Eye on Ethics

2003
Holly Dolezalek

Once upon a time, there was a call center. One day, the managers of this call center decided that if reps took a little less time on each call, happier customers and cost savings would abound. So they established an expected average call time, and a window on each rep's computer screen allowed the rep to monitor his or her call time.

After a few rounds of lowering the expected average, though, the managers unwittingly lowered it too much. Reps couldn't resolve calls appropriately within the expected average time, but they couldn't go over the average for fear of being disciplined or eventually fired. So they found a work-around: When they saw that their average had gone too high, they brought it down by deliberately hanging up on the next customer.

"We watched one work group in Nashville, and they intentionally disconnected 1,500 customers in one day," says Frank Navran, principal consultant for the Ethics Resource Center (ERC), a nonprofit educational organization based in Washington, D.C. "Now that's the law of unintended consequences. You've got an ill-conceived measurement system, and it drives undesirable behavior. I won't say all the unethical conduct in the world can be attributed to bad measurements, but an awful lot of it can be directly tied in to management not understanding the consequences of what they're asking for."

The examples of Enron and WorldCom have become synonymous with ethical failure. But the issue of ethics is wider than preventing and censuring illegal behavior while encouraging proper behavior. As a training professional, you have to keep your eye on the accidental and unintentional as well as the underhanded.

The Only Constant Is Change

It's a Catch-22: When ethical violations enrage the nation, the regulations change. Unfortunately, nothing breeds ethical dilemmas like change. Whether it's internal or external, change creates new situations and obstacles, and whether unwittingly or otherwise, employees often find work-arounds that have dangerous or unproductive consequences.

"It's the capability of human beings to always invent a work-around," says Roger Conway, senior faculty member of the Center for Creative Leadership, a Greensboro, N.C.-based school and research institute to advance the understanding, practice and development of leadership. "And most organizations are creating policies to resolve yesterday's problems, so you can never anticipate what's on the horizon."

Barbara Ley Toffler saw firsthand what happened when a firm based on strong principles encountered big changes and failed to update its principles to reflect the new reality. Toffler headed the Responsible Business Practices consulting services group from 1995 to 1999 for ill-fated accounting firm Arthur Andersen. Toffler tells how Arthur Andersen encountered new challenges and conflicts of interest as it began offering consulting services as well as accounting services in Final Accounting (Broadway Books, 2003).

"When consulting activities grew and brought new possible conflicts of interest that could compromise auditor independence, the firm did not--via e-mail, memo, voice-mail, or additions to the Independence and Ethics binder--address the new reality," she writes. A few years later, the venerable 80-year-old firm evaporated in months due to its involvement in the Enron, WorldCom, Global Crossing and other accounting scandals.

In a post-Enron, post-Arthur Andersen world, not feeling cynical about ethics can almost make you feel like a chump. Unfortunately, training professionals charged with developing or executing an ethics training program can't afford to be pessimistic. But there's no need to fake it; when done well, ethics training can contribute to your organization's health and stability. Here are some tips from the experts:

1. Planning is everything

. Toffler says that training professionals can serve their organizations best by thinking ahead when changes in federal regulations or business conditions are going to affect the way their company does business. "The question every training professional should be asking him or herself when this sort of sweeping trend occurs is: What's the implication for my industry? What's the implication for my company? What's the implication for people who work in this company?" Toffler says.

The National Business Ethics Survey, conducted by the ERC and released in May, shows that almost any kind of change can lead to new dilemmas. Senior researcher Joshua Joseph, who designed the survey and conducted the analysis, says that employees in companies that were undergoing some kind of transition--a merger, an acquisition, or a restructuring--reported that they observed misconduct and felt pressure to compromise ethical standards at rates almost twice those of employees in more stable organizations.

2. The more information, the better

. Even in relatively stable times, strategies shift and priorities morph. That's why the best protection against ethical misfires is information. The more you know about how employees are really doing their jobs, and how the actions and decisions of management really affect employees, the better positioned you are to give employees the information they need in order to make ethical decisions.

"Training professionals need to gather information about the difficulties that people are really facing in their jobs, because that's often a symptom of where the ethical problems are going to lie," Toffler says. "That's what effective ethics education is really about--understanding your organization's vulnerabilities and helping to make changes."

However, Toffler says, organizations can't provide truly effective ethics education unless they go beyond what the law requires. Many companies tailor their ethics programs to abide by the requirements of the 1991 guidelines established by the U.S. Sentencing Commission. These guidelines spell out specific actions that companies must take to get credit for being ethical, such as having an ethics officer, a code of conduct, and mechanisms to report unethical behavior, among other things. By having these processes in place, organizations convicted of fraud or tax evasion or other violations can have their sentences reduced significantly.

But Toffler argues that, rather than intensifying ethical commitment, the guidelines have given companies a free pass. Instead of committing resources to gathering information and teaching employees to make good decisions in complex situations, she says, many companies have elected to meet only the requirements of the guidelines. "Our government and our sentencing commission have given every company an easy out, so they don't really have to worry about ethics anymore," Toffler says. She believes that the best ethics training goes beyond the requirements of the guidelines and equips employees to make ethical decisions even in unanticipated situations.

3. Cover compliance and provide a compass

. Ron James suggests using two methods for driving behavior. As CEO of the Center for Ethical Business Cultures, a Minneapolis-based nonprofit organization, James helps leaders create ethical and profitable business cultures. By articulating expected values or norms, such as "customers always come first," James says that companies address the aspirational side of ethics. By explaining the negative consequences of failing to comply with the law or with expressed company standards, they cover the compliance aspect. Including both is essential to maximize an ethics training program's effectiveness.

This doesn't preclude emphasizing the importance of less noble-sounding values, like profits. But James notes that it's important to be mindful of the message employees are hearing. "Sometimes values compete," says James. "Unintended consequences can come when you amplify one value--generally it's profit--in the short term, without raising awareness to the employees that you expect them to honor the other values that you have," he says.

James also believes that organizations need to be careful to address both the aspirational and the compliance aspects of ethics. "One of the weaknesses I see is that people tend to disconnect those two ways of driving behavior," James says. "Compliance typically tends to look at what the law calls for. If you focus on compliance, you may miss a huge opportunity to really equip an employee with that compass that can guide them, not just in terms of complying with the law, but facing new dilemmas that the law may not call for. Likewise, you can err on the other side; you can say, I'm going to give them the compass, but I'm not going to focus on the law. The most effective programs are those training programs where people blend both of those together. That is, they create a vehicle whereby they can train people on the values of the organization, getting that ethical compass instilled in them, and they can also train them and link that with what the law actually requires."

4. Get leadership on board

. CCL's Conway believes that no ethics training program is complete unless the leadership is present and participating. This way, he says, employees will see that the commitment is there. It will also help leaders to model the behavior they would like to see. "People pay more attention to the behavior they see than the behavior they're instructed to perform," he says. "I think it's really incumbent upon organizations if they want ethical behavior, if they want to really grow the next generation, for everybody in a key leadership capacity to play some developmental role with more junior people in the organization."

The bottom line is that by conducting ethics training, you help to send a message that ethics is important and that the business is committed to supporting ethical behavior, says ERC's Navran. "It's much easier to make the ethical choice if the organization has made it clear that they want you to make the ethical choice, they will defend you, they will support you, and they will not punish you if you make the ethical choice."