HOW TO GAIN COMPANY-WIDE

INSIGHTS WITH CULTURE ASSESSMENTS

Socially irresponsible and unethical behavior is catastrophic to
company value, reputation, and long-term sustainability.

A SurveyGizmo Resource
www.surveygizmo.com
Why Corporate Culture Assessments Matter

T he best protection against compliance violations? Experts say its about

fostering a culture of ethics and compliance one that is highly-dependent
on commitment, action, statements, and conduct, according to Michael Volkov,
CEO and owner of the Volkov Law Group.

And there is no time to waste when it comes to configuring a culture that

supports and promotes strong ethics. In this short resource, you will have the
information you need to foster an ongoing, mutually beneficial culture that
encourages growth, innovation, and profitability.

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zzzzzz
Learn from Those Who
Have Ethically Misstepped
W hen previously well-respected companies like Wells Fargo, Uber, or
Mylan the pharmaceutical company that makes the EpiPen rake
in headlines such as:
Wells Fargo Adds $1 Billion to Possible Legal Cost
(Bloomberg)
Uber tackles sex assault problem by pledging $5 million to training
(The Denver Post)
The EpiPen, a Case Study in Health System Dysfunction
(The New York Times)
The conversation of these well-known entities shifts from unrivaled
success toward creating copy-and-paste-worthy cultures to how can we
get back on an ethical path. In many similar high-profile scandals, not much
different than the examples listed above, internal signals were likely
apparent well before those headlines became reality.
Essentially, workplace toxicity boils down to the intricacies and
entanglements of its culture.
For example, one Wells Fargo employee, Angie Payden, who was asked to
create unauthorized accounts by any means possible, drank hand
sanitizer to reduce her anxiety consuming at least one bottle a day.
Warning signals such as low employee engagement, retaliation, abuse of
power, or low morale, may have been more apparent than the
aforementioned company would let others believe.
Historically, compliance has been viewed as the naysayer and carries
as much popularity as standardized tests. Its not a function that
people typically get excited about or race to be involved in, if not
mandatory. And typically, a get it done and off my plate mentality
sets a negative tone from the get go.
Yet, recent scandals like those previously mentioned show that
compliance plays one of the most integral roles in long-term corporate
success. We will explore the ancillary benefits of a prominent ethical
culture later in this guide.
The compliance, and even the ethics functions (yes, they should be
treated separately) should no longer be viewed with heavy stigmas or
biases, rather, they should be viewed as a business enabler that
safeguards the company away from risk and facilitates long-term
success while ensuring integrity and ethical behavior.
No matter your industry, business size, or annual revenue
compliance should be a fundamental layer to the organizations
business ecosystem. Moving forward and sustainably growing over a
substantial period of time in todays landscape, requires a keen eye to
spot risks and warning signs well ahead of time a responsibility that
has been owned, yet underappreciated, by compliance for decades.
On the following pages, we will overview the importance of sustaining
a compliance-first culture a key ingredient to an effective compliance
program, according to Deloitte.
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Would you make bread
without flour? So why run a
business without compliance?
In a business environment where reputational threats lurk around every corner, a strong culture
of ethics and compliance is the foundation of a robust risk management program,
according to Deloitte.
Most common organizational offenses, according to Paula Desio, Deputy General Counsel,
United States Sentencing Commission USSC, include:
Environmental waste discharge
Tax offenses
Antitrust offenses
Food and drug violations

Regardless of offense, organizations like individuals carry the same criminal liability.
Organizations assume the liability of its employees. Hence, why the Commission went ahead
and defined the aspects of a systemic compliance program and adjusted fines to take into
account organizations efforts toward creating a compliance program.
Even if organizations dont meet every requirement, the Commission acknowledges the effort
taken toward building a program, and often issues fine reduction rates and incentives if there is a
noticeable effort taken.
Its telling then, why compliance has become front and center for organizations than in years
past. The consequences are grave. No longer can organizations let compliance be deprioritized
and slip under the rug. The time is now for these programs to lead the charge forward.
Creating, building, and maintaining an effective compliance program those aligned with the
Federal Guidelines -- is no easy feat. However, this short resource should provide you the
high-level details on how to get started and why it makes good business sense to do so.
And while compliance has historically been viewed as rigid and structured, its important to
remember the function has to be extremely flexible in order to meet the ever-changing needs of
the organizations employees and those it does business with.
Without flexibility baked into the framework, the functions effectiveness is proven to dwindle in
respect to influencing ethical behavior.
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Effective compliance programs contain the following elements as
outlined by the USSC, commonly referred to as the Seven Elements:

1 2 3 4
Due care in delegating Effective
Establish policies, Oversight by substantial communication to
procedures, and controls. high-level personnel. discretionary authority. all levels of
employees.

5 6 7
Reasonable steps to
achieve compliance, Consistent Reasonable steps to
which include systems enforcement of respond to and prevent
for monitoring, compliance standards further similar offenses
auditing, and reporting including disciplinary upon detection of a
suspected wrongdoing mechanisms. violation.
without fear of reprisal.

The organizational guidelines criteria embody broad principles that, taken together, describe a corporate good
citizenship model, but do not offer precise details for implementation. This approach was deliberately selected in order
to encourage flexibility and independence by organizations in designed programs that are best suited to their particular
circumstances, says Paul Desio, Deputy General Counsel, USSC.
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Tone from the Top Down Ethics and Leadership

Leaders rated highly ethical tend to have followers who engage with more
organizational citizenship behaviors and who are more willing to bring
problems to the leaders attention. Because top executives set the moral tone
for an organization, they need to set high ethical standards, demonstrate them
through their own behavior, and encourage and reward integrity in others
while avoiding abuses of power such as giving themselves large raises and
bonuses while seeking to cut costs by laying off longtime employees.
Essentials of Organizational Behavior by Stephen P. Robbins and Timothy A. Judge

Some of the best leaders also suffer from ethical shortcomings. Its imperative to remain
cognizant of where decisions stand in the light of ethics. Without keeping it top-of-mind,
the risk for making detrimental decisions at the highest level becomes greater.

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 How to Validate Business Decisions
with Ethical Frameworks

Doing so exemplifies actively embracing the culture shift many organizations are taking
advantage of.

Making good ethical decisions requires a trained sensitivity to ethical issues and a practiced
method for exploring the ethical aspects of a decision and weighing the considerations that
should impact our choice of action, according to Brown University.

A framework that can help when making ethically sound judgements,

Brown University suggests the following process:

Recognizing an ethical issue: Locate, as best as you can, the specific ethical aspects
of the issue at hand.

Consider the parties involved: Reflect on all the individual contributors and groups
who many be directly impacted by decisions, who may be harmed, or who may benefit.

Gather all the relevant information: Before doing anything or taking action of any
kind, do your homework and make sure all information sources are verified and aware
of the issue.

Formulate actions and consider alternatives: Ask any and all questions youd
imagine being faced with answering and be at the ready for varying options.

Make a decision and consider it: After all is said and done, how will you feel about
your choice?

Act: Ethical situations are not necessary the easiest situations to handle. Its best to
keep in mind that youll never have all of the answers, but action is always necessary
never sit idle.

Ethics provides a set of standards for behavior that helps us decide how we ought to
act in a range of situations, says Brown. In a sense, we can say that ethics is all about
making choices, and about providing reasons why we should make these choices.
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How to Validate Business Decisions I an Palmer, Richard Dunford, and Gib Akin put it best in their 2009 text
Managing Organization Change: A Multiple Perspectives Approach, when they
with Ethical Frameworks outlined the pressures around reputation and credibility.

...change is associated with maintaining proper corporate governance mechanisms to

ensure a positive corporate reputation. Corporate reputation, defined as a collective
representation of a firms past actions and result that describes the firms ability to
deliver valued outcomes to multiple stakeholders, as an intangible but important
Transformational change: corporate asset, being positively correlated with organizational performance.
Major change Maintaining and enhancing corporate reputation is therefore an important part of
managing firm survival... (p. 59)

Transactional change:
The transformational factors in the Burke-Litwin model:
Incremental change
External environment: Includes factors such as markets, legislation,
competition, and the economy.
Mission and strategy: An organizations mission articulates its reason
for existing.
Leadership: Considers the attitudes and behavior of senior colleagues
and how these behaviors are perceived by the organization as a whole.
Organizational culture: Can be described as the way we do things
around here.
Structure: Very often, changes in strategy can lead to changes in the
way the organization is structured.
Work unit climate: Considers employees perception of their
immediate colleagues and working environment.
Task requirements and individual skills/abilities: Change at a higher
level in the organization.
Individual needs and values: Changes to team membership can mean
a change in the team dynamic.
Employee motivation: Considers the significance of individual and
organizational goals.

The Burke-Litwin model shows the various drivers of change and ranks them in terms
of importance, according to the Journal of Management. The model argues that all
of the factors are integrated (to greater or lesser degrees). Therefore, a change in one
will eventually affect all other factors.
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 The ROI of Ethical Behavior
An organization has the capacity to do well and do good
A company should want customers who are willing to go the extra mile
to purchase its services, employees who give their all for the
organization, suppliers who feel themselves to be genuine partner
with the organization and therefore seek the deliver their best work to
the company and in a timely manner, and a community that
vigorously supports the companys legitimate business interests.
- The Enthusiastic Employee, David Sirota and Douglas A. Klein,
Second Edition
C onsidered essential for business leaders to read, Built to Last,
published in the early 1990s found a strong correlation
between long-term success and organizations alongside their
leading competitors that do good. The supporting research
was conducted over a six year period by the books authors
Jim Collins and Jerry Porras at the Stanford University Graduate
School of Business.
In 18 such paired comparisons, the best companies far
outperformed the comparison companies, on average, as well as
the market as a whole, over the long term, writes David Sirota
and Douglas A. Klein in The Enthusiastic Employee. For example,
$1 invested in the best companies on January 1, 1926 would have
been worth $6,356 on December 31, 1990.
Its not only clear in these findings, even 27 years later, that being
an ethically-driven company better positions a company for
long-term success, but when companies actively contribute to
the greater good it has lasting effects on retention rates,
loyalty, and the bottom-line.
Workers start their employment caring a lot about the
company, says Sirota and Klein. When their caring
diminishes, it is largely because of the characteristics of
management and the company, not those of the individual.
For example, people find it difficult to be loyal to, or feel pride
in, organizations that treat employees as little more than
costs to be tolerated or reduced, rather than as genuine
assets to the business.
Additionally, another study conducted by Harvard University,
found companies indicated four times the growth rate and
eight times the employment growth of companies that focus
on shareholders.
Other reasons to maintain high ethical standards for
companies big or small include, according to Sirota and Klein:
The impact of broad corporate reputation.
The trust it inspires on purchasing decisions.
Majority of consumers switch brands or retailers to ones
associated with a good cause.
Helps organizations favorably differentiate its brand from
the competition.
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 Establish a vision that is extends beyond profit

Companies that promote a strong ethical mission, encourage

employees to behave with integrity, and provide strong leadership
can influence employee decisions to behave ethically.
- Managing Organizational Change by Ian Palmer, Richard Dunford, Gib Akin

Organizations can pay to be evaluated on the efficacy of their ethical standards. Ethisphere, an
independent firm that publishes an annual list of the worlds most ethical companies has spearheaded
this effort for over a decade. The company that have made the list time and again, include:

Aflac Milliken and Company

Deere & Company PepsiCo
Ecolab Starbucks
Fluor Texas Instruments
GE UPS
International Paper Xerox
Kao Corporation
For the full Worlds Most Ethical Companies list see here.

Individual companies are judged using criteria that is is based on five

elements. These elements are then aggregated to form an Ethics
Quotient score, which is comprised of:

1 2 3 4 5
Embedded ethics
A companys ethics Leadership,
in the companys Corporate Corporate
and compliance innovation,
culture from top citizenship governance
program and reputation
to bottom

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A side from this sought-after highly-coveted designation, these companies also have another common
denominator: long-term success and profitability.

Ultimately, the economics of [unethical] behavior exacts a heavy toll that is often paid in damaged lives,
tarnished brands and crippled bottom lines, says Sharon Allen, chairman of the board of Deloitte.

Ethical companies that tightly align culture with ethics, see a stock growth rate of about double that of the
S&Ps 500, one of the leading market indicators.

That makes sense when you consider that organizations with superior ethical track records can attract the
talent and customers they need to sustain their growth far more easily and with less expense than those
burdened with questionable reputations, says Allen.

Factoring in another variable to the ethical equation is what the incoming work force values when looking
to join a company. By 2020, nearly half of the working population will be made up of Millennials -- those
born roughly between 1981-1997. The way to attract this incoming talent is vastly different than traditional
recruitment tactics such as offering high starting salary, a company car, or extended vacation time.

The new workforce looks at business from a stringent ethical lens, a stark comparison to the values of
previous generations.

In fact, this generation is considered the first to value culture over salary, and a recent study conducted by
Fidelity Investments confirms so with this staggering finding: Millennials are willing to take, on average, a
$7,600 pay cut in trade from an improved quality of work life such as career development, purposeful
work, work/life balance, and yes, company culture.

Clearly, many young professionals are thinking about more than money and are willing to sacrifice a portion
of their salary in exchange for a career move that more closely aligns with their values or passions or
improves their work/life balance, said Kristen Robinson, SVP, Women & Young Investors in the studys
press release announcement.

Fostering this optimal culture is not only great to attract top talent, but is beneficial for your bottom line,
considering the proven financial gains. In order to maintain an ethically attractive and lucrative culture,

Corporate Social Responsibility Ideas Above Things

Diversity and Inclusion Feedback and Growth
Work-Life Balance Engagement and Purpose
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How to Assess Organizational Culture

F irst and foremost, the most telling cultural aspect of any company is how you feel
when you walk into the office. Do you see employees working contently?
With frustration? Is it tense or free-spirited? Jovial or serious? Do employees have
pictures on their desks? Do you hear laughter? Do you see the companys values
framed on the hallway walls?

Each of these tidbits contribute to the bigger cultural picture of an organization.

No matter how small it may seem, such as a framed photo, it matters and should be
considered when you examine culture.

More often than not cultural assessments, as sophisticated as they sound, mostly
rely on old fashioned interviews conducted a few different ways including in-
person, digitally via survey or questionnaire, or during annual performance reviews.

If your employees understand that they are all responsible for maintaining an ethical/
compliance culture, then its the responsibility of the compliance department to make
sure their employees know how to define compliance success and know how what
steps they need to take to be successful, says Jenkins.

Methods for Assessing Culture

Insights provided by Stephanie Jenkins, Chief Compliance Officer at ethix360

Ideally, a company would want to hire an unbiased third party that would:
Review and assess the companys history
Conduct interviews and focus groups with employees at all levels of the organization to collect employee perspective
Ideally, the third party would have the ability to benchmark against similar companies/industries

But, if you are like most Compliance Offices, you have limited budget and you may want to bring groups together. Think about the
type of culture you want and the characteristics that make that culture up. From there, create your own culture assessment survey.

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Elements of a Compliance-First Culture
Insights provided by Stephanie Jenkins, Chief Compliance Officer at ethix360
All employees know that compliance is a shared responsibility.
There is no fear of retaliation. Those who raise concerns are praised and
not punished.
Compliance is built into the hiring and onboarding process, promotions,
and bonuses. This alleviates the check-the-box mentality.
All employees are held to the same standards, including leadership.
Compliance is given the resources it needs to build a successful program.

Some red flags that indicate an organizations culture is turning toxic, according
to Jenkins, could include:
1. Leadership takes the Do as I say, not as I do approach.
2. Middle management shuts employee communication down and discourages
employees from speaking up (even if leadership encourages it).
3. Employees feel like their efforts are wasted and nothing will ever change.
4. Financial goals are the ONLY things that matters and management usually has a I
dont care how it gets done just make it happen mentality.
5. An intentional and calculated compliance violation occurs. For example, giving/
receiving bribes to other businesses to make more money.

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 Think of culture as your
organizations personality

When an organization has a strong culture,

three things happen: employees know how top
management wants them to respond to any
situation, employees believe that the expected
response is the proper one, and employees know
that they will be rewarded for demonstrating
the organizations values.

- Society for Human Resource Management

A brands personality allows its ideal consumer to relate to it, which

increases a brands effectiveness, and overall equity. Having an
established personality for a brand starts to create a framework that
helps the holistic organization shape the way they feel about it.
A personification of a brand provides insight into the most effective ways
to communicate with a target audience says Wagner dos Santos, a
managing partner at Wagner. Bridging the gap between consumers and
brands requires a level of sensitivity and respect that goes beyond
traditional thinking.
Meghan Biro, a Forbes contributor, put it best when she said that due to
the saturated social media culture we live in, brands are now allowed to
build emotional connections with their customers. Wed like to take this
further and say it also extends to a companys employees.
Thanks to social media, we have an increased intimacy with brands.

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Brand humanization means opening up your company and culture, and
inviting customers in, says Biro. So you have to know who you are, you
have to have a brand identity that is consistent yet allows employees
room to express themselves.

H ave you ever thought about your brand as if it was a person? A great
exercise to personify your brand starts with describing how the
brand would think and feel.

When you allow yourself to take a step back, you can identify a brands
personality traits more clearly and understand the impression it makes
on those who interact with it.

This is an important aspect of culture knowing it on a deeper level, what

makes it tick, and what, ultimately, what allows employees and consumers
relate to it.

Carolyn Loomis, a marketing communications expert and writer for MarketingProfs

outlines the steps needed to be taken to identify a brands personality.
The process, she says, begins with:
1. Would your brand be a male or female?
2. Is he or she street-smart or book-smart?
3. Is he or she social or an introvert?
4. Does he or she have compassion or is he or she an authoritarian?
5. Would you trust this person?
Questions should be about personality traits, says Loomis. Dont just look for positive
traits; thats not the point of the exercise. Like all people, your brand will be flawed. Dig into
[his or her] flaws and embrace them. If, for example, you often fall behind on deliverables,
how would that reflect in your brands personality?
Evaluating the company from this perspective will broaden your understanding of its
intricacies and nuances, allow you to work its personality traits into everyday discussions
and lay the strategic groundwork for establishing a world-class corporate culture.
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 Practice a
Human-to-Human Approach

E xperts say that having a strong corporate culture can account for
20-30 percent of a companys core differentiator. Dont risk
becoming culturally unremarkable. Take the time to stand back, assess,
and adjust accordingly so 2018 and beyond is set up for success.
Throughout these processes of standing up and sustaining a healthy
culture, dont forget your people. Each step along the way, ensure
youre checking-in with those inside the organization on how theyre
receiving the culture changes through consistent feedback sessions.
If you forget about your people, you can forget about your culture;
perks and money have their limits in inspiring true commitment, says
Forbes contributor William Arruda. Business is a truly human
endeavor, and having a positive workplace culture makes for happier
employees. Happy employees will have a profound impact on your
companys success.
The human element should not only be carried throughout your
companys strategic mission, but be the linchpin for modern business
growth and cultivation of a healthy and influential culture for others
with bruised cultures to look up to.
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