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Building and Sustaining Strong Ethical Cultures. American Society for Quality April 9, 2014 Jim Nortz [email protected] 585-260-8960. Built on Ethics Advisory Services. Helping organizations thrive by building sound internal controls and strong ethical cultures. Today’s Agenda.

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Building and sustaining strong ethical cultures

Building and Sustaining Strong Ethical Cultures

American Society for Quality

April 9, 2014

Jim Nortz

[email protected]

585-260-8960


Built on Ethics

Advisory Services

  • Helping organizations thrive by building sound internal controls and strong ethical cultures.


Today s agenda
Today’s Agenda

  • What is a strong ethical culture?

  • Why should I want a strong ethical culture?

  • How can I build and sustain a strong ethical culture?



2 it is very important to me that the organization i work for is ethical
2. It is very important to me that the organization I work for is ethical.

  • Agree

  • Disagree


3 there have been times in my career when i felt pressure to compromise my ethical standards
3. There have been times in my career when I felt pressure to compromise my ethical standards.

  • True

  • False


4. There have been times at work when I saw things going wrong and even though I spoke up, I was unable to get the organization to change course.

  • True

  • False


5 our organization has an accurate gauge to measure the strength of our ethical culture
5. Our organization has an accurate gauge to measure the strength of our ethical culture.

  • True

  • False


What is a strong ethical culture? strength of our ethical culture.


Strong ethical culture
Strong Ethical Culture strength of our ethical culture.

A strong ethical culture is one in which the dominant social dynamics consistently encourage/reward ethical behavior.


Strong ethical culture1
Strong Ethical Culture strength of our ethical culture.

A strong ethical culture is one in which the dominant social dynamics consistently encourage/reward ethical behavior.

A culture in which it’s “cool” to be good – where the odd person out is the one who breaks the rules.


Why should I want a strong ethical culture? strength of our ethical culture.


2006 lrn national survey
2006 LRN National Survey strength of our ethical culture.

“A majority of workers – 94 percent – say it is “critical” or “important” that the company they work for is ethical.”


Reduced misconduct rates
Reduced Misconduct Rates strength of our ethical culture.

2013 National Business Ethics Survey


A strong ethical culture it good for business
A Strong Ethical Culture it Good for Business strength of our ethical culture.


Benefits of a strong ethical culture
Benefits of a Strong Ethical Culture strength of our ethical culture.

Organizations with strong ethical cultures:

  • Minimize risks.

  • Maximize teamwork.

  • Recruit, retain and motivate the best in the industry.

  • Earn and sustain the trust of key stakeholders (customers, shareholders, suppliers and communities)

  • Maximize opportunities for superior financial performance.


2013 national business ethics survey
2013 National Business Ethics Survey strength of our ethical culture.


The big question
The Big Question strength of our ethical culture.

How can I build and sustain a strong ethical culture?


Organizational behavior distribution curve

Unacceptable Behavior Zone strength of our ethical culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Organizational

Behavioral

Boundary

Legal

Behavioral

Boundary

Industry Behavioral Boundary

Catastrophic

Behavioral

Boundary

Ideal Behavior

Organizational Behavior Distribution Curve

Number of People


Organizational behavior distribution curve1

Unacceptable Behavior Zone strength of our ethical culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Organizational

Behavioral

Boundary

Industry Behavioral Boundary

Legal

Behavioral

Boundary

Catastrophic

Behavioral

Boundary

Ideal Behavior

Organizational Behavior Distribution Curve

Pressure to Cheat

Number of People


Pressure to cheat
Pressure to Cheat strength of our ethical culture.

External to Organization

  • Shareholders

  • Government Officials

  • Customers

    Inside the Organization

  • Leaders

  • Peers

  • Job Demands

    Inside Self

  • Desire to win

  • Desire to get job done

  • Desire to save time

  • Desire to look good


Organizational behavior distribution curve2

Unacceptable Behavior Zone strength of our ethical culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Organizational

Behavioral

Boundary

Industry Behavioral Boundary

Legal

Behavioral

Boundary

Catastrophic

Behavioral

Boundary

Ideal Behavior

Organizational Behavior Distribution Curve

Pressure to Cheat

Number of People


Organizational behavior distribution curve3

Unacceptable Behavior Zone strength of our ethical culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Catastrophic

Behavioral

Boundary

Organizational

Behavioral

Boundary

Legal

Behavioral

Boundary

Industry Behavioral Boundary

Ideal Behavior

Organizational Behavior Distribution Curve

Purpose

Structures

Systems

Pressure to Cheat

Number of People


A Live Demonstration strength of our ethical culture.


Organizational behavior distribution curve4

Unacceptable Behavior Zone strength of our ethical culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Organizational

Behavioral

Boundary

Legal

Behavioral

Boundary

Industry Behavioral Boundary

Catastrophic

Behavioral

Boundary

Ideal Behavior

Organizational Behavior Distribution Curve

Purpose

Structures

Systems

Pressure to Cheat

Number of People


Organizational behavior distribution curve5

Unacceptable Behavior Zone strength of our ethical culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Organizational

Behavioral

Boundary

Legal

Behavioral

Boundary

Industry Behavioral Boundary

Catastrophic

Behavioral

Boundary

Ideal Behavior

Organizational Behavior Distribution Curve

Purpose

Structures

Systems

Pressure to Cheat

Number of People

Individual Attributes

(Knowledge, Attitudes, Choices & Habits)


Organizational behavior distribution curve6

Unacceptable Behavior Zone strength of our ethical culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Organizational

Behavioral

Boundary

Legal

Behavioral

Boundary

Industry Behavioral Boundary

Catastrophic

Behavioral

Boundary

Ideal Behavior

Organizational Behavior Distribution Curve

Purpose

Structures

Systems

Pressure to Cheat

Number of People

Individual Attributes

(Knowledge, Attitudes, Choices & Habits)

Social Dynamics

(Obedience to Authority

Conformity to Social Norms)


Obedience to authority
Obedience to Authority strength of our ethical culture.


Conformity to social norms
Conformity to Social Norms strength of our ethical culture.


Organizational behavior distribution curve7

Unacceptable Behavior Zone strength of our ethical culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Organizational

Behavioral

Boundary

Legal

Behavioral

Boundary

Industry Behavioral Boundary

Catastrophic

Behavioral

Boundary

Ideal Behavior

Organizational Behavior Distribution Curve

Purpose

Structures

Systems

Pressure to Cheat

Number of People

Individual Attributes

(Knowledge, Attitudes, Choices & Habits)

Social Dynamics

(Obedience to Authority

Conformity to Social Norms)


Organizational behavior distribution curve8

Unacceptable Behavior Zone strength of our ethical culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Organizational

Behavioral

Boundary

Legal

Behavioral

Boundary

Industry Behavioral Boundary

Catastrophic

Behavioral

Boundary

Ideal Behavior

Organizational Behavior Distribution Curve

Purpose

Structures

Systems

Pressure to Cheat

Number of People

Leadership

Individual Attributes

(Knowledge, Attitudes, Choices & Habits)

Social Dynamics

(Obedience to Authority

Conformity to Social Norms)


A Failure of Leadership strength of our ethical culture.


A Tale of Two Leaders strength of our ethical culture.


I wish my leaders were here to listen to this talk because they need to change for our organization to improve its culture.

  • Agree

  • Disagree


Avoid the they need to change for our organization to improve its culture.

Blame and Change GameTrap


A path to ethical leadership
A Path to Ethical Leadership they need to change for our organization to improve its culture.

Focuson yourself - Take personal responsibility for modeling and promoting ethical behavior.

Reflecton a significant failure of leadership and re-write the story.

Lookfor and emulate role models.


Two leadership challenges
Two Leadership Challenges they need to change for our organization to improve its culture.

  • Good intentions alone are insufficient to secure the “good” in organizations.

  • The primary behavioral drivers are invisible.


Two leadership challenges1
Two Leadership Challenges they need to change for our organization to improve its culture.

  • Good intentions alone are insufficient to secure the “good” in organizations.

  • The primary behavioral drivers leaders seek to influence are invisible.


Important leadership tools

Unacceptable Behavior Zone they need to change for our organization to improve its culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Organizational

Behavioral

Boundary

Catastrophic

Behavioral

Boundary

Industry Behavioral Boundary

Legal

Behavioral

Boundary

Ideal Behavior

Important Leadership Tools

Purpose

Structures

Systems

Pressure to Cheat

Number of People

Leadership

Individual Attributes

(Knowledge, Attitudes, Choices & Habits)

Social Dynamics

(Obedience to Authority

Conformity to Social Norms)


Leadership tools
Leadership Tools they need to change for our organization to improve its culture.

  • Purpose – Define the “why,” “what” and “how” of your organization in ethical terms and integrate it into all aspects of your operations.

  • Structure – Ensure spans of control and accountability are designed to promote ethical behavior.

  • Systems – Evaluate your key systems to ensure their reliability.


Two leadership challenges2
Two Leadership Challenges they need to change for our organization to improve its culture.

  • Good intentions alone are insufficient to secure the “good” in large/complex organizations.

  • The primary behavioral drivers leaders seek to influence are invisible.


The key behavioral drivers are invisible

Unacceptable Behavior Zone they need to change for our organization to improve its culture.

Acceptable Behavior Zone

Catastrophic

Behavior Zone

Organizational

Behavioral

Boundary

Industry Behavioral Boundary

Legal

Behavioral

Boundary

Ideal Behavior

Catastrophic

Behavioral

Boundary

The Key Behavioral Drivers Are Invisible

Purpose

Structures

Systems

Pressure to Cheat

Number of People

Leadership

Individual Attributes

(Knowledge, Attitudes, Choices & Habits)

Social Dynamics

(Obedience to Authority

Conformity to Social Norms)


The primary behavioral drivers are between our ears
The Primary Behavioral Drivers are Between Our Ears they need to change for our organization to improve its culture.

Perceived pressure to cheat

Perceived leadership

Knowledge

Attitudes

Choices

Habits

Perceived pressure to do wrong.

Perceived encouragement to do right


Measuring the invisible
Measuring the Invisible they need to change for our organization to improve its culture.


Revealing the invisible
Revealing the Invisible they need to change for our organization to improve its culture.

Anonymous Polling


Essential information
Essential Information they need to change for our organization to improve its culture.

  • Do employees know the rules associated with their jobs?

  • What are employees’ attitudes toward the rules?

  • Are employees pressured to violate the rules or encouraged to follow them?

  • How frequently do employees see misconduct in the workplace?

  • What kind of misconduct are they seeing?

  • When they see misconduct, do they report it? If so, to whom? If not, why not?


Key takeaways
Key Takeaways they need to change for our organization to improve its culture.

  • Focuson yourself - Take personal responsibility for modeling and promoting ethical behavior.

  • Reflecton a significant failure of leadership and re-write the story.

  • Lookfor and emulate role models.

  • Optimize your chances of building and sustaining a strong ethical culture by:

    • Periodically evaluating and improving your organization’s purpose, structures and systems; and

    • Measuring the direction and magnitude of the invisible key behavioral drivers using anonymous polling.


Thank you

Thank You they need to change for our organization to improve its culture.


Building and sustaining strong ethical cultures1

Building and Sustaining Strong Ethical Cultures they need to change for our organization to improve its culture.

American Society for Quality

April 9, 2014

Jim Nortz

[email protected]

585-260-8960


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