Uber is working its way through the most turbulent year of an already dramatic history of upending a centuries-old global industry. In June, CEO and founder, Travis Kalanick, stepped down as CEO shortly after the company’s board pledged to accept the cultural recommendations of former Attorney General Eric Holder and his law firm Covington & Burling LLP.
Although that move sent a message that the company is taking its underlying cultural troubles seriously, and is taking steps to overhaul its leadership in line with recommendations of Holder’s law firm, Kalanick retains his seat on the board. At least for now; one of Uber’s big investors has just announced a lawsuit aiming to change that.
For compliance and ethics professionals at all companies, the headlines about Uber offer an opportunity. They should use this moment in time to engage senior leaders about the importance of an ethical culture, and about what the firm can do to protect itself.
Those same professionals may say that promoting an ethical culture has been high on their agenda for a long time but, despite an increase in time and resources devoted to cultural measurement and enhancement, there has only been an improvement of less than 1% in the average employee’s perception of corporate culture since 2008, according to CEB data.
What Uber has been doing in the public eye — making senior management changes and making leaders more accountable — is indeed important and valuable. However, relying solely upon this kind of top-down approach is unlikely to produce sustainable cultural improvements across the organization by itself, especially among rank-and-file employees.
Uber hasn’t made public announcements about efforts to make changes at the level of individual teams. And, although we don’t know what the company is doing in this area, working and affecting the behavior of all employees is a crucial piece of puzzle when trying to produce an effective, sustained cultural shift.
The Link Between Culture and Work Climate
In fact, analysis of the drivers of a culture of integrity shows that the “climate” an employee works in (e.g. the practices and procedures employees follow and the behaviors they observe being rewarded and supported) is the most significant variable separating strong from weak cultures.
The idea is that peer-to-peer interactions and a shared understanding of what is and isn’t acceptable helps to create a climate where cultural change (good or bad) is encouraged from the bottom up. In strong climates, that encourage a culture of integrity, employees actively help each other to avoid misconduct, see colleagues rewarded for positive behaviors, and are provided with messages about how to exhibit positive ethical behaviors in their own work.
Unfortunately, over 70% of employees now work in weak climates, according to a CEB survey of over 5,000 respondents around the globe. But the good news is that company teams can take steps now to improve their corporate climates. And now is the best time for compliance and ethics teams to act, given how much attention Uber and other stories have given to corporate culture lately. Three steps will help.
Help employees understand and exhibit good behaviors in their daily workflows: Your company won’t have a strong climate if employees only understand how to avoid misconduct. Knowing the wrong thing to do doesn’t necessarily mean you are going to do the right thing. What compliance teams should do is provide guidance on how to promote good behaviors in day-to-day work.
For example, the compliance team at one firm in CEB’s networks offers tools to help each employee identify compliance risks he or she is exposed to frequently. Using these, employees then find it easier to initiate conversations with direct managers, teammates, and colleagues who are facing similar issues, and to jointly determine what they should do to mitigate such risks.
Help managers send consistent messages about what constitutes ethical behavior: Managers tend to overestimate the effectiveness of compliance messages they send to the team. For example, a manager might think he or she is doing a good job by simply announcing an “open-door policy” (where employees are allowed to come and talk to their manager about whatever is on their mind – not just their own work) without actually doing anything positive to invite or welcome a sensitive conversation.
This inconsistency between a managers’ words and actions can easily confuse and discourage employees. Compliance teams should remind managers of their impact on employee behavior and urge them to demonstrate consistency between what they say and what they do. The compliance team at an aerospace firm in CEB’s networks developed a self-assessment tool to help managers talk about and model ethical behaviors.
Reward positive behavior, and do so visibly: Many compliance programs already understand the importance of disciplining those who exhibit bad behaviors, but tend to overlook the equally important step of recognizing positive behaviors across the company. Publicizing stories of people doing the right thing not only encourages those people to keep up the good work, but also gives others the incentive to do the same.
One compliance team at a manufacturer in CEB’s networks publishes real stories of ethical behaviors on the intranet for all employees, and another team at another manufacturer helps managers reward employees for exhibiting ethical behaviors, and sharing stories about how the employe did this at team meetings.