Culture of ethics: catching people in rather than out

"It's alright, When people do something wrong we'll catch them out"
the Head of Risk Compliance told us

The compliance guy's view sounds sensible, doesn't it, in the circumstances. Except that catching them out afterwards is already too late.

This was a global engineering firm, in rehabilitation with the regulator after a fine and prosecution for a serious ethical misconduct.

I was running a programme of ethics and values with them and their CEO who said 

"We need to build a culture of ethics"

But in fact catching-people-out undermines a culture of ethics. 

It's more important to catch-people-in: so that they know they have done the right thing. 

This helps avoid doing the wrong thing, and helps people know why it all matters. That's the best way to avoid ethical contraventions and keep on the fair side of the regulator.

In the same client company, the CEO shared concerns that it was taking too long to recover market position and investor confidence. After damage to reputation it was much harder to heal relationships than they expected.

The COO was worried about lack of innovation,  too long to get things to market - competitors were beating them. 
And the biggest concern was lack of collaboration. The problem of silos and infighting between divisions and constituent businesses was worse then ever. People pulled back into small teams and cabals.
Well of course they did. They were scared of being caught out.

Far from making the company stronger, the whole ‘catching-them-out’ approach had caused another huge problem:
inertia 

We saw all the cultural symptoms:

• People looking over their shoulder…
• Afraid to ask a question or check…
• Lack of trust between colleagues…
• Restricts ideas...
• Creates dependency...
• Crushes confidence...

This will kill the business.

No risk, no gain.

Inertia is a crippling business risk. 

How do you take the right risks with the right safety measures? 

Manage risk rather than avoid it?

By catching people in.

The regulatory bodies are no soft touch. It's not a question of paying a fine and getting on with business as usual. The company has to show how they’ve changed, especially how culture has changed, how this can be measured and sustained.

To do this, organisations need a clear code of conduct and careful management legal and conduct risk. They need to provide guidance to make every day decisions, and an environment of candour and confidence around risk.

• Reinforce the guidelines
• Show what ‘doing the right thing’ means, and why this matters
• Provide context overall and relevance to each part of the business
• Help people navigate the grey areas

With the engineering company, we made the principles really clear and trained managers in using a toolkit. Catching people in was a big part of the success. 

• Reaffirm good decisions
• Share what’s gone wrong in a way that people can learn how to do it better
• Share what’s gone right and how this helped to manage risk
• Acknowledge the small actions and choices made every day
• Say thank you for taking the time to listen or for raising the issue so we can manage the risk

Upholding ethics needs to be a fast reaction. This works best when people are confident about doing the right thing – not because someone’s watching or telling you what to do.

That’s why ethics comes down to commitment more than compliance: Doing the right thing because you WANT to, not just because you have to.

And commitment begins with Belonging, choosing to uphold the principles of the organisation you belong to. Belonging makes ethics a team thing: shared responsibility.

This is far more powerful - and commercially productive - than an army of compliance officers telling you what you can't do.

Go on, find a colleague who’s done the right thing: catch them in.

We help organisations create a culture of ethics and belonging

Drop a line if you'd like to try our toolkits for 'How to deal with ethical dilemmas' and 'Catching people in' 

isabel@belongingspace.com
www.belongingspace.com


See also
Freedom to Speak Up: Candour and ethics
http://belongingspace.blogspot.co.uk/2015/02/freedom-to-speak-up-candour-leads-to.html