Editor's note: This Shark believes that the Probate Court of Cook County, one of the worlds most untrustworthy and corrupt organizations, would prove a virtually unachievable challenge for Dr. Hurley's Consortium of Trustworthy Organizations. Lucius Verenus, Schoolmaster, ProbateSharks.com
A Matter of Trust
Despite what recent headlines about General Motors and the U.S. Department of Veterans Affairs may suggest, some American enterprises are dedicated to being trustworthy and ethical, and they have been deriving a competitive advantage from their efforts for years.
By Matthew Brodsky
Tuesday, July 15, 2014
Is it possible to erode that which isn’t there?
Recent scandals at General Motors and the U.S. Department of Veterans Affairs are but the latest headlines that leave employees and the public wondering if American private and public enterprises have any conscience. Robert Hurley, professor at Fordham University in New York, knows better. He and the team at the Consortium for Trustworthy Organizations believe that ethical companies still exist and that they can help stem the tide of distrust. It's with this goal in mind that the Fordham-based organization held its "Forum on Building a Trustworthy Organization" in New York last month.
Hosted in conjunction with The Conference Board, the event featured such topics as senior management’s perspective on trust, compliance controls and monitoring, and creating a culture of trust. Speakers and attendees came from such firms as TIAA-CREF, Lockheed Martin, IBM, Sysco, FINRA, General Electric, Edelman and Novartis.
"We were able to attract so many high quality speakers from companies because many companies are actively trying to learn how to be more trustworthy," says CFTO Director Hurley. "They are more than willing to help solve the trust problem by teaching others."
While the sharing of thought leadership and best practices was the order of the day in New York in June, significant competitive advantage exists in being a trustworthy organization.
"In an era of unprecedented transparency, reputation is both fragile and a competitive advantage. And reputation is a key element of an organization’s brand both in attracting customers and employees," says Ravin Jesuthasan, global leader of talent management for Towers Watson in New York and a CFTO forum participant. "We also find that key elements of trust, specifically company image and the credibility of senior leaders, are significant drivers of employee engagement."
The topic -- the benefit of building a trustworthy organization -- is not new for forum participant Lockheed, or the defense and aerospace industry as a whole. In 1986, 18 members of the industry formed the Defense Industry Initiative on Business Ethics and Conduct. Its first steering committee chairman was legendary GE leader Jack Welch. The group wrote up codes, vowed to follow them and trained employees to comply. Now 78 companies are members of the consortium.
Lockheed was there from the start, according to Craig Cash, director of ethics and business conduct for Lockheed Martin's Mission Systems and Training Division, who teaches a history course to employees on Lockheed's ethics efforts.
The company's push to "right the ethics ship" began in 1977. The core of the company’s strategy is a central office of ethics and sustainability. Its head, Vice President Leo Mackay, reports separately to the CEO and the board of directors. Office representatives are stationed at every location where Lockheed does business. They report up through Mackay's office and can investigate an issue onsite, and their faces are displayed on a poster at their respective locations. Local employees then know whom to reach out to with issues.
"There is always an avenue," Cash says.
What path can organizations take if, unlike Lockheed, they are just beginning to build a culture of trust?
The hard road.
They face challenges. First is overcoming the doubt when they announce their intent to become trustworthy.
"People are always skeptical that what the company is doing is in their best interests," Cash says.
With implementation comes another common obstacle: the misconception that the "tone at the top" can drive trust.
"Tone at the top is always good," Hurley says, "but if behavior in the middle is unethical, there will be trust violations."
Trustworthiness must be embedded in company culture throughout. At high-trust companies, Hurley has found that HR, along with compliance departments, works with line managers to shape culture. Because of their importance in the process, HR and compliance departments at these firms are staffed with high-quality leaders who carry respect and power within an organization. All of their powers of influence can be called upon.
"Getting senior management to pay as much attention to integrity and trust as they do profit and stock price is a big challenge," Hurley says.
That reveals perhaps the most serious challenge of all: staying on the straight and narrow over time despite corporate short-term focus. "Organization drift" is to blame for most trust violations, according to Hurley, rather than "evil managers," and HR must lead in helping organizations learn what may cause drift and find ways to mitigate it.
"Organizations are always trying to cut costs, change and optimize. We need to make sure this process is mindful," Hurley adds.
"There needs to be an inexorable push, because it takes time to build that trust," Cash says. "You can't declare that 'We're going to be ethical and that be the end of it.' "
No comments:
Post a Comment
Thank you for commenting.
Your comment will be held for approval by the blog owner.