Who needs principles?

The economist Michael Friedman famously once said that the only duty of a ‘corporate’ was to maximise its return on investment but that this must be done within legal and social norms. It is interesting how many organisations struggle with the second part by failing to integrate ethical principles into their businesses and fail to understand the difference it can make to their performance and productivity.

You will know of the high profile organisations who have spectacularly failed in this area over the last couple of years….. for example, Michael Horn, CEO of Volkswagen US found it “hard to believe” how they could “screw up” their emissions testing regime; Sepp Blatter, FIFA President completely failed to embed FIFA’s official line about acting for the good of the game and the global football family into its culture; and Enron’s official corporate values of communication, respect, integrity and excellence all sounded good but we all know what happened!

So what can organisations do to ensure they do not fall into the same trap? I am afraid that too many organisations feel they can integrate ethical principles into their strategy through creating more rules, regulations and policies which in fact do not improve things. Others adopt the latest initiatives that may well be well-intentioned but will eventually fail because there are no foundations on which to build.

The answer is not easy to implement and the HR and OD functions have a big role to play. Instead of endless rules, regulations and processes the focus should be on encouraging staff to think through whether something feels right and what impact it would have within and outside of the organisation. This focuses individuals on engaging with the ethics of their actions rather than going through a tick box exercise. The change of culture on which this is based does not, of course, happen quickly. It must be based on an agreed set of organisational values that are locked into the business vision and strategy and managers at all levels that lead by what they do and what they say. Finally, this focus and change of culture must be followed through in the way it recruits and develops its future leaders.

Tony Williams, author and one of Ark People & Communities team of specialist consultants, has wide experience of strategic and organisational development (with a focus on people), HR and people strategies, change management, transformation, cultural integration, learning and development and training, all gained at executive director or director level in the UK in both the public and social housing sectors.

To find out more about Tony and other members of our team visit http://www.arkcommunities.co.uk/our-team or to find out how Ark People & Communities can support your organisation email jturley@arkconsultancy.co.uk