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Addressing Corporate Culture: Is Yours at Risk?



A growing organization was recently finishing a strategic planning session when one of the executives expressed evident relief. She was authentically enthused by the project’s outcomes and paths for moving forward. Admitting the organization’s growth had challenged their cohesive team, she shared a recent personnel issue that would have been much easier to moderate through the lens of the core values just identified. By articulating behavior in relation to values— caring, for instance—there would have been shared meaning and expectations among these employees. A values-based culture can serve as a significant lever in critical conversations, driving high performance, increasing joy in vocation and creating appropriate metrics. This particular organization has been able to emerge as an industry thought leader during this COVID-19 challenge, arguably due to its identified and practiced shared values.

DEFINING ETHICAL CULTURE

Culture describes a set of common beliefs, assumptions, reward systems and narratives. Companies demonstrate ethical business cultures by complying with legal requirements, while also living moral values.


The U.S. Sentencing Commission recognized the significance of an organizational culture in its 2004 “Amendments to the Federal Sentencing Guidelines,” encouraging ethical conduct and commitment to legal compliance. Unfortunately, the murkiness of culture causes many organizations to simply resort to lofty mission statements and voluminous compliance manuals with no follow through.


Kenneth Goodpaster, Ph.D., describes the creation of an ethical culture in Conscience and Corporate Culture. He employs the process of orienting, institutionalizing and sustaining values, maintaining a company without a shared sense of direction and imperative has no ‘compass’ when confronted with crucial decisions. He also describes how these imperatives were all at the core of classic business scandals such as Enron, WorldCom and others.1


CULTURE, RISK AND OPPORTUNITY

A 2013 article describes the relationship between culture and risk, articulating the responsibility of a corporate board to create and protect culture, as well as anticipate its correlating ethical risk. Risk is not a new concept, although it has taken an increased level of awareness. The chief risk officer is often in the boardroom, identifying key opportunities and threats. Risk management ultimately asks, “How might we be wrong?” Not anticipating potential risks could result in precarious repercussions. Peter Young, PhD., believes a risk manager’s future success is tied less to technical skills and number crunching than the ability to influence people and construct narratives. He also explains that Modern Risk Management (MRM) suggests that risk assessment should include consideration of the ethical aspects of any opportunity or threat.2


EMBEDDING CORE VALUES

While Goodpaster examines institutionalizing organizational conscience, best-selling author Brené Brown, Ph.D., LMSW, describes operationalizing core values in Daring to Lead. Brown asserts the operationalization of values fuels productive decision making. “When values aren’t clear, we can easily become paralyzed—or, just as dangerous, we become too impulsive. Operationalized values drive what I think of as the sweet spot of decision making: thoughtful and decisive.”3 If caring is a core value, does it actively and apparently live within the organization? Research shows stakeholders are selecting organizations that resonate with their own personal values. Millennials are even more predisposed to choose brands that reflect their principles, conducting pointed research about corporate investments, board makeup and employee morale.


Now is the time to define and operationalize your organization’s core values. Start by having leadership identify the top three to five values. Then ask questions to determine how well each specific value is embedded within operations. For example, caring:

  • How is caring demonstrated within planning strategies?

  • How is caring reflected in programs and processes?

  • How is caring manifested within leadership selection and expectations?

  • How does training build the team’s understanding of caring?

  • How is caring evaluated for all stakeholders?

RECOVER AND SUSTAIN

Recovering from COVID-19, organizations are faced with tremendous challenges amidst daunting budget shortfalls. While an ethics review may be deemed optional, most visionary boards will see culture assessment is a risk mitigation strategy, addressing whether or not the organization is demonstrating integrity and sustaining organizational culture. While hope can sustain individuals during times of strife, a values- driven culture may sustain an organization and its stakeholders in and beyond these challenging times.



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