Promoting Your Culture: Communications and Measurement

This article was republished with permission from Michael Volkov’s blog, Corruption, Crime & Compliance.

As everyone knows, I am an advocate for promoting and maintaining a company’s culture of ethics and compliance (not compliance and ethics). The best investment a company can make is to create and maintain a positive commitment to an ethical culture.

I often repeat myself (just ask my wife and kids), but a culture of ethics is far more important than well-designed and effective policies and procedures. It is in fact the best internal control against corporate misconduct.

At a minimum, a positive culture of ethics requires the commitment of the Board, the CEO and senior management. A CEO has to require senior managers to reinforce the message, carry out specific duties each year and dedicate time to communicating the company’s culture.

Given the importance of company culture, CCOs need to rethink their strategies for promoting a positive ethical culture. Two key components are required: (1) communications strategies and (2) measurement.

A CCO has to work closely with the CEO and senior managers to communicate the company’s cultural message. The CEO has to dedicate time to address senior managers, middle managers and employees at annual and smaller meetings to demonstrate personal commitment to the issue. The CEO has to own the issue – appearing and speaking as a figurehead will not work and is quickly dismissed by managers and employees.

The communications strategy is simple and includes all avenues to address company employees – social media, meetings, newsletters, blogs – and is reinforced by senior and mid-level managers. It should be a well structured program, robust and carefully managed.  If it is haphazard — grab the CEO when you can — it will never take hold.

Given time and resource constraints, CCOs inevitably rely on human resources and general surveys to take the pulse of a company’s culture. While a good first step, these surveys merely scratch the surface of a company’s culture.

It is critical to delve deeper into a company’s culture and bring out real trends and employee concerns. The more that is unearthed, the better for the company. Like the basic theory underlying Jungian psychology, unearthing a company’s complexes is liberating and allows the company/person to address the motivations and ideas that otherwise reside in the company’s unconscious.

There are a variety of strategies for conducting employee surveys. I have urged companies to conduct employee culture surveys targeted to high-risk areas and/or operations. There is no requirement that a survey be conducted across an organization. Instead, it makes sense to see if a cultural message is taking hold in some difficult areas like China, India, Brazil or other challenging markets.

Additionally, I would always look at complaint data and slice and dice the data to see what areas have employment issues, where employees are raising concerns or locations where supervisors are having difficulties with employees. All of these indicators may reflect situations where the company’s culture is lacking.

If employees do not trust an organization and its leaders, employees will be more willing to engage in misconduct to benefit themselves. If there is shared mission, company cultures can quickly embrace self-promotion, survival and circumvention of company rules.

The trick for CCOs these days is to manage a company’s culture. It requires a CCO to build a strong alliance with the CEO, to enlist the CEO to promote the culture (not with talking points but with actions) and ensuring that the Board of Directors is kept apprised of the measurement and status of the company’s culture.

CCOs have to venture into what has been otherwise uncharted waters – promoting a company’s culture as one of many important internal controls. All too often CCOs stay in their comfort zones and continue to report on information that is either irrelevant or just a small piece of a company’s ethics and compliance program.