Monitoring ethical behavior across your organization is a challenge! How do you look for indicators of ethical problems in particular markets, departments, teams, etc.? Some will be detectable using technology (e.g. third-party payment issues, or expense manipulation), some through audits (e.g. weak controls, or missing inventory), and some through your reporting channels. But that’s all quite reactive. Can you get ahead, can you be predictive? Possibly. The fields of behavioral analysis and ethics are starting to reveal some interesting links.

Ethical problems lead to violations, just as social problems lead to criminality. Law enforcement (in many places) is becoming about prevention, not just enforcement. So too ethics & compliance must focus on culture and behaviors, not just controls and punishments. What follows are a few (non-scientific) behavioral indicators I’ve observed repeatedly in organizations facing ethical problems and violations.  

Secrecy

Beware brown envelopes

If a team is shrouded in secrecy there better be a good reason. Working on a top-secret new product? Highly confidential and sensitive client project? Fair enough. But if questions about the need for secrecy are rebuffed with deflecting and convincing statements – usually focusing on how vital the team is to the business (revenue, knowledge, experience, etc.) – start to be concerned. There is no real need in most organizations for intense secrecy and shutting colleagues out.

Rockstar reputations

If a team has ‘Rockstars’ who make lots of money, answer to no-one, and act like divas when challenged, start to get more concerned. These Rockstars like to pretend what they’re doing is actually akin to finding the God particle, summitting Everest in swimwear, or communicating with aliens. Phrases you might here, include:

  1. “Now look, I’ve been doing this for years, and I know what works and what doesn’t.”
  2. “This is the trenches, no place for big rulebooks … it’s dog eat dog … kill or be killed … bring home the bacon or don’t come home [etc. etc. etc.].”
  3. “Well, this is [insert name of country], and if you think you can act here like you do in [regional or global HQ], you won’t last long.”

Industry and local knowledge of course matter but true experts distill simplicity from complexity. Those behaving unethically and lying prefer the opposite, overcomplicating.  

Toxic culture

Where there are unhappy people there are (often) also ethical problems. Cultures that tolerate toxic masculinity, negativity, aggression, bullying cultures, and/or demand complete loyalty to the leader, almost always also tolerate cutting corners and poor ethics.

Look for employee turnover, negative feedback on exit interviews (or no feedback at all), a lack of questions/reports for the E&C team and trust your instincts. If you see glum faces, people looking down as they cross your path in the corridor, hushed chats in hallways, and silence whenever managers are nearby, you probably have ethical problems too.

Sell or die

Are those “making the money” (fee-earners, salespeople, partners, etc.) the only ones that matter? Cultures where sales and income are all that matters naturally lead to corner-cutting and ethical mishaps. Of course, the organization needs to hit its targets. This is still possible without treating anyone not making lots of money for the organization like an unwanted appendage.  

Clones and drones

When you talk to the management team, and those below, do they all say the same things? Do you hear the phrase, “It’s the way things are done around here?” If so, speak to those who quieten when these managers are around. No organization thrives (for very long) on homogeneity or opinion. Diversity in the management team should be reflected in the diversity of opinion. If most people look the same, talk the same, and act the same, you’ll have a problem at some point.

Conclusions

It’s quite simple, if it doesn’t sound right, look right, or feel right, it probably isn’t right. Behaviors that are too similar, hostile, secret, or complex are seldom helpful in furthering organizational objectives, let alone avoiding ethical challenges. The solutions are many and complex, but the most important one: diversity (of people and opinion). If you’re trying to create a culture of ethics, start there.

Does any of this sound familiar? Be great to hear your examples and experiences.

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