Human Capital Briefs

Research: We Should Speak Up About Ethical Violations More Often

February 25, 2014

Whistle-blowing reveals not just acute misdeeds, but chronic and longstanding patterns of misconduct. For example, Edward Snowden’s bombshell release of more than 200,000 documents revealed questionable government surveillance programs that existed for years. Miami Dolphins player Jonathan Martin withdrew from play, alleging more than a year of emotional abuse from teammate Richie Incognito. These high-profile cases are just a few examples of what happens in organizations large and small every day.

And yet, many leaders wrongly believe the path to consistent, proper conduct is special methods to reward whistle-blowing — offering incentives to truth-tellers who report major lapses. The SEC, for example, offers up to 30 percent of recovered funds as payment to those whose testimony aids in prosecution of corporate wrongdoing. One payment recently topped $14 million. Is a multimillion-dollar payday the key to corporate ethics?

My experience and our latest research of 926 employees from around the world confirm it’s not. In fact, the primary predictor of corporate rectitude is creating a culture where employees regularly feel both motivated and able to hold people accountable for garden variety complaints — when they do, our study shows they are six times more likely to blow the whistle on major corporate ethics violations.

Other startling findings offer insight for leaders concerned with avoiding both corporate corruption and the devastating effects of its sudden public revelation.

First, small ethical lapses are already happening in your company. Two-thirds of respondents report regularly witnessing either minor or major ethical infractions. Your safest bet is to conclude you already have problems. The top three minor ethical violations include: taking credit for someone else’s work, taking extra long breaks, and calling in sick when actually well. A third of respondents reported seeing one of these minor infractions in the last week. But only half of those said they spoke up about the problem.

The biggest problem isn’t the sin, it’s the silence. Even more of us stay silent when the infraction is a major one: an alarming three out of four employees stay mum when they see gross violations. Taking unfair revenge, embezzling significant value, and coercing sexual favors are the most common major infractions observed. And yet organizations rarely go into moral freefall. More often, egregious offenses are the endpoint of a long, unplanned decline. Compromises become conspiracies and peccadillos become policies only when early transgressions are met with silence. Others witness the actions, feel distress, but say nothing. When we asked people why they don’t speak up, the common responses included:

1. It might damage my career.
2. It would have made the offender harder to work with.
3. I didn’t think I would be taken seriously.
4. I wasn’t sure how to bring up my concerns.

And yet our survey found that previous practice, not degree of fear, predicts who speaks up.Respondents who confronted big problems had just as many fears as those who did not. The difference between the silent and the vocal was whether they previously confronted minor infractions in an effective way.

For example, Carl, a survey respondent whose name has been changed for anonymity, previously addressed concerns about slacking colleagues. That experience likely increased his sense of efficacy in handling dicey conversations.  Later, when he discovered that his CEO was guilty of falsifying sales records to make the organization appear more successful than it was, he approached both the CEO and the board. He was fearful of reprisal. He was not certain of his conclusions. And yet, he spoke up. His CEO went to jail, but the company, and Carl’s job, survived the resulting bankruptcy.

Our study showed that like Carl, those who learned to wag their finger promptly and politely are the same ones who will blow the whistle when needed. On the other hand, the more often people suffer in silence, the more likely it is that norms will shift, ethics will decline, and companies will suffer severe consequences.

Low-accountability cultures are fertile ground for major problems. Conversely, when leaders intentionally create a norm in which employees address daily accountability concerns with bosses, peers, direct reports and other departments, the organization wins twice. Not only is present performance dramatically improved, but the organization inoculates itself against creeping corruption. History reveals a long line of washed-up leaders and immoral companies that are eventually ousted for their crimes. This study indicates that their demise may have been more predictable than we suspect.

Our past research reveals some best practices for dealing with day-to-day accountability concerns also known as blowing the whistle.

First, tend to your safety. If raising the issue to the offender directly will cause you harm, seek security, HR, or legal assistance. Then take the following steps:

• Gather data. Given that you’re likely to encounter confusion and denial, gather all the data you can to help make your case. The clearer your data, the more likely you are to be persuasive.
• Avoid conspiracy. If you have an obligation to report the offense, do so immediately. If the lapse is offensive but not reportable, confront the individual respectfully and directly.
• Start by sharing your good intentions. Begin by letting the other person know you have his or her best interests in mind. This shows your purpose is not to question motives or authority, but to deal with a possible problem before it spins out of control.
• Share your facts. Lay out the concern using data—strip your explanation of any judgment or accusation.
• Tentatively share your concerns. As suspicious as the activity may seem or how clear your observations, there might be a reasonable explanation. Use tentative terms and expressions rather than starting with an accusation.
• Get the other person’s point of view. Once you’ve described what you think you saw, ask the offender for his or her perspective. But be careful—you are not inviting his or her view in order to surrender yours—just to ensure you have all the facts. Listen for information, not excuses.
• Take it up a level. Finally, if you can’t work it out to your satisfaction, either take it to your boss or to HR. You’ve shown your respect by talking directly to the offender and now you have to involve another party.

 

This blog first appeared on Harvard Business Review on 1/8/2014.

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