Jay Rosen considers what can influence an organization’s ethical culture, starting with senior leadership. Do your senior leaders practice what they preach? Employees can spot a disconnect from a mile away.
A company does not have an ethical culture unless top management commits to it. Employees not only listen to what senior leadership says but they watch how they act.
Employees look for signals about what really counts in an organization. But you must then move down to implementation of this goal. Employees want to know if senior leadership is committed to the company’s core values.
Equally important is a sense of organizational justice and fairness. Employees want to see not only that they will be treated fairly, but also that there is not a delineation of favorites and non-favorites in an organization. As we discussed last week, it is senior leadership who really drives the alignment between incentives and performance.
One of the key elements of effective leadership is listening. Are senior leaders in the organization listening to their people?
Do they give their people the opportunity to be heard as to whether the employees are receiving those messages? Do senior leaders get out of the ivory tower, go out into the field and meet with employees? Are there town halls or other types of group interactions? Do the employees see whether their leaders are living those kinds of values? All of this means establishing good communication from management with line staff.
Senior leadership must take the time to go sit with people or have an all-hands meeting or just reach out to a few people, have a cup of coffee with them, see how they’re doing. Those kinds of behaviors are very important in terms of driving ethical behavior from the top.
Listening can make employees feel like they are a part of the company, but it also allows management to further articulate and expand on their desire for an ethical culture to permeate the company.
By visiting national and international business locations and listening, senior management can further share the company’s mission and vision, and employees will have a greater understanding of how it all applies to them in the field.
It is crucial for perception to equal reality.
It is one thing for a CEO to say she has an open-door policy, that she wants to hear from anyone about illegal conduct or conduct that is antithetical to the company’s values. However, if no employee has ever brought forward any information because they are too afraid to approach the CEO, then there is an obvious disconnect between practice and reality at that company. It is even worse if there are past instances of retaliation against any employee who raised his or her hand in that manner.
Employees are watching for signals on what is important to senior leadership.
If top management says compliance is number one, but a person who skirts the rules is not disciplined – or worse, rewarded through promotion – for such conduct, word gets around.
It is crucial to more than simply model the conduct; leaders must run the business based upon ethical values. A key insight is how senior leaders treat their staff. But if senior leadership is only driven by the bottom line, that message will also travel quickly among employees. In short, words are nice, even important, but actions speak much louder than words.
The key is alignment between what top management says and the company’s core values – between what the organization says and what it does. This all comes from senior management getting out of their offices and talking to employees in the field to see not only what they think, but how they feel.
No company aspires to be unethical, and most employees do not want to engage in illicit behavior, but if senior management does not talk to employees, they will not know how their messages are being received (and perceived). It does not take long when there is a disconnect between what senior management says and what the employees take away.
Please join me next week for part three, when we explore the role of a Chief Compliance Officer in strengthening the ethical culture of the organization.
In case you missed the earlier installments of this ongoing series, please see the links below.