As shared in our 2024 Code of Conduct Report and the LRN 2024 Ethics and Compliance Program Effectiveness Report “the leadership disconnect persists.” That divide, between executives and middle as well as front-line managers, exists not only in the context of perceived corporate culture but also in how codes of conduct are embraced as a resource. Reflecting on the data from the Code of Conduct Report, the implications of codes not being utilized by the workforce can be considerable, where rules, policies, and procedures can be diluted or discarded, not necessarily due to deliberate circumvention, but to the perceived needs of ‘getting things done.’ As shared in the Code of Conduct Report, “a code is as only as good as its rollout and the leadership weight behind it,” adding, to train on the content of a code and “then throw it into the proverbial drawer contributes to a lack of engagement, which is the last thing an organization striving for a dynamic E&C program should want.”
Once again, that returns us to the challenge, as shared in a prior post, on how to ‘unfreeze’ that frozen middle between leadership and the wider workforce, including how codes of conduct are embraced and utilized.
Based on LRN’s survey data, conversations with clients, best practices, and academic research, we have identified several scalable and high-impact solutions and strategies to make sure that codes of conduct can amplify as they move through the organizational chart, both internally and externally.
- It can be as easy as one, two, three.
As shared in a recent Harvard Business Review article, Turn Employee Feedback into Action, “even if leaders instruct middle managers to take action…they often neglect to follow up on how actions are working and communicate those updates across the organization.” The authors propose a 1-2-3 “rule of thumb” to mitigate this challenge: “Select one topic, do two things about it, and check in at least three times on progress.” As the authors state, when new initiatives are not monitored by leadership, “managers often don’t use them.” Thus, the next time you roll out or update your code, perhaps select one new part of the code, pertaining to a new risk or element, and empower middle-level managers to not only cascade those challenges but to use their ‘voice’ to amplify them to their teams and ask for feedback. By having an open feedback loop between managers and teams on code initiatives, you can receive invaluable feedback as to what additional queries need to be addressed to ensure that everyone understands the ‘why’ of those policies, rules, and procedures. As we found in the E&C Program Effectiveness benchmarking data, high-performing E&C programs have a much higher level of tracking and measurement of how Codes are being understood and resourced by employee groups. In other words, what we can’t track, we can’t measure, and what we can’t measure, we can’t properly address.
- Ignore Gen-Z at your own risk.
While it might be intuitive to think that Gen-Z (we define as being born between 1997 and 2010) is more committed to sustainability and ethical work practices than prior generations, our data, both in the 2024 Code of Conduct Report and the 2024 Benchmark of Ethical Culture report demonstrated a much different kind of conundrum.
As shared by Ty Francis, LRN Chief Advisory Officer in a post titled Tailoring ethics and compliance training for Generation Z, Gen Z employees “are 2.5 times more likely than Baby Boomers (we define as being born between 1946 and 1964) to agree that it’s acceptable to break the rules to get the job done, and nearly a quarter of Gen Z admitted to engaging in unethical behavior.”
We shared these counter-intuitive findings during client roundtables and conferences to see how this could be addressed, and there seems to be consensus around getting younger employees involved in program ‘formation’ early on, codes included, so they see the challenges that the organization faces, and that not all risks are equal. It also provides them with an appreciation that resources to address all potential reputational and regulatory risks are not unlimited, which provides them with a better sense of the importance of organizational culture and why values (as opposed to only policies, rules and procedures) are integral part of Codes of Conduct.
- Think about your Code with a big C and a small C.
While we might think of a Code of Conduct as a global and enterprise-wide document, we might not appreciate the role of mid-level managers in not only endorsing those codes but in enriching them. As shared in the MIT Sloan Review article, Building Culture from the Middle Out, while we might consider “big-C” as the wider culture and codes that govern an organization; it’s the “small-c” culture that “describes the qualitative experience of day-to-day patterns of interactions.” In this big and little C context, mid-level managers are uniquely qualified to link those big C initiatives, codes of conduct included, to the little-c “soil that they are responsible for tending.” The authors found that the highest level of mid-level performers were those who “were attentive to both the culture of the entire organization and the narrower culture within their sphere of influence.”
Thus, while you might consider your middle-level managers as a lever in cascading your codes of conduct to the wider workforce, why not leverage their influence in the organization to inspire their teams to embrace and contextualize global codes to the challenges which their teams face? As we know, risk is not a one-size-fits all challenge or solution. So who knows better how to calibrate those codes to the real-world challenges that teams face? Your mid-level managers: In our world of economic uncertainty, now is the perfect time to take the opportunity to ‘unfreeze’ that potential, have them engage with the Gen Z workforce as to bring in diverse points of view and bring your codes to life in a way that’s both understood and embraced. As the Code of Conduct Report shares, everyone deserves an opportunity to “know what good looks like” by rolling out policies, rules, and procedures that are “inspiring, approachable, and interactive.”
As the United States Department of Justice shared in its latest release of the Evaluation of Corporate Compliance Programs, responsibility “for integrating policies and procedures” as well as rolling them out “in a way that ensures employees’ understanding of the policies” is mission-critical to any E&C enterprise, so why not bring those mid-level managers into your Code of Conduct initiatives as to let the ‘thaw’ begin.