How often have you been in a situation where you knew the boundaries of your business integrity and compliance thereto (your “price”) was being tested? And how often have you failed that test?
Values, ethics, integrity & compliance (audio)
At some point in every career, there comes a time when our ethics are tested; where we are pitched against our values; where the truth that “every person has their price” is challenged for us personally. Have you had that happen to you (yet)? Can be very uncomfortable, can’t it? How did you go? Can you recall a (some) situation(s) where you “stood firm” by your convictions and (albeit maybe reluctantly) let a great opportunity go by because “it would have been the wrong thing to do”? Or can you perhaps recall one or some, where you allowed your values to be “bent just a little” and took advantage of the opportunity, and with some discomfort? I am sure that each and every one reading this will be able to recall examples of both situations like this, right? So if you are honest with yourself, are you “squeaky clean” or do you need to admit to some you are less proud of? And how do you feel about that / those now in hindsight?
The purpose of this blog isn’t to judge you because situations like these will be applicable to every single person on the planet to some degree and at some point in our lives. Agree?
So can we perhaps take the tension this may have engendered to enter into a conversation about one of the oldest dilemmas in the book? The integrity threshold.
I saw Wikipedia define integrity exceptionally well, in that it encompasses most of the words we need to use to describe this space:
Integrity is a concept of consistency of actions, values, methods, measures, principles, expectations, and outcomes. In ethics, integrity is regarded as the honesty and truthfulness or accuracy of one’s actions. Integrity can be regarded as the opposite of hypocrisy, in that integrity regards internal consistency as a virtue, and suggests that parties holding apparently conflicting values should account for the discrepancy or alter their beliefs.
The word “integrity” stems from the Latin adjective integer (whole, complete). In this context, integrity is the inner sense of “wholeness” deriving from qualities such as honesty and consistency of character. As such, one may judge that others “have integrity” to the extent that they act according to the Values and Beliefs and principles they claim to hold.
Remembering that this article sits in the leadership concepts category of my blogs, I’d like today to focus the above concepts on business leadership, however not forgetting that leadership of others must begin with leadership of self. This topic of ethics, integrity, values and compliance will always form a fundamental component of good or bad leadership and I believe, in every person and every business.
The Business Integrity and Compliance Spectrum
The way I see it is that integrity and compliance sit at opposite ends of what I call the “tension spectrum”. And that our integrity and values guides our behaviour and judgment as to which end of that spectrum we spend most of our time.
What do I mean by that? Well, as defined above integrity, honesty, truthfulness, and consistency of character are some of the key things that drive our behaviour and attitude.
Compliance on the other end defines the boundaries at which we transgress what are legal or moral rules which have been set up by society as a means for us to keep our behaviours in check; to maintain them within a limit of what is still considered acceptable; or which, once we have “crossed that line” are considered unacceptable.
I guess many people, particularly the ones that find it acceptable to maintain their position at the compliance end of the spectrum would not find anything wrong with the TAC drink driving advert line suggesting they were “only a little bit over…”, would they?
What Are Your Choices?
Like most things in life, we all face choices with which we define for ourselves where the boundaries between right and wrong or good or bad are drawn, and where we position ourselves. However, are these choices always going to be black or white: squeaky clean or unlawful or immoral? Or is there some room between them; some “grey areas”?
Last time I wrote in Pulling the right levers about how perhaps we can somewhat self-righteously interpret things to suit our own agenda, like in the example of the salesperson that would chase any sale, irrespective of at what margin, purely to fulfill his or her revenue target.
The Sales Environment – where the risks prevail
Would you agree with me that the sales environment is the one area where a fairly significant bunch of transgression opportunities show up? Both the buyer and the seller have adequate opportunity to apply or “bend” their ethics around one or more transaction or a series of behaviours. In certain industries it is more prevalent than others, even rife. In some industries and in some parts of the world it is well known that it is “part of the business culture” that the award of a contract is not possible without a “brown paper bag” changing hands.
Some companies have specific rules where buyers for instance are not allowed to accept any form of seller gratuity until after the business deal is done. I remember accepting a lunch invitation as a thank you for the business, but never before or during the deal is done.
One of the biggest such examples we can find in recent business history was the well documented case of a massive global European multinational organization that was “caught” bribing procurement officials, including politicians to secure multi billion dollar business deals.
Because of the scale and magnitude that the investigations uncovered this cost the entire Board their jobs as well as a large number of senior and middle management individuals. The company was fined almost 1.5 billion Euros, and a number of people went to jail. Notwithstanding the above “brown paper bag” culture, all over the world it is illegal to offer or to accept a bribe. And in many, if not most cases the recipient of the bribe has the personal benefit, but more often than not, the seller company funds the bribe and the sales individual has no personal benefit. In fact, in some companies the individual gets fired for this behaviour (if caught), while everyone (including the management) knows that it was “necessary” to win the business.
For me the irony and the agony I felt was that none of these company sales individuals transgressed any laws for their own personal benefit. The benefactor was the company, not the individual. (Indirectly of course the sales individual benefited by meeting or exceeding their sales target which usually made them eligible for sometimes extremely large commissions or bonuses). Any sales executive playing in that field will know that this is “part of the game” and that without it you can’t play – you just mustn’t get caught.
Those of you in large corporate business will know that there are policies in the company that underpin the laws against bribery, making it a dismissible offense to offer a bribe. Yet there will always be “special accounts” that enable such “expenditure in the interest of furthering our business”, because these companies know that it’s illegal, but necessary to win the business.
(Talking about ethics in the competitive marketplace, one might even wonder whether it mightn’t have been a competitor of this large multinational that “dobbed them in” so that every other player in those markets could breathe a sigh of relief that they weren’t the ones caught.)
The small scale
Maybe the dimensions of the above example are too far away from home. Maybe we can discuss some more likely every day scenarios that we all know to occur right here and right now. The typical “I’ll look after you if you look after me” type transactions or business favours, no matter how small. I’m sure everyone has been offered an “irresistible price” of something that had “fallen off the back of the truck”, right? Ironically, this can only ever occur if those of us that buy such goods buy such goods. Without that there would never be a market for them, would there?
My experience is that even the smallest of such transgressions raise the risk of the recipient being exploited. Of course that doesn’t always pave the way for escalated risks, but it might, can’t it?
Whether you are a business owner, business leader, or someone who is led, this fundamental question of our values, both as individuals and collectively as businesses and the ethical behaviour they expect and regulate is alive and well every day.
I’m not going to judge good or bad leadership on the strength of this factor alone, but what are the policies in your company, how are they respected and how do you as an individual (leader or led) feel about them? And how do you (or did you) deal with any transgressions when they materialized?
This conundrum will face each and every one of us at some time. If you think about your position to it when it eventuates or eventuated, how will you / did you respond?
Do you play at the values, ethics and integrity end of the spectrum most of the time? Do you sometimes play at the compliance end of the spectrum?
Or do you play at the compliance boundary often? And if so, is it because you enjoy the excitement and the “tickle” or is it because your company “expects it of you”?
Only you can answer this question for yourself, whether for yourself, the company you work for or the company or department of a company that you lead.
What are you leading, and what are you following?