Managing Values, Author at Business Ethics Consultants

Reinventing Organisational Post-Covid Codes of Conduct

The seismic shift in workplace culture and the nature of work caused by the pandemic is resetting how we think about the role of work in our lives and how we collectively organise. A recent research study found that while working virtually collaboration within groups increased however organisational silos have gotten deeper and further apart. This might suggest that the human side of enterprise has strengthened while the efficiency of the whole has deteriorated. Also, the concept of work also as the best avenue for human flourishing has come under review. The lockdown has provided many professionals and employees with an opportunity to reassess the social price in terms of family relationships and leisure pursuits that the 24/7 pace of modern workplaces demand. For some, the price is now seen as too high and not worth the sacrifices required. The most talented are rethinking how they too can redesign their post-Covid careers.

On many fronts, organisational leaders’ are being challenged to build back better by recognising employees’ social needs and the interdependence of business prosperity and societal progress. The widespread public backlash and anger at corporations taking taxpayer’s money in the form of job keeper payments while declaring increased profits has heightened public angst that businesses who profit at the expense of society impoverish the next generation.

For those who want to be part of a new story of thriving businesses and thriving communities, there’s no better place to start than by reimagining your company’s Code of Conduct and recasting it to recognise human needs, desires and ambitions with their interdependence with human flourishing. Cultural visions built on values of inclusivity, diversity, flexibility, resilience, and purpose are the basis of healthy workplace cultures.

You won’t read about it in economic textbooks, but we humans struggle with isolation; we are social animals. Working together in an office, a factory, a worksite, a school, even parliaments provide a needed opportunity for relationship building and social contact. Many of us took the benefits of the social dimension of workplaces for granted until they disappeared. While millions of Australians have become comfortable with remote working they are also keen to get back to workplaces to regain that social dimension but in a a new way that no longer segregates personal and professional lives. Remote working has also dealt a blow to managerial micro-management, and it’s not likely to return. Hopefully, what we have finally put behind us is the “Monday to Friday sort of dying” as historian Studs Terkel described the modern workplace experience.

Like building a solid house, a code of conduct lays the foundation for leaders to design and build the type of workplace culture that enables their people to perform at their best. Such a build entails erecting a complex social infrastructure designed by appropriately skilled people in human social-psycho dynamics. A supportive social infrastructure enables its members to understand the rules of engagement; how they should behave as individuals and as a community in pursuit of a shared purpose and vision for success. It represents each organisation’s unique success formula. By making the rules clear, organisational members gain self-control from knowing what is expected and where boundaries of acceptable and unacceptable behaviour lie. It builds the “why” behind organisational values, enabling members to achieve more than any individual or group could have achieved alone.

Many organisations fail to recognise that the primary purpose of a Code of Conduct is to protect employees from unsafe work practices, exploitation by third parties, bullying and harassment by co-workers, changing regulatory requirements, and potential adverse technology impacts. Codes need to be reframed to meet the new psychological workplace contracts that have been forged during lockdowns. Code of Conduct engagement should be the mortar that binds the structure and its people together. It is a living document reflecting the dynamic internal and external environments where organisational members operate. It resonates with how people see themselves and how they behave, perform and excel. Its stories, scenarios and examples, reflect their lived experiences.

Everyone wants to work for an organisation that cares; one that listens to enable its members to achieve and flourish from their workplace experiences. Shared Purpose is the glue that holds employees together. Let’s take our lead from the example recently set by Canva’s young co-founders.

Canva’s leaders recently pledged to give a 30 per cent stake – valued at $US12 billion ($16.4billion) – to a charitable foundation seeking to eliminate extreme poverty. In this one visionary initiative, they created Australia’s largest charitable foundation. Explaining their decision to tackle existing world wealth inequity they justified their actions because of their vision that we already have enough wealth to reduce world poverty; what’s missing is the will and the vision. They recognised too that a social purpose transcends any commercial goal in terms of employee satisfaction. That Canva employees’ motivation is driven by being part of an organisation with a purpose beyond making profits and this vision attracts talented people.

So, when we come to build back better, let’s start from the perspective that ethical leadership begins with purposeful culture design. Most people want to do their best at work; they want leaders to invite them to contribute to a workplace culture that enables them to do this, and in return, both the enterprise and the individual can shine.

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The Human Dimension of Conduct Risk

What would you do if you found a colleague’s behaviour unacceptable, even unethical? Most of us believe we will speak up; however, research shows we often fail to act on our ethical intent. The result is moral muteness, the gap between our ethical ambitions and behaviour. Such a personal values gap emerges when organisational members experience their workplaces as unsafe places to raise concerns. It is often the root cause of employees’ cynicism around leaders’ authenticity in upholding espoused organisational values.

Ethics research shows that when employees hear their leaders discuss ethical challenges and role model ethical behaviour, they too are predisposed to ethical accountability. Where indifference is perceived, employees, in turn, assume they can ignore ethical accountability.

The social phenomenon of ‘moral muteness’ emerges at work when leaders fail to speak to the ethical challenges and values tensions that often accompany the pursuit of results. Culture translates in language, and choice of language signals what is important. An organisation’s language that amplifies economic or political imperatives and fails to mention the accompanying ethical challenges or tensions with espoused values effectively silences consideration of the day to day ethical dimension of workplace decisions. Moral muteness flourishes where leaders fail to make ethical considerations part of everyday conversations. To safeguard against it, leaders need to take purposeful action to manage cultural pressures. Organisational culture is dynamic, requiring leaders to regularly measure and adjust systems and processes to ensure a speak up culture emerges that can protect employees from harm and organisations from reputational damage.

Moral muteness flourishes from the Boardroom to the post room, with its practitioners oblivious to the inherent risks this creates. Leaders’ personal reputations have never been more vulnerable to workplace pressures than in today’s low trust hyper-connected world. The backlash against leaders found wanting is swift and fatal, as recently seen in the departures of AMP’s chairman David Murray; Westpac’s ex CEO Brian Hartzer, Rio Tinto’s departing executive team, and previous CEOs of QBE.

Recognising the sources of our moral muteness

Protecting organisational cultures and personal reputations from ethical outages means forewarning ourselves of the risks and ethical challenges to be addressed. We now have extensive “known risks” that need to be offset with appropriate organisational systems. A well-documented root cause of risk and unethical behaviour is the pressure of unrealistic goals, timetables, and targets on employees; another is our predisposition to loyalty influencing us to make emotional rather than rational decisions. Research shows that loyalty to managers’ or company survival can push organisational members into unethical practices. These actions are then justified because there was no personal gain. Employees need to be forewarned about the dangers of such rationalisations and how these can lead them into unethical and even illegal practices. All organisational members need learning opportunities designed to raise personal awareness of the ethical risks generated by their workplace dynamics. Promoting a richer understanding of the individual cognitive biases, rationalisations, and contextual pressures characterising modern workplaces enables organisational leaders to design systems that better anticipate and remove these hidden barriers to ethical behaviour. Authentic workplace ethics skills training involves helping organisational members better understand themselves and their biases and how organisational culture can shape their decision-making frameworks. The old maxim ‘If you don’t know what you stand for, chances are you will fall for anything’ is ringing loudly in today’s cancel culture.

Awareness-raising is essential to behaviour change, as much of our human behaviour is driven by contextual cues out of our conscious awareness. Ethical leadership now involves drawing on behaviour science insights to design systems and processes that make it easier for employees to act ethically and offsets moral muteness. Initiatives such as inviting employees at every level to review and challenge prevailing organisational mindsets and assumptions lays the groundwork for meaningful behaviour change. Raising awareness of the more than 100 biases and short cuts that can waylay our best intentions will also better prepare individuals for the ethical challenges they face. Designing organisational policies and processes that are fit for purpose for specific areas of the organisation rather than issuing one-size-fits-all protocols makes compliance more manageable.

Risks are known and can be eliminated using behaviour science insights

Behaviour science is showcasing evidence-based research into what people do – or don’t do – when confronted with ethical issues as well as why they do what they do. One of the significant insights from behaviour science is that we can be different in different contexts. While ethical in some contexts, we can behave unethically- and remain oblivious to our inappropriate behaviour – in other contexts. Our self-servicing bias helps us evade personal responsibility while blaming others when things go wrong and it enables us to take credit for others’ work when it is to our advantage.

A “conformity bias” predisposes us to change our opinions to conform to our group and our ‘affinity bias reinforces this.’ Affinity bias operates where individuals strongly identify with a group. Both biases add to the pressure of group loyalty, and all three influences create a context where moral muteness and group think prevails.

The science tells us that organisational members behave ethically when:

Respected leaders talk about the value of ethical behaviour
When employees find themselves in organisations that value ethical behaviour
When organisational members are made aware of the benefits to others of their ethical behaviour.

Responding to higher ethical accountabilities requires Boards to purposely choose CEOs capable of designing organisational cultures that enable their members to have agency and are supported by organisational systems that promote organisational learning around ongoing systems and policy failures.

We can all expect to be challenged to find our voice, either to avoid harm or to protect our integrity. Therefore, it is within everyone’s interest to recognise the origins of moral muteness in organisations and work together to break this silence.

How to Act Ethically at Work

Every workplace action has an ethical dimension because no single action can exist in a vacuum. Everything we do affects others around us. Acting ethically means anticipating our impacts on others and avoiding or seeking to minimise potential negative consequences. To forewarn yourself about workplace ethical challenges, pay attention to:

Context: The context you are in will significantly impact how you act more than your character does. Be on the alert as social pressures encourage us to turn a blind eye to others’ misdoings. We may even take our lead from the actions of others.

Beware of Goals: You may find yourself justifying your behaviour choices as necessary to achieve your goals. If this is the case, you are on a slippery slope to more unethical behaviour. Stop and review your values and use these to guide your actions.

Beware of Loyalty: Many people consider unethical behaviour as only those actions that result in personal gain. This belief causes us to fail to see that our choices are corrupt. Lying to protect others or fudging figures to assist with team targets is unethical, even if there is no personal gain.

Inner thoughts: People behave unethically up to the point that they can make excuses for their behaviour. These excuses are the stories we tell ourselves. The story may be that everyone’s doing it, no one gets hurt, or someone depends on me doing this. Or we may think that it is time pressure that makes us act this way. Tune into your internal dialogue and stay alert to ethical slippage.

Well-being: We are more prone to act in ways we shouldn’t when tired or stressed or being unfairly treated. In these situations, it pays to check with a trusted colleague whether your action is an ethical one.

Framing: How we ‘frame’ a decision can cause us to ignore its ethical dimension. Framing is the context we give a situation or action. If you hear yourself saying ‘it’s only a business decision’, chances are that you are ignoring its ethical aspects. Avoid making decisions based on a narrow range of information.

Friends and family: Be on alert when friends or family ask you to do something. Your loyalty to them may override your duty to your organisation and leave you slipping into questionable actions.

Competing values: Ethical challenges arise from competing values. A typical example is admitting the organisation has made a mistake versus incurring negative media attention. We often pursue short term wins at the expense of harmful consequences. For instance, micromanaging employees at the cost of their social needs. Anticipate, confront and discuss tensions that may arise to enable you to manage them better.

Learning to think ethically is a skill that needs to be continually honed and updated. To improve this skill, companies should use emerging social research on the key motivators and shapers of workplace conduct as shared by EthicalSystems.org.

Simple rule of Business – No d*ckheads allowed!

This might seem a bit harsh, but it speaks to a growing world -wide organisational mantra. Stanford professor, Robert Sutton’s book “The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t” unearthed an increasing trend for major corporations to sign up to a “no asshole” rule. Companies like Warren Buffett’s Berkshire Hathaway, Barclay’s Capital, IDEO and SPM Communications, although the last two prefer to call it “the ‘no jerks’ rule.”

SPM founder, Suzanne Miller, won a national contest for women-owned business, in part because her company applies the no-jerk rule to both employees and customers. “It struck a chord with the judges and audience.” Ms. Miller said. “Everyone has worked somewhere crappy.”

Behaviour Science shows that our evolution has wired us to put up with just about anything to “fit in” but is tolerating workplace incivility too high a price to pay in our new era of conduct risk?

Is it OK, or even possible to call out incivility, especially when perpetrators are usually in positions of power? Traditionally, poor interpersonal behaviour has been overlooked or silently tolerated in pursuit of short-term results, while long-term costs go uncanvassed. Shattering entrenched cultures might well need something as confronting as a “No d*ckheads” policy. Poor attitudes and behaviour poison relationships and undermine cultural integrity.

In Australia, just about everyone will understand the message underpinning ‘d*ckhead’ status. Webster’s dictionary defines the term as vulgar slang: a stupid, obnoxious, or annoying man. But if we focus on the behaviours, the term can just as easily apply to females.

Is it ethical to speak in such derogatory terms? The short answer is ‘no’, but the principle behind such a philosophy is to be upfront about what you expect from a relationship and to expose behaviour that undermines stated organisational values.

I belong to a sports team for veterans. It’s a group of guys who get together for a social game of football: a sort of ‘men’s shed’ with rigorous exercise. From the outset we have had a ‘no jerks’ rule. We go for coffee afterwards and the same rules apply. We don’t want petty whinging, criticism of self or others, cliques or perpetuated bad blood. We are united by a sense of common purpose: to play the game we love in the right spirit.

Workplaces should be the same.

Start-ups are mostly characterised as inclusive places to work. Most eschew the norms of policy, working hours, productivity, and bureaucracy favouring flexibility, outcomes and contribution to the whole working experience – for everyone. There isn’t a formal ‘no jerks’ rule and instead, new starts are courted in an informal way – over coffee – where principals check out if they are ‘just like us’. Inclusivity characterises their building blocks.

Is there a difference between a habitual jerk and occasional jerky behaviour? Well clearly yes. Everyone has a bad day or an adverse emotional reaction to an incident. The one offs don’t make you a jerk but, in a jerk-free workplace, such behaviour is called out by a colleague at the time it happens, even by a junior colleague. In good cultures, leaders create safe places for people to raise issues of concern; they skill their people in calling out inappropriate behaviour.

Robert Care, CEO of the Arup’s Australian and Asian operations, described their approach in this way:

“Three years ago, I became the CEO of our Australasian operation. It occurred to me that there was an issue (not just in the Australasian part of our operations) that needed to be dealt with. I then heard something in September 2005 that started me thinking, and then talking to my close colleagues. They encouraged me to speak more widely in my organisation and eventually, we evolved a ‘no d*ckhead policy. ”

Engineering cultures have an expression for appropriate and inappropriate conversations. They call it “above the line” and “below the line”. Following the principle of “praise the worker, blame the work” they encourage all employees to focus on how something impacts the project – positive or negative – rather than what someone may have done wrong. “Let’s keep it above the line” is a remark you’ll often hear as people call out inappropriate behaviour.

So, what’s it to be? Allow d*ckheads to spoil your culture or begin tomorrow by asking people to call them out. There’s an old saying, “you judge a company by the company it keeps.” The choice is deliberate, not random.

The professionals’ role in a post-Covid environment

The ethical challenges for professionals

Digital technologies have made us all global citizens, where, in real-time, we see how business impacts at local and global levels. These impacts heighten our professional, ethical accountabilities to ensure such impacts are not diminishing human social progress.

The human toll wrought by Covid-19 vividly demonstrated our shared humanity. To ensure we create a better post-Covid world than the one that existed before, we must draw on our shared humanity and ability to reason. The pandemic exposed the shortfalls of our current leadership models and governance systems that have spawned a winners take all economy characterised by casualised labour, stagnant wages and human slavery; where business corruption is robbing societies of the medical, educational, and social investments needed to protect human flourishing.

Plan a new approach rather than “Snap Back”

The World Economic Forum (WEF) calls on those in power not to “snap back” to pre-Covid inequalities. Instead, they call on professionals to leverage new digital technologies to design “moon shots” that consciously design for a more humane economy. They recognise that technologies are not neutral and can harm as well as enhance human well-being. Named The Great Reset , WEF is engaging leaders and sharing resources to ensure digital technologies are designed to enhance societal progress.

The accountancy profession is already helping to raise the ethical floor below the global marketplace, enabling better governance through integrated reporting. Still there is much more to do to answer Society’s call for ethical leadership.

Business leaders now find themselves on a global stage held to account for the intersection of ethical accountability and commercial imperatives. Existential questions around business’ role in addressing societal challenges, including climate emergency, AI’s impacts on global workforces; global corruption and the shape of humanity’s progress in a digital world, need to be addressed in Boardrooms around the world along with new governance models that learn from the mistakes of the past.

Global societal movements such as #MeToo, Black Lives Matter and climate emergency have made personal and organisational reputations vulnerable to changing societal values. What happens inside corporations inevitably finds its way into the public arena, where accountability for ethical impacts is increasingly in focus.

New visions of responsible and responsive business goals

The good news is that many global leaders are already responding to WEF’s call for “A Great Reset”. They acknowledge that when the goal of the system changes, the system itself changes. They are talking about transforming capitalism to make it more inclusive and socially accountable and purposely designing human-centred systems.

All professionals have already signed up to protect Society’s interest as part of their professional license. We need to venture further and assume a proactive role in ensuring new technologies enhance our human well-being. The accountancy and legal professions have a box seat steering the 4^th Industrial Revolution, being embedded in institutions in all sectors. These inhouse professionals can be midwives to the birth of a more socially inclusive world enhanced by digital technologies.

By assisting organisations to focus on human-centric designs as the characteristic of our Digital Age, professional will continue to raise the ethical floor below the global marketplace.

Edited version of the Dr. Attracta Lagan presentation at the APESB 15 Year anniversary event 21 May, 2021.

The APESB website has a range of resources to assist professional accountants with the APESB suite of pronouncements, including links to helpful external resources.

Visit the Resources page to download recent publications.

Is your organisational culture fit for purpose?

We live in an online world where anything inside an organisation can find itself thrown into the public arena and onto the world stage. One tweet by a long-suffering employee or a fellow employee, no longer wishing to be part of a problem situation, and the organisation becomes the latest victim of our cancel culture.

Is it then timely to “reset” our attitudes and mindsets to employee feedback? Time to move beyond regulatory compliance to a proactive orientation that actively builds the inclusive cultures needed to manage risk in a dynamic digital environment?

Using evidenced-based research, leaders can design for the behaviours they need to support a “speak up culture.”

Where do you start?

In their recent organisational transformation, global giant Novartis began at the top by insisting that all their leaders hone a new set of skills to build “a listening culture.” This strategy recognises how leaders play a critical role in enabling employees to raise concerns, not just in how they design systems and processes to allow employees to speak up safely, but equally important in how leaders respond to issues raised.

Evidence-based research affirms that employees are most likely to raise issues with their direct managers, so skilling middle managers to respond positively is a critical enabler of psychological safety. Managers can model speak up practices by regularly disclosing their workplace challenges and inviting teams to share their personal experiences. It is this mutual sharing of challenges and organisational barriers that keeps the focus on the system changes that must happen rather than being side-tracked onto issues of personal character and disposition.

Organisational barriers

Current field research highlights the critical organisational barriers that prohibit employees from speaking up:

Perceptions of inaction when issues are raised
Perceptions of an over-reaction to the issue raised (eg. zero-tolerance policies leading to instant dismissal)
Fear of personal retaliation
Poor past experiences of raising issues
Lack of personal clarity about compliance accountability

These barriers are “known risks” and the root cause of low trust in organisations. Organisational culture redesign initiatives can remove them.

Design your culture to ensure it is fit for purpose

Unfortunately, too few leaders today draw on evidence-based research and purposely oversee the design of their organisational culture. Unintentionally they create the whistleblowing scenarios that emerge. They also kill innovation. If people don’t feel safe, they cannot innovate and leave to find new places willing to welcome and listen to their input.

Field research suggests that speak-up cultures result from “inclusive” leadership styles that encourage diversity, inclusion, and collaboration. Leaders actively design their organisational context with strategies to build a social infrastructure that supports their people to:

Share their ideas and raise any issues of concern, knowing they are protected
Skill leaders at all levels to solicit, listen and respond to employee feedback
Put data mechanisms to track behaviour patterns
Publicly reward ethical behaviour and publicly demonstrate the consequences of inappropriate behaviour.

Behaviour science makes it possible for all leaders to purposely design and manage the organisational cultures that emerge on their watch.