Are Your Leaders Equipped for Changing Business Climate?

Are Your Leaders Equipped for Changing Business Climate?

What made leaders successful in the past will not do in a vastly changing society: large generational differences between workers; vast technological advancements; high ethical expectations; unparalleled transparency; shift in economic gravity towards east and south; as well as strong regulation and enforcement. These new realities represent a conundrum for leaders: how to ensure ambitious yet responsible decision-making?

Discover the Compliance Safeguard

Discover the Compliance Safeguard

We explore the scenarios where companies have to face sanctions or court cases regarding compliance issues and how we can take measures to safeguard against them.

Disrupting Compliance with Technology

Disrupting Compliance with Technology

Small and medium-sized companies can leapfrog traditional compliance with mod­ern tech­nol­o­gy solu­tions to impact con­duct and com­ply with legal require­ments, while sav­ing sig­nif­i­cant mon­ey, time and pain.

Leaders to cover their backs with mobile policies

Leaders to cover their backs with mobile policies

With technology it is now possible to equip employees with ethical guidance that is not only user-friendly, but also available to employees in their pockets at the moment when they make judgments. 

How Silicon Valley Approach Will Disrupt Broken ’Compliance’

How Silicon Valley Approach Will Disrupt Broken ’Compliance’

Many companies have established Compliance Program over the last decade, but recent ethical scandals evidence that the programs are not impacting behavior. We explore how technology will make efforts instant, affordable and more impactful. 

Lawyers no longer in right answer business

Lawyers no longer in right answer business

Many see lawyers in the traditional and comfortable role: interpret external laws and regulations to advise whether business activities are legal or not. Recent ethical breakdowns, however, highlight what had become evident in recent years: the standard for what is considered acceptable (...). 

Do your leaders walk the talk?

Do your leaders walk the talk?

How do you assess whether leaders will drive sustainable performance or build a house of cards that will eventually collapse? Answering this question has become critical with ethical breakdowns causing billion-dollar fines, reputational disasters and a financial crisis. Well, it really comes down to whether leaders ‘walk the talk’, i.e. take responsible decisions and create conditions for others to do the same. But what does it mean and how do you measure it?

Just ask employees. With the Responsible Leadership Matrix below, employees can - within seconds - reveal whether or not your leaders promote and act with integrity. You can easily to map out your leaders to make sure only the right ones stay and performance lasts.

FOUR LEADERSHIP TYPES

The Window Dresser talks about integrity in speeches, newsletters and other communications, but does not back up words with actions. He or she fails to realize that daily remarks and decisions have much stronger impact on employee behavior than majestic statements on ethics. This “do as I say, not as I do” attitude leads to cynicism, destroys trust and saps employee motivation. Companies should terminate its window dressers if they do not immediately take responsible decisions that reflect both economic and ethical perspectives.

The City Snake leads people as ‘general on a horseback’ with an autocratic, controlling style that went out of fashion along with the black and white television. Although city snakes do not promote or act with integrity, companies still employ them for their undeniable drive for (short term) results. With the characteristic “whatever it takes” management style, they lead using fear, shrug at ethical shortcuts, use company resources as their own and promote managers who push the envelope. The City Snake rewards those who make the numbers, whatever the means and should be terminated before destroying companies.

The Lone Rider acts with integrity but does not promote it. Such failure to lead is insufficient in today’s performance-driven business climate. He or she assumes that good people will act responsibly no matter the circumstances, even when faced with business pressure and bonus seductions. The Lone rider fails to embed integrity into performance management processes for hiring, promoting, developing and rewarding people. Companies should equip Lone riders with the required skills to lead others responsibly through establishing clear behavioural expectations, encouraging challenge and introducing balanced performance incentives.

The Responsible Leader champions integrity through words and deeds. He or she invites challenge and embeds ethical behavior into key management processes. As a consequence, the performance appraisal system not only ensures clear expectations for what is to be accomplished, but also for how so ends do not justify the means. The responsible leader sacrifices business deals, which do not meet integrity standards. He or she recognises responsible business as a competitive advantage, which attracts talent, improves motivation and drives innovation by forcing reflection beyond a narrow commercial focus.

How quickly can you map your leaders in the Walk the Talk Matrix? If you are a leader yourself, wear a t-shirt with the matrix on your back and ask employees to pencil you in (and hope that you don't get pain on the left side). 

Why living values must be rewarded

Why living values must be rewarded

Many argue that companies suffering from ethical breakdowns had failed to effectively communicate their corporate values. However, even communicating values works like nailing jelly to the wall, unless living them is rewarded.

In continuous push for growth, leaders in performance-oriented organisations expect a relentless drive for results. To orchestrate ambitions, they have established sophisticated performance management processes with robust means to define, measure and reward results. However, many of the same organisations have been sloppy in defining, measuring and rewarding how this performance should be achieved, leaving employees pushed to cut corners when faced with pressures or seductions.

Leaders are quick to claim that rewarding adherence to values is absurd; why reward something that is simply expected? Company values prominently placed on the wall at corporate headquarters already define how to behave and the Code of Conduct sets the limits. Moreover, values are too subjective and impossible to measure. So it goes. Well, performance-driven organisations already do reward what is expected: leaders are rewarded for leading, researchers for researching and sales people for selling. In the end, an organisation rewards what it believes is important. Therefore, if it strives to have employees live its values, it must reward it.

The solution to responsible performance is a two-dimensional reward system, which measures the achievement of business objectives against adherence to company values with direct impact on bonus payout and career potential. Objectives must be attainable while living company values as pressures to perform due to unachievable, short-term targets lead production-line workers to look away on quality issues, bankers to sell junk, researchers to fabricate results, and sales people to fix prices with competitors. It is therefore important to define how objectives are to be achieved, to ensure they are not met at all costs in an endless quest to keep a job or reap rewards. As an example, an employee may have an objective to ‘improve profitability’, with a measurable target of, say, 5%. Likewise, the company may define ‘demonstrate ethical conduct’ as a measurable behaviour, derived from its value of integrity.

The performance can thereby be measured on both what and how dimensions. An employee may demonstrate during performance discussions, supported by peer feedback, that he met the profitability objective. Similarly, he argues that he has delivered on the behavioural expectation of the ‘integrity’ value having, say, terminated dealings with a corrupt third party (the measurable behaviour) despite pressures to keep the profitable relationship. Hence, the two-dimensional reward system would rectify a situation where, as an example, a greater 20% profitability could have been achieved through dealings with the corrupt third party (or through Libor or emission manipulation), as it would result in a poor performance rating and loss of bonus. With its transparent focus on both what is achieved and how, the two-dimensional reward system brings business conduct in line with company values.

Leaders in companies ask themselves why some employees cross the line despitevalues being communicated left, right and centre. Well, unless they reward not only what is achieved but also how, companies will continue to make front-page news for the wrong reasons. In today’s cutthroat competitive environment, rewarding howperformance is achieved is not absurd - it is a must for performance-driven organisations striving to be sustainable.

'Compliance Culture' no thanks.

'Compliance Culture' no thanks.

In the wake of continuous ethical breakdowns, lawyers feel mandated to foster a 'compliance culture'. Meanwhile, the risk management function works towards a 'risk management culture', even if colleagues looking after the workplace argue for a 'safety culture'. Business leaders push for an 'innovation culture' and marketeers wish for 'start-up culture'. Well, which one is it? No wonder employees are confused. Why not simply empower and reward people to be creative and responsible while working towards a meaningful purpose. Call it whatever you want.