Resources
Case Study: Getting Beyond the Numbers: How to Identify the Root Cause of Unethical Conduct
By David Gebler, President, Skout Group LLC
The use of ethical climate surveys, which provide a baseline comparison of a company’s ethics standing against other companies and gauge internal changes from year to year, has become prevalent among many companies. But, while these surveys offer information on a company’s position on ethics, it’s often hard to discern the root cause of the behavior indicated in the survey. And without understanding what drives the behavior, it is nearly impossible to correct the problem.
At Skout Group, we’ve worked with several, US-based defense companies that have used the Ethics Resource Center’s National Business Ethics Survey to gauge their ethics climate. In this case study we’ll highlight the challenges of “Alpha Corp.”
Having commissioned the NBES survey, Alpha’s board of directors found the results disturbing:
- 31% of respondents had observed abusive or intimidating behavior towards employees (23 points higher than Alpha’s peer group)
- 77% of respondents who observed misconduct did not report it because they felt nothing would happen (47 points higher than Alpha’s peer group)
- 69% of respondents who observed misconduct did not report it because they did not think it would be kept confidential (47 points higher than Alpha’s peer group)
The company called in Skout to determine the root causes of these less-than- favorable results and recommend action steps that would be effective in creating a healthier corporate culture – and bring their numbers in line with industry averages.
Skout’s process involves the following steps:
Assessment
The heart of most unethical conduct, as well as the lack of reporting of violations, can be attributed to workers who feel alienated and disengaged. These negative attitudes crop up when employees cannot see or live their personal values in the workplace. At Alpha, for example, the observed “abusive” behavior was not due to incidents of harassment or discrimination, as was initially thought. Instead, the perceptions were related to how employees felt they were being treated by their managers.
Therefore, a critical assessment measure is the extent to which there is alignment between employees’ personal values, the values seen in the current culture and the values needed for the organization to be productive.
We used a combination of in-person focus groups and a Web-based values assessment battery (developed by Barrett Values Centre) to obtain a quantifiable measure of the employees’ values.
The values assessment revealed that employees at Alpha Corp. were burdened by major issues in the current culture that impacted their ability to do their work to the level they would like:
Uncertainty and Instability
What we discovered is that employees were working in an environment of fear. Concerns about the viability of their division or even the company as a whole were causing them to have a short-term focus, be self-centered and only see success in terms of the immediate bottom-line.
Uncertainty and instability were being compounded by the company’s senior leadership not communicating effectively downwards about the changes that were taking place. Alpha’s employees at all levels embodied personal values that emphasized the need to create alignment with their surroundings. This meant that even production employees wanted to know more about company goals, but information was not reaching the shop floor. Employees felt they were getting “sanitized” information.
Pressure to Compromise Standards
To get through the perceived crisis or “tough times,” managers were exercising excessive control. In these circumstances, unethical or even illegal conduct can be rationalized.
Lack of Respect and Poor Communication
The most frequently discussed respect issue was managers’ interactions with employees, described most often as bullying or “management by intimidation.” Participants felt that “fiefdoms” resulted in favoritism. There was also frequent observation of managers who would “chew out” an employee in front of other employees – which was perceived as abusive behavior. These managers were described as having an attitude of “my way or the highway.” Criticizing these managers, employees believed, would result in retaliation.
Lack of Accountability
In the focus groups and in interviews, participants expressed deep concern about schedules. They felt that unrealistic expectations were set at very high levels and that management employed “selective listening” when concerns were expressed. As a result, schedules and deadlines weren’t taken seriously because everyone knew they couldn’t be met. Employees also perceived that there were no consequences when a deadline wasn’t met.
Integration
The assessment revealed a workforce that was deeply committed to the customer (US Armed Service members) and to each other. A sense of “Fairness” was a critical personal value that was not appearing in the current culture.
Building on “Fairness,” Alpha’s leaders knew that their employees had a deep sense of right and wrong, and were looking to the company to provide structures that would permit this value to be lived at work.
Similarly, “Commitment” as a collective personal value highlighted a strong desire of the employees to feel that the company valued the effort the employees were willing to make. They felt deeply about the soldiers they supported with their products, as well as a commitment to their colleagues, many of whom had worked together for decades.
What emerged from the Assessment phase was a strong desire for “Consistency” among all levels of the workforce to overcome the debilitating sense that “Inconsistency” in the current environment was eroding the critical need for Fairness and Commitment.
Consistent application of rules and standards addressed the key issues that were reflected in the survey:
- Managers being required to make decisions consistently across the enterprise showed employees that leadership would no longer tolerate the petty fiefdoms that dominated the shop floor.
- Consistent enforcement of standards also gave confidence to employees that the rules were being taken seriously and that following the rules would be seen as expected behavior.
- Vague expectations of meeting deadlines could be replaced with clear instructions that gave everyone on a team a sense of who was expected to do what, paving the way for accountability.
Execution
As leadership sought to build on a theme of Consistency, insights were needed to understand how line managers and local leaders would be able to demonstrate consistency in their decision-making.
We used the Management Drives profiles to determine how leadership teams make decisions and how they would best be able to integrate concepts of consistency into work practices.
The Management Drives profiles revealed a very task-oriented, decision-making style, one that would respond to concepts of consistency if presented as a tool to support more efficient processes. Using the language of process improvement, line managers were instructed in how to boost communication to streamline processes and reduce confusion. Similarly, team meetings were reconstituted, not to make people “feel better,” but to ensure consistent dissemination of policies and standards.
The Result:
The workforce began to see clearer linkages between what their manager said and did and the company’s stated policies and goals. This increased confidence that the company “knew what it was doing,” and helped to build confidence that reported violations would be acted upon and that local managers would not be wielding unfettered control – which had led to fears that any company information would fall instantly into the hands of local managers. A healthier corporate culture was being achieved, as key metrics from subsequent ethics climate surveys revealed.
As president of Skout Group LLC, David Gebler works with senior leadership teams to accurately measure what motivates and drives behavior in organizations, using those results to improve their performance. He can be reached at .
