A new way to build inclusive workplace cultures

When toxic workplace behaviour is exposed, such as currently in our Parliamentary workplace, it should be seen as a symptom of poor culture design rather than rogue individuals. Many workplaces are built on false assumptions, namely innate employee competitiveness and selfish motivations, which enable or promote toxic behaviour. Addressing poor workplace behaviour is a culture redesign challenge for leaders, rather than leaving it to the HR department.

Behaviour science shows that rather than being innately competitive, we are predisposed to prosocial behaviour and organisations can benefit from it. Elinor Ostrom received a Nobel prize in 2009 for demonstrating that people are predisposed to cooperation; they create rules and organisations based on it. ‘Prosocial’ behaviour is characterised by a concern for others’ rights, feelings and welfare. It is behaving in a manner which promotes the well-being of others. We all have social needs that we seek to have met in our workplaces. We value the same things – being respected, included, appreciated and feeling safe in our environment.

Examples of this predisposition are all around us. In Australia, we can see the prosocial behaviour of our beach lifeguards, our volunteer firefighters in the summer or our blood donation drives in the office. These prosocial behaviours and underlying selfless motivations are apparent in all the world’s varied cultures and peoples

We can also see evidence of this in the Parliamentary workplace scandal; the selfless and often self-harming actions of whistleblowers who speak out. These prosocial actions typically come with anticipated and significant personal costs to the whistleblowers.

So why do we see prosocial behaviour in some workplaces and not others?

 

Social scientists suggest that our workplace context can determine whether we engage in prosocial actions. Many not-for-profit organisations, such as Mozilla Firefox or Wikipedia, owe  their success to individuals’ prosocial orientations, their desire to join organisations enabling them to express themselves. When asked, many public servants point to a prosocial motivation (e.g. ‘Creating a better society’) as their reason for joining the sector. On the flip side, HR professionals understand it is because of unmet social needs that many employees leave their position regardless of the job salary and perks.

By failing to respond to these innate social needs, a vicious circle emerges where employees feel cheated and are more likely to cheat the organisation in turn. Gallup research estimates that only ⅓ Australian employees are engaged at work due to not having their needs met beyond monetary compensation. This lack of engagement leads to conduct risk.

Innovative organisations, particularly newer ones, are already designing their corporate culture on cooperative principles. Organisations such as Zappos and Atlassian design culture to address employees’ social needs and deliberately promote inclusive workplaces. Global brands such as Novartis are now encouraging their leaders to hone their social skills to promote a unifying organisational purpose to employees. This shared purpose helps to harness social or ethical priorities and promotes a more cooperative orientation towards achieving the organisation’s goals. Managers must engage in honest communication with employees to address the ongoing ethical and social challenges of attaining these goals. Honesty from leaders promotes psychological safety, which helps build an inclusive workplace culture.

One of our most pressing human needs is to feel good about ourselves, and as social animals, we use workplace groups to support and cultivate positive self-concepts. Because people mostly conform to what significant others around them are doing, managers modelling prosocial behaviours enable respectful workplace cultures to emerge while appeals to group identity maintain shared standards.

How do I get started?

 

A more human-centric approach to culture design means inviting employees’ input and ideas on how best to design organisational systems that work for them and their views on how they can better support each other to foster a more inclusive culture. The healthiest cultures are co-designed.

In a low-trust interconnected world, demands for more workplace diversity, equity and inclusion will only accelerate. Recognising our prosocial natures and leveraging these to promote psychological safety is a strategy guaranteed to provide benefits for both the organisation and it’s members.

Let’s hope Parliamentarians are listening.

Please fill out the form below to get in touch regarding your organisation's needs and we will get back to you as soon as possible. You can also call us on 0430 889 850 or email us directly at admin@values.com.au.

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    Do Poor Management Practices Shape Collective Unethical Behaviour?

    How do so many employees manage to find themselves caught up in unethical business practices? Often these are not of their own choosing and don’t even benefit them personally. Consider the employees caught up in the scandal which engulfed General Motors (GM) at the beginning of 2014. This scandal was over its 10-year failure to rectify a faulty car component. This event occurred despite inside knowledge of its link to accidents and deaths. Why? The study of behaviour ethics has produced some interesting insights on the subject.

    Company Dynamics that Can Cause Unethical Behaviour

     

    The study of behaviour ethics focuses on how company dynamics can give rise to such collective unethical behaviour. Behaviour ethicists draw on field research to comment on why this happens. Unethical decisions at work have less to do with the character of employees. They are much more influenced by the context employees are in when making decisions. They suggest that contexts can be stronger than reason, values, and good intentions. Ethicists point to some key organisational dynamics that rarely get acknowledged:

    Frames

    Employees experience contexts that shape the way or ‘the frame’ by which they see things. Individuals can narrow the information they use or screen out unwanted information. The role of frames was exposed by the inquiry into the Challenger space shuttle disaster. Concerned engineers had wanted to abort the launch but were invited to change their frame of reference.

    “Mr Mason said we have to make a management decision. He turned to Bob Lund and asked him to take off his engineering hat and put on his management hat.”

    The new frame of reference, the management frame, allowed the launch to proceed and seven astronauts lost their lives.

    The way you construe a decision then can have a profound result on the decision made. Frames such as ‘if it’s legal, it’s okay’ or ‘I have nothing to personally gain from this’ are common. They can also lead to unethical choices and behaviour as they screen out ethical considerations.

    Ethical Blind Spots

    Contexts can be so strong that people might engage in unethical behaviour despite good intentions. An example might be where people frame their actions in terms of ‘it’s a business decision only’. They avoid canvassing any downside, such as the negative impacts their decisions will have on others. Shonky financial advisers might have justified their decisions thus.

    Ethical blindness might cause us to engage in unethical behaviour without realising that it is wrong. There was an inquiry into GM over the non-disclosure of its faulty ignition switch. The findings showed that the GM culture meant that people avoided giving management bad news. It had been that way for decades. Almost no one was ever held accountable for a decision, partly because committees made most decisions.

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    Perhaps the biggest contextual pressure on employees comes from time pressures. Time restrictions encourage employees to be reactive rather than review decisions on the merits of each case. Time and peer pressures to ‘go along to get along’ are the systemic source of much unethical behaviour in modern workplaces. Succumbing to these contextual pressures sees employees bypass their personal values and formal codes. Instead, they do what’s necessary to get the results required.

    How can you avoid unethical cultures emerging? A regular ethical review of your business will reveal any contextual pressures. This strategy can protect employees and companies from becoming blindsided to inappropriate behaviour. Business ethics training needs to be context-bound. It must speak to the authentic issues and challenges facing each organisation and its industry.

    If companies wish to promote their code of conduct’s ethical principles, they must ensure their employees are skilled to withstand contextual pressures. Otherwise, these strains can leave them vulnerable to participation in collective unethical business behaviour.

    Please fill out the form below to get in touch regarding your organisation's needs and we will get back to you as soon as possible. You can also call us on 0430 889 850 or email us directly at admin@values.com.au.

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      The Benefits of Ethical Leadership

      Traditional business leadership models only pay lip service to managing the social context of the business. In doing so, today’s business leaders may be missing a golden opportunity to ‘future fit’ their companies. There is a chance to leverage technologies to create workplaces that meet the social needs of employees. This focus on wellbeing encourages staff to thrive in the workplace.

      New Ways of Thinking Will Propel Business Into the Future

       

      Many recognise that today’s mainstream business models are out of sync with technology innovations. These disruptors have dissolved corporate walls and knitted suppliers and consumers into a sharing economy. Just think of platforms such as Uber, Airbnb, or Crowdfunding.

      Old ways of thinking and doing are sabotaging the business success of many companies. There is a new ethical leadership model required that will be vastly different from those gone before. A huge change is needed to access and leverage employee discretionary effort. Specifically, the new model must put employees first, and output is a by-product of their engagement levels.

      Despite annual employee engagement surveys, leaders hold back from actively designing their culture. Too often, companies don’t put their values into practice, and cultures remain flawed through lack of consistency.

      The New Ethical Leadership Model

       

      The new ethical leadership model involves three specific activities:

      • Identify the social purpose of the business beyond shareholder needs. This way, employees can feel good about the enterprises they work for. They can also find their place in the larger picture of how business can be a force for social good.
      • Purposely design a culture where you eliminate known risks. Forearm and forward employees of the ethical challenges they will inevitably face.
      • Hold leaders accountable to ensure their employees are fully engaged. To date, this has been a critical leadership skill that has gone unmeasured. Gallup revealed in 2013 that this failure has meant that only 13% of the global workforce is engaged at work. That’s because the cultures they work in do not meet their social needs. Since it is now known what motivates employees, ethical leaders need to leverage this. They must design a culture that enables employees to contribute their skills and collaborate.

      Thankfully, ethical leadership is very different from leadership as usual. Leaders may fail to step up to the new ethical leadership model. If that happens, you can expect new employees to continue to vote with their feet and leave their employers promptly in search of more fulfilling work.

      Please fill out the form below to get in touch regarding your organisation's needs and we will get back to you as soon as possible. You can also call us on 0430 889 850 or email us directly at admin@values.com.au.

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        Behaviour Ethics: Turning Integrity Inside Out

        Integrity has become the new conversation piece amongst leaders. It is a more acceptable construct than the traditional reference to business ethics. Many people hold the often unstated assumption that ethics in business is an oxymoron.

        Integrity Requires a Shift

         

        With this swing to an integrity focus, companies have the chance to redefine where they should start. If they are serious about building integrity into their business, a paradigm shift is required.

        Businesses must move away from the moral philosophers’ fixation with personal character. They must begin to research the science of behavioural economics. This information will allow them to see that all people are emotional beings, even at work. People can respond in irrational ways to the contexts in which they find themselves.

        It starts with consciously designing the context and culture. Companies must begin to recognise that people may behave in ways they don’t mean to. They need to forewarn and forearm their employees to protect against the pressures that will occur. They must hold managers to account for how they create unconscious ‘frames’ for employees. An example of this is Wells Fargo’s impossible target of “8 financial products per household”. In this scenario, jobs appeared to rely on sales targets. Businesses must redefine traditional operating systems to avoid repeating the mistakes of the past.

        What Behaviour Ethics Tells Us

         

        The science of behaviour ethics shows that people can be very poor decision-makers. People screen out elements of information all the time. That leaves them prone to decision-making biases of which they are unaware. Slippery slopes lead to ‘bounded ethicality’, not just in their own behaviour, but noticing that of others.

        Motivated blindness also contributes to our inattention to the unethical behaviour of others. The science of behaviour ethics shows us that emotions drive our actions. Humans are not as rational as they consider themselves. Therefore, giving people more information will not always change behaviour. Memories of behaviour are not reliable, and others can unconsciously change our behaviour. Context is everything in trying to make sense of the way people act.

        Integrity in Context

         

        Each business’s context shapes definitions of integrity. However, the underlying principle remains the same. Integrity in business means the ability to consistently act in line with company values. Many companies today are entirely new to embracing the full scope of the integrity challenge. Integrity begins on the inside of the business. Enterprises can only build it on the day-to-day commitment to treating employees with respect and fairness.

        People are not resources or numbers that you can manipulate according to share price fluctuations. Neither are they human capital to be invested or divested at the whim of the company. Behavioural scientists have known for years that high trust businesses are higher performing. Yet, there are still too few companies that leverage the full capacity of their people. The same commitment to human respect is then extending outside towards customers, suppliers and stakeholders.

        Neither does a commitment to integrity start in the communications department. It is set at the leadership table. Leaders come to recognise that the company’s social context shapes all behaviour. They realise it is their job to manage the internal culture. That way, they can better respond to the changing external context. Leaders build company integrity by holding the line, especially when the going gets tough.

        Ethical leadership means that leaders set boundaries around values-based leadership, quality services, and corporate responsibility. These boundaries are adhered to so that their employees can feel safe knowing their leaders walk the talk. It is the sum of behaviours that enables a company to achieve its strategy and objectives, or not.

        Culture, not corporate policies, drives behaviour. Leaders can only build and maintain a culture if they are committed to measuring and managing their cultures. Measuring culture enables leaders to fine-tune policies and procedures. That way, they can shape and design the cultures they want.

        If you would like to explore further the research into behaviour ethics, take a look at EthicalSystems.org.

        Please fill out the form below to get in touch regarding your organisation's needs and we will get back to you as soon as possible. You can also call us on 0430 889 850 or email us directly at admin@values.com.au.

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          RISKY BUSINESS – Or Business Ethics by Another Name?

          Words are often co-opted into our language. In other words, they become trendy, and people start to use them in place of words that have become diluted. Take ‘ethics’, for example. Often considered a grey area, it is still a vital idea in business. However, the definition of ethics is continually changing.

          Changing Focus

           

          Recently, there has been a trend towards using integrity and risk as more effective descriptors of managing an ethical culture. Risk is evolving as a more hard-edged term. This shift is possibly because boards are being held more accountable for the cultures that expose their companies to risk. Those risks can be both financial and non-financial. Regulators, such as APRA, warn businesses about risk culture. They are also beginning to signal that leaders and cultures can shape behaviour in the workplace. These factors may be even more influential than the people in that business.

          Disregarding someone as a ‘bad apple’ is no longer an excuse for bad behaviour. Instead, there is more of a focus on ‘the barrel’. That is, how leaders are shaping culture, which in turn is shaping employee behaviour. Risk management is a category that will appear in many annual reports. By contrast, risk culture is only just starting to appear in those of progressive companies. More than just industries with negative reputations are taking it on now, with an uptake in the financial services industry as well. This is particularly pertinent in Australia where reputational damage is frequently occurring in our banking and insurance industries.

          The Importance of Culture

           

          According to a Gallup poll, today’s leaders have created the most disengaged, siloed, and disconnected workforce in history. How? By failing to manage company culture. So, it’s excellent that regulators are finally asking leaders to be accountable for purposely designing their company cultures. They are requesting that leaders manage known risks beyond the bottom line. As social scientists have argued for a long time, policies only signal intent but culture shapes decisions. Culture is what dictates behaviour on a daily basis. Risky behaviour emerges not because of who people are but despite who they are.

          This search for integrity and conduct risk dashboards is likely to become even more intense. The new science of behavioural economics is shedding more light on how cultures corrupt individuals. Whether leaders like it or not, both character and competency define leadership. The number one demand of leaders today is to protect the enterprise and stakeholders. They can achieve this by building engaging workplace cultures that enable employees to have a sense of purpose and be encouraged to contribute their talents.

          What Research Says

           

          There is an upside too. Field research from the new sciences such as that of EthicalSystems.org can tell us a lot. It shows how leaders can design the cultures they want. There is field research to prove that leaders can improve workplace performance by creating cultures of choice. These businesses outperform those that are not intentional about culture on a whole range of indicators. These include risk, employee satisfaction, and even measurable bottom-line benefits. The contribution of culture to performance is substantial and quantifiable.

          James Heskett’s research demonstrates how an effective culture can account for 20-30% of the differential in performance. That is when compared with ‘culturally unremarkable’ competitors.

          The elusive search for trust can be built on cultural initiatives. Deloitte found that 81% of respondents working for companies with a strong sense of purpose said that stakeholders trusted their leadership team.

          And lastly, companies can enhance public reputation. Deloitte and Glassdoor recently completed a combined study. The findings were that employees rate culture and values over salary or benefits. Culture and values are 4.9 times more predictive of a positive recommendation than salary or benefits. Millennials look behind the brand, behind the advertising and even behind the CEO to explore what it’s truly like to work there. For them, culture is more important than size or brand recognition. Increasing numbers of employees are looking for job satisfaction and recognition rather than rewards. As the majority of employees are either casualised or ‘gig workers’, choice is more prevalent than career.

          Risk has to be re-classified as doing business ethically to protect the organisation. Build a healthy culture to risk-proof the enterprise. Risk and integrity are more essentially about focusing on how you do business rather than what business you do.

          Please fill out the form below to get in touch regarding your organisation's needs and we will get back to you as soon as possible. You can also call us on 0430 889 850 or email us directly at admin@values.com.au.

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            Workplace Ethics: Whistleblowing – Too Little Too Late?

            There is a major challenge facing companies today. It is how to get people to raise issues of concern because they recognise it’s good for them. The simple answer is – make it safe for them to do so. The harder thing to do is to create and embed speaking up as the hallmark of a trust culture. In such a culture, raising issues is seen to benefit the whole enterprise, and so is the natural thing to do.

            The Issues With Whistleblowing

             

            Instead, people must resort to whistleblowing. Yet, companies continue to poorly design and embed whistleblowing systems in the culture. This issue makes them the last resort for desperate employees witnessing systemic corruption. Regulators insist whistleblowing is necessary because of poor cultural management practices. They consider it an essential part of good risk management practice today.

            Lack of Communication

            Where there is no culture of openness, managers fail to tune into and respond to ongoing employee feedback. EY’s 2017 Asia-Pacific Fraud Survey had some interesting findings on the subject. 49% of respondents think that senior management would ignore unethical behaviour to achieve targets. 51% of senior management respondents feel under pressure to withhold information about misconduct. There is an absence of effective two-way communication between those at the top and bottom. This flaw creates an ongoing need for whistleblowing systems. Employees find themselves resorting to whistleblowing out of desperation. Instead, it should be out of genuine concern to safeguard business standards for all.

            No Intention to Manage Culture

            Oddly, the reasons why whistleblowing systems fail are the same reasons they need to exist. They fail because of the absence of leaders’ intent to manage culture. This attitude allows barriers to a speak-up culture prevail. Barriers include flawed power dynamics, information silos, low employee engagement, and unknown risks. Unethical behaviour emerges and flourishes little by little. That is part of why whistleblowing systems fail – leaders don’t seem to understand this. Behaviour becomes normalised.

            At the core, businesses are political entities with uneven power and information biases. They encourage politics and self-serving dispositions. They can be full of people with low emotional intelligence, jostling egos, and a tendency to bully. Sometimes, they contain people with some of the most creative reasons for self-interested actions.

            Many companies do not have an intentional workplace culture. In this type of culture, behaviour standards are upheld, and employees are encouraged to speak up. Without that, companies can veer towards a low trust, power-based culture. In this culture, employees protect themselves and don’t speak out about unethical behaviour.

            Lack of Information

            Whistleblowing systems also fail because employees lack information about how they work. They may not understand why the business designed it in the first place. That reasoning is often to ensure middle managers play their roles in building a culture of integrity. In other words, to align with the code of conduct – not for employees’ best interests.

            EY’s 2017 Asia-Pacific Fraud Survey had some insights on this as well. 1 in 4 respondents say their colleagues are aware but do not report fraudulent activities for one reason. That reason is that they are not confident the company will protect them if they report it. Perhaps most alarming for corporate leaders is the next finding. 1 in 5 respondents would rather take a whistleblower report directly to law enforcement.

            Separation of Mechanisms

            Typically, compliance departments manage the whistleblowing hotline. The focus is often on compliance as opposed to engagement and defence. This separation of speak up mechanisms makes it ‘somebody else’s problem’. HR functions can safely lock that away and tick that box. It only comes up again when they must manage someone out of the organisation. Sadly, all too often, it’s the whistleblower themselves.

            Systems are not Reviewed

            A dominant ‘too busy’ mindset prevents ongoing reflection on systems. These systems may have become outdated, broken, or dysfunctional. Much less do people look into innovation in this area. So, staff members are deprived of opportunities to co-design the helpline system. The same system where they can offer early warnings of people, processes, or systems under stress.

            How Behaviour Ethics Can Help

             

            On the positive side, behaviour ethics provides leaders with the tools to forewarn and forearm their employees. That way, they can be alert to the gradual nature of unethical patterns of behaviour. They will know how to spot early warning signals that they may be on the slippery slope. Drawing on the field research encourages a different approach to ethics training. This approach does not depend on the existence of moral compasses. Instead, it seeks to build the required set of social skills employees need to navigate the politics of modern workplaces.

            Information and data are increasingly beyond the control of most businesses. In an age of hyper-connectivity, isn’t it time to get your own house in order? Companies need to build a speak-up culture from the ground floor up. It begins with skilling employees to face the challenges they will inevitably face. Build the right attitudes at every level to enable issues and concerns to be heard. It requires leaders to motivate, reward, and measure things that matter. It requires a purposely designed culture that makes it easy for its members to do the right thing. Business pressures necessitate that this becomes a conscious choice.

            Depending on whistleblowing is too little, too late. Companies must value their people, reputations, and the wellbeing of the societies in which they operate. To do this, they need to be measuring the strength of feedback systems on culture. Then they need to act on it so that a speak-up culture can offset the need for anonymous reports of bad behaviour. Build a speak-up culture, a high trust culture, a culture that rewards people for highlighting threats. Only then, you may begin to build a culture of working towards excellence together. Rid yourself of a culture of winners and losers where retaliation, isolation, and distrust prevail.

            Please fill out the form below to get in touch regarding your organisation's needs and we will get back to you as soon as possible. You can also call us on 0430 889 850 or email us directly at admin@values.com.au.

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