Laws of Change: Bringing Values to the Forefront

I recently met with a senior executive of a publicly traded company who told me that lawyers were running – and ruining – his business. Despite scores of initiatives, managers still didn’t know how to deal with the subtle problematic behaviors that crop up in the workplace. And because there were no obvious legal violations, the legal “hammer” was not effective in motivating behavior change.

When it comes to managing workplace behavior, we often think of the “high-risk” conduct that can lead to lawsuits, scandals, and huge payouts: harassment, discrimination, retaliation, and other behaviors that violate legal or regulatory statutes. As an attorney, I’m all too aware of the problems organizations face if they fail to prevent or appropriately address these kinds of behaviors. Over the past few years, however, I’ve seen a marked up-tick in concerns expressed by leaders over “subtle” or “gray area” behaviors. The conduct doesn’t necessarily violate the law, but it’s causing serious harm in the organization. People are humiliated in front of their peers, yelled at, ignored, or demeaned. Employees aren’t sure whether they should complain, and managers don’t know how to coach employees or handle issues if they are in fact brought to them. The end result can be a gradual undermining of the culture, teamwork, reputations, and ultimately, business results.

The irony is that we’ve entered a period of business management where there is heightened emphasis and focus on corporate values. Yet these “subtle,” problematic behaviors, and the lack of adequate leadership response to them, represent a failure to operate by the values. With all the time and effort spent crafting values, discussing them, and publicizing them, the evidence is clear: many organizations seem unable to integrate them into the daily workplace culture. The question is, why?

Finding Meaning Behind the Words

For all the intense work and battles over this term or that, corporate values – from pharmaceutical firms to paper mills – are more alike than dissimilar. They may use different words (though often they are identical), but generally those that relate to workplace conduct include terms like honesty, integrity, excellence, inclusiveness, teamwork, and lawfulness. Presumably, these values are the foundation for building workplaces characterized by those kinds of positive behaviors.

Frequently when values are communicated, however, three problems arise. First, they’re not presented as necessary ingredients for business success. To have any impact, they must be developed and communicated with a clear link to the health and advantage of the organization and for the benefit of all members of the workplace community. If people can’t relate the values to their daily work lives, there is little practical benefit in having them.

Several years ago, I worked with a manufacturing company with values that included safety and respect. Their senior executives could readily explain how safety affected the jobs they managed and the correlation between job site procedures and safety. They understood how safe practices benefited them, their team, and the organization. Yet when they began to discuss the impact of respect on the work environment, they were hesitant and vague. Most couldn’t explain how respect drives business success, and as a result, employees wouldn’t see the significance either.

Second, values are often discussed at high conceptual levels without behaviors attached to them. Many times, I’ll see an organization’s values and they’re just words on page with no explanation following. Looking at a list of disjointed words, any two people could legitimately define and apply the terms differently and each could honestly claim that he or she was acting in line with the organization’s values.

At the other extreme, organizations can get too specific. I recently worked with an organization that had values tracked to numerous, precise behaviors. Without a photographic memory or a Ph.D. in philosophy, it would be difficult to remember them and understand what they meant. Thus, being either too vague or too specific leads to the same result: values that are pushed to the side of organizational consciousness and functionally useless in terms of driving day-to-day to business behavior.

At their essence, these problems represent a failure of effective communications. If consumer product companies branded and marketed their goods as ineffectively as many of them communicate their values internally, no one would understand what they did or want to buy what they sold. I recently met with executives at one such firm whose products are well known and whose brand messages are instantly recognizable. Because they know how to communicate and sell ideas, they’ve affected consumer behavior: we’re willing to buy what they sell and will pay a premium for it. But they have struggled internally with the question of how to communicate and explain simple standards of conduct tied to their values.

Too many disparate, confusing messages permeate the work environment today, and the end result is people tune them out. Working more closely with the internal communications team, executives need to apply the consistency and clarity of external communications to their internal cultural initiatives. Otherwise, messages about values become nothing more than background noise.

Putting the Law in Perspective

While most organizations are placing a deliberate emphasis on values and implementing various values-related initiatives, mandatory training regulations and compliance requirements have a tendency to cloud this focus. Many leaders can get caught up in the intricacies of the requirements, narrowing their focus on meeting minimum legal standards and losing sight of the broader values-based objectives. In many organizations, complying with legal standards then becomes the entire initiative when it should be just one element of a larger cultural strategy.

Emphasizing the importance of avoiding legal risk over the importance of operating by the values creates vast differences in the workplace culture, even in organizations that may be very similar in other ways. For example, I work with two companies that sell competing products but have dramatically different management philosophies and cultures. In one, leaders brought in executives from all over to talk about how to lead ethically and operate by the company’s values. The CEO set the tone by talking about values and giving examples to illustrate how they should be applied to everyday business. Subsequent speakers also addressed these themes, and at the end of the day, everyone understood they would be measured as leaders on how well they applied the values to their actions and on their responsiveness to problems and behaviors that violated the values.

The other company convened a panel to discuss how to address workplace behavior, including requirements tied to California’s mandatory harassment training law. Whenever nuances surfaced about how to deal with inappropriate behaviors that weren’t clearly illegal, the legal chorus reminded everyone that what they really needed to focus on were the requirements of the California law, specifically the mandated topics and two hours of training. They eventually concluded that while two hours of instruction was required in California, the information could “safely” be presented in 30 minutes in states without the requirement. The point was to make sure the boundaries of the requirements were satisfied. Whether or not the training had any long-term impact on behavior and the culture (or was even applicable to most people’s daily workplace experiences) was irrelevant.

Legal compliance is compulsory, and it must be addressed and respected, but what happened in this discussion is typical in the rush to meet compliance requirements. A meeting about building a values-based culture (in which legal compliance is one component) is gradually taken over by concerns about how to build a defense to the kinds of claims that would likely be avoided if leaders were more effectively managing employee behavior in the first place. Employees from these two companies will obviously have very different views of why the values are important and what they mean to their daily work lives. Ultimately, that will be the difference, both in behavior and the workplace culture.

Training’s Role

When it comes to training, organizations spend too much time giving leaders information about basic legal, ethical, and compliance-related issues without also developing their skills. The fact is much of what we now “teach” could be distributed as a reading assignment rather than those droning lectures or boring desktop slideshows. Training should be applicable, practical, and results-oriented, with ongoing learning opportunities beyond the classroom. With the proper training and skills, leaders’ actions would help prevent many of the problems that have led to today’s maze of regulatory structures and seemingly random messages.

In typical training implementations, managers and employees learn about matters ranging from organizational processes to theories of diversity to philosophies of ethics. Managers are asked to sit through a series of legally based courses that may be more suited to a first-year law student than a workplace leader. Everyone signs statements verifying they have read and understood policies, codes of conduct, mission statements, and handbooks. The documents are then returned to corporate, filed away, and otherwise forgotten unless they need to be resurrected to prove good faith or impose tardy discipline when preventable damage has already left a trail of harm.

Undeniably, there are sound, legally compelling reasons for providing instruction on assorted regulatory topics. However, the way it’s carried out tends to increase confusion and cynicism. The training is usually “owned” and delivered by groups outside such centers of business as sales, marketing, manufacturing, and customer service. Thus the training points seem secondary to the important business concepts communicated by a department’s day-to-day managers. For this reason, managers at all levels need to be the ones delivering messages about values and lawful behavior, and this requires skills, not just information. Practical skills will give managers the confidence and ability to take control over behaviors and conditions in their work environment.

The Right Messenger, the Right Skills

First and foremost, leaders must set standards through action. If respect is a value, leaders must demonstrate it or it has no meaning. Whether the manager is the CEO or a front-line supervisor, he or she is a role model whose behavior will be emulated, so leaders must understand and represent each of the values through their own conduct.

Leaders also have to be able to talk about values in their own voice, clearly underscoring the impact of behavior on the department’s success. These discussions should occur regularly, not just when a crisis erupts. Being able to communicate authentically while linking behavior to daily business benefits is a skill that all good leaders need to be fully competent in their roles.

Likewise, when values are being compromised – whether it’s an obvious violation or a subtle one –leaders have to know what to do and how to do it. But even before an issue rises to the level of a violation, leaders need to be able to intervene using effective coaching and feedback skills. This yields long-term benefits both as a preventive measure and a way to build managerial credibility without waiting until a formal disciplinary action is the only option. Learning how to praise positive examples is just as important. Values shouldn’t be talked about only in the context of something going wrong. The key is being consistent, though, because as soon as managers make exceptions for high producers or departmental “stars,” their credibility will be destroyed.

Finding out about problems in the first place requires knowing how to welcome and respond to concerns. The fact that many leaders react negatively to complaints is the reason virtually every regulatory provision contains sanctions against retaliation (and why such claims are on the rise). Giving leaders information won’t prevent claims; the all too human reaction is to ignore or punish people who bring up problems, or to stifle their willingness to do so. Instead, leaders need to know how to actively welcome concerns and even challenges. They must also learn how to respond effectively to employees’ more ambiguous complaints or issues that may not be legitimate concerns. If people feel comfortable bringing forward “gray” issues, they’ll have more confidence in the manager’s desire to hear about the serious, potentially high-risk issues.

From Values to Behavior

Although most organizations have strategies in place related to values, the initiatives are often undermined by complex, sometimes conflicting, components. Taking a step back and looking at the broader objectives will help clarify the path to integrating values into the culture. It includes legal compliance but it’s also much more: it’s communicating values effectively, linking them to business success, and providing skills to make them come alive.