Would you like decency with that?

Helping your organisation develop a values based culture, how Bushido shows the way

Open a paper, turn on a TV, or click something that’s not bait and you will not have to turn far, wait long, or search hard to find a story about bad corporate behaviour. This is no better illustrated than by the recent Mossack Fonseca (Panama Papers) and Unaoil revelations (ably supported by a cast of local stories such as 7/Eleven, CommInsure, Wilson Security et al).

So, is the surfacing of these revelations a deterioration in corporate culture and associated decline in ethical standards, or has this always been the way in which the spinning of the globe has been oiled and there has just been a rise in investigative reporting that has brought these issues out into the open?

The answer is likely a mix of the two, however the naïve optimist in me would like to think that a fall in the standard of behaviour accounts for the majority of the stories that have been broken; as opposed to the alternative of low-standards having always existed out of view.

Progressing on that basis, the question arises how do organisations ensure that their much vaunted corporate values are adhered to in the pursuit of shareholder value and returns? As we know, dollars (or perhaps what they represent) are very powerful things.

Societal values are evolutionary in nature; by way of example I cite our acceptance of violence. It wasn’t so long ago that a punch up at the pub, though not encouraged, was accepted as a form of dispute resolution. Rightly, this is no longer the case.

I therefore contend that organisations (be they government, corporate, or not-for-profit) need to have an adaptive system in place that educates their operational headcount about what is, and is not behaviourally acceptable. A one-off, tick box exercise to satisfy a checklist would not be sufficient given that the subject matter is undergoing continual metamorphoses.

An enlightening parallel can be found in Bushido: The Soul of Japan, an explanation, if you will, written by Inazo Nitobe[1] of the moral principles that Samurai were required or instructed to observe.

The nature of the system was such that it was not a written code; rather it was a set of principles that were handed down organically (not unlike an oral history) either via word of mouth, or more impressively through deed.

Interestingly, the paid fighter was naturally recruited from some fairly rough and ready personnel, it was through the generational application of the ‘unwritten moral code’ that Samurai came to be highly respected and seen as both the exemplars and guardians of the highest behavioural standards.

It was a sorting of the wheat and chaff that conveyed enormous privilege and responsibility upon those within its ranks.

It is possible to make the argument that our leaders are those now charged with passing down through word and deed the standards that are expected of their charges. These standards must be the living representation of ‘Value Statements’ and take into account the evolving expectations of society at large.

As outlined by my colleagues Rob Masters (Contrite Contrition) and John Kananghinis (The Values Deficit) in this edition of Words and Insights society at large has had enough of hearing mealy mouthed platitudes laid at the foot of the most recent scandal. They want to see leaders who own the situation and the moment; leaders who embody their values statements through their actions; thereby laying the foundations and paving the way for the next generation of Samurai to follow them, and protect society’s behavioural standards.

For a brief history of Japan, click here

 

[1] Inazo Nitobe (1862-1933) was born in Morioka, Iwate prefecture. After graduating from Sapporo Agricultural School, he went to the United States and Germany, where he studied agriculture and economics. On his return to Japan, he held various positions in education. From 1920 to 1926 he stayed in Geneva as Under-Secretary General of the League of Nations. After retiring from that post, he dedicated his life to peace. In 1933 he died in Banff, Canada.

 

 

The Values Deficit

Reconciling the need for financial value with social values that drive reputation

Creating value is the foundation stone of all business – to make or grow something, to provide a service, to improve daily life.

This is the drive that results in surplus that can be traded and that has resulted in the interdependent global market in which we live.

But there is more to what is ascribed a value. To paraphrase the Bible, “man does not live by bread alone”. We seek community, family, security and, for some, spiritual certainty and fulfilment. To achieve those ends in a civilised society we develop a set of beliefs, behaviours and ethics; a guide to our actions. We give those actions value, typically based on what we perceive the results to be either good or bad.

Whilst there may be some cultural relativity, the core social values that are supposed to guide most of us are fairly common. Honesty, respect, tolerance and fairness are seen as essential social values. Their importance is attested to by the distress and anger caused when any, or a combination of those values are demonstrably absent in the actions of others. That is why we characterise such behaviour as criminal and seek to punish it and stamp it out.

The modern global village is made up of individuals, states and corporations. In the developed world we expect the same social values to drive ethical and fair behaviour by all. We probably hold the non-individual actors (i.e. governments, corporations et al) to a higher standard, particularly given the disproportionate power they wield. Amongst those who state that with great power comes great responsibility are Winston Churchill, Theodore Roosevelt and Spiderman.

That is where companies can find themselves in major trouble. In the drive to create monetary value, shareholder value and personal value for executives, they may forget the imperative to fit within the prevailing social values. That is, there is a Values Deficit TM. When that happens corporate reputation can, and usually is, destroyed.

The 24-hour news cycle means that corporate misbehaviour will quickly gain broad exposure and, sadly, there is no shortage of examples. The result is that not only are organisations held to a higher standard, but the general disposition of most of the community towards them is inherently cynical.

To gain and maintain trust, companies must align their values to community expectation and not only live those values, but also be seen to live them. When that does not happen we regularly hear complaints about a negative and poisonous corporate culture. Complaints that can justify the business equivalent of a lynching, or, at the very least, a pelting with rotten fruit.

Not aligning with expected social values, yet still seeking to profit from the community that shares them, is the Values Deficit TM that can turn any business into a market pariah.

Any organisation that does not do a regular check of its values, the culture those create and assess if its actions and messages convey the desired values, runs a serious risk of drifting into a Values Deficit TM. The very nature of fast-paced competition can hasten that drift and create damage to reputation before it is even realised.

RMKA are highly experienced in working with organisations to assess expressed and lived values and to communicate values alignment with the communities and stakeholders that support any organisation’s licence to operate.

Is your data crisis management plan in the clouds?

Australia’s ‘catch-up’ with the digital age highlights the power of information security to make or break your business plans today. China’s recent cyber attack on the Bureau of Meteorology’s computers – although denied by China – is a timely reminder to all Australian businesses and governments that such actions can compromise sensitive systems across the whole public and private sectors.

The much welcomed recent moves by academia, business and government for Australia to ‘catch-up’ with other nations in the development of our technology innovation sector brings this to the fore even more.

It is reinforced by Prime Minister Malcolm Turnbull’s announcement of a push to protect the nation’s commercial and strategic secrets from cyber attack.

Digital crisis management now should be high on the agendas of all risk committees.

As we move towards the magical 2020, issues and crisis management plans can mark the difference between business success and failure in effective responses to digital attacks.

The Melbourne-based information security firm Trusted Impact highlighted in a recent survey that key business objectives, such as revenue growth, product quality, time-to-market, customer loyalty, company reputation and shareholders value are all at risk if information security is not interwoven into the fabric of the digital organisation.

The pace of change is such that in the past decade, we have lost iconic brands, such as Encyclopaedia Britannica, Kodak and Yellow Pages to the digital age. Their demise highlights the adage that a ‘stitch in time, saves nine’ is just as relevant today as it was in the 18th Century when it was used as an incentive to the ‘lazy’ to fix a small hole before it became a larger one.

The ‘lazy’ organisations today will quickly have large reputational problems tomorrow because of global news services if their IT, communication and management people are not aligned in their mitigation responses.

The very nature of organisations moving more and more data to Cloud is a perfect example of the need to ‘be aligned and prepared’. Losing visibility as to who has access to your data in Cloud poses the question: “How do you do ‘incident management’ in a cloud environment?”

This question illustrates the large gap between those who will respond WELL to an incident to those that respond POORLY. A clear strategy as to how to develop and implement the issues and crisis management plan for 2020 is today’s ‘stitch in time’.

The Icarus effect and the VW Diesel Scandal

Only weeks ago, VW CEO Martin Winterkorn must have been celebrating a new multi-year extension of his reign at one of the largest companies on earth. Just days ago, at the Frankfurt Motor Show, he confidently predicted that VW would secure the world automotive manufacturer number one spot. Today VW’s reputation is in tatters and he is gone.

It is safe to say that when the German Chancellor takes time out from dealing with thousands of refugees beating down the door to admonish your company and launch an investigation how you cheated emissions regulations, your days at the top are at an end.

Shooting for the automotive number one position seems to come with a curious Icarian curse. Ford suffered the Firestone /Explorer crisis, GM the faulty ignition switches, Toyota the floor mats sticking accelerators down and the Takata airbags and now VW.

In fairness to VW no customer’s lives are at risk (unless they breath-in too many exhaust fumes). In fact it is almost unique amongst such automotive industry failures given that vehicle operators are not at any risk. The risk is all at the company end. As the scale of the deception continues to unfold the reputation of VW, to say nothing of the share price, will take hit after hit.

A brand is a trust-mark and VW have shown they cannot be trusted. They have been devilishly clever, but they cannot be trusted. At least not the current management who must have/should have known about the highly sophisticated masking of emissions performance.

A senior management, and probably a board level, blood-letting will ensue. VW will, of course, survive but many more dark days are to come before one of the most recognisable brands in the world can regain the consumer and community trust it craves and needs.