INTRODUCTION
In my professional experience I have worked for companies where integrity and ethical values were downgraded to mere compliance with contracts and laws. Many companies have serious issues related to cultural issues and lack of honesty, failing to recognize that it is critical to a corporate culture to effectively communicate and reinforce ethical and behavioral standards. It is a reminder that an organization that strives to a successful corporate strategy must embrace integrity and ethical values. The issue that I have often encountered is whether the management is ready to take the necessary steps to mold the culture to what is needed to lead the company to a successful corporate strategy. The answer often lies in a series of considerations that involve multiple stakeholders.
IN DEPTH
Let’s be honest. Changing culture in an organization is not an easy path. Shifting how an organization function fails when leaders rely on slogans or posters instead of rewriting daily habits, metrics, and systems. True transformation demands changing the underlying infrastructure rather than just announcing a new vision statement. And this is exactly where I have seen many managers failing their roles. As noted by former Starbucks CEO Howard Schultz, “Turning a culture around is very difficult to do because it is based on a series of many, many decisions, and the organization is framed by those decisions. Everything matters – everything. You are imprinting decisions, values, and memories onto an organization. In a sense, you are building a house, and you can’t add stories onto a house until you have built the kind of foundation that will support them.”[1]
I have witnessed many cases where managers have failed to transmit relevant information to their own team. This has led to an escalation of miscommunication and erroneous information transmitted to other departments that have tilted trust. Lousy communication lends itself to misunderstandings and can bring the company to its knees if not adjusted. A general reminder is that a recipe for disaster is to have managers who withhold information from their own team or do not ensure their team receive information on existing new laws and regulations relevant to their operational responsibilities.
Organizations that want to protect their reputation must ensure that integrity is maintained throughout the creation of a corporate culture that favors ethical values, customer sensitivities, and compliance with laws and regulations. The risk of keeping underperforming, low-paid managers can cost a company far more through lost productivity, high staff turnover, and poor team morale than paying higher compensation for skilled, effective leadership. The bottom line is that change is never easy. However, for many companies, continuing along the same course of action may be deadly. We do not know in advance the true range of outcomes a company that does not invest in a reliable management system may face, nonetheless, we can make decisions to reduce those consequences to an acceptable level.
CONCLUSIONS
There is always a possibility that something will happen, it is part of the risk of running a business. However, “when one ignores the black swans as being unrealistic”[2] we court disaster. Dismissing extreme risks as impossible prevents proactive planning and turns manageable disruptions into major disasters. CEOs, CFOs, and COOs play an extremely important role in determining what changes are needed, ensuring the acceptance of what is relevant. Top management in fact has generally an accurate picture of an organization’s culture and the ability to enforce a compliance program based on integrity and ethical standards. As I mentioned earlier, my experience taught me that a successful corporate strategy in an organization is shaped by integrity and ethical values, principles that must be shared with the company’s employees.
[1] Richard M. Steinberg, Governance, Risk Management, and Compliance
[2] Richard M. Steinberg, Governance, Risk Management, and Compliance, What is Risk Management About?
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