in that high a percentage means that organizations need to work far more diligently to train on and rigorously enforce non-retaliation policies.

Reports of pressure to compromise standards rose five points to thirteen percent - also a significant cause for alarm, it seems to me.

Perhaps of the greatest overall concern, the percentage of companies in their sample with weak ethical cultures climbed back to "near-record" levels - an astounding 42 percent. If that isn't a call to re-double our efforts to build and maintain cultures of organizational ethics, I don't know what is.

So, did ethics improve in the last two years according to this study? A little. Kinda. In some ways. However, sorry to say, from my view the road ahead, overall, remains longer than the road behind.

The Ethics Lessons Learned From News Corps and Rupert Murdoch

2011-07-25T18:30:46-05:00

The news world and blogosphere have been filled for the last couple of weeks with all of the revelations regarding Rupert Murdoch and the wild ethical transgressions by employees of News Corp. Along with these stories there have been loudly trumpeted all the valuable ethics lessons we are to have learned from this still-unfolding debacle.

So what exactly have we learned? Here, I believe, is precisely what we have learned; nothing. Really.

For all the lurid details and alarming oversteps, please tell me one new thing we have actually learned about ethics here.

Is it news that owners and executives still maintain the responsibility for the work done in their chain of command?

Is it news that tone at the top - including the top of any portion of the organization (e.g. managers and supervisors at all levels of the organization) - has a significant impact on the behavior of employees and contractors alike?

Is it news that transgressions which are ignored are likely to continue if overlooked and essentially certain to continue if rewarded?

I keep looking for even one new thing about ethics that we are to gather from all of this and I seem to keep coming up empty.

If you have gleaned something new and enlightening, I do hope you will come forward and share it.

In the meantime, sadly, all I think we may end up learning from Rupert and son is that - as has historically been the case so often - simply knowing what is right can be a startlingly poor predictor of doing what is right. (Especially when there is so very much to gain by stepping, even egregiously stepping, over the line.)

Two Interviews on Developing High-Impact Values Statements

2011-06-20T10:44:25-05:00

Thanks to i-sight software for publishing excerpts from two interviews they did with me on developing high impact values statements. As you've all heard me say before, a well-developed and appropriately implemented values statement will not only go a long ways toward developing and maintaining a culture of ethics but will also do so much more. Done right - and it really does need to be done right - a values statement will drive better management, leadership, customer service and branding.

Interested? You can find the two interview excerpts here and here. Enjoy!

Three Great Ethics Videos By Students

2011-05-16T10:51:16-05:00

I am constantly asked for ethics-related videos and rarely have much to offer because so few are really very engaging. So, I was thrilled to have a friend point me in the direction of these three terrific student videos on ethics.

These all came from a competition sponsored by the Center for the Public Trust and, if this year's winners are any indication, I'll look forward to seeing the new ones each and every year. Terrific pieces of student work on ethics, I thought. Congrats to these young videographers for a job well done!