As most compliance practitioners know, the Department of Justice’s (DOJ) Evaluation of Corporate Compliance Programs, 2019 Guidance, concentrated focus on culture in a way the DOJ has not done previously. This concentrated focus on culture has led many compliance professionals to consider this with both renewed vigor and using different lenses to view culture. I was therefore interested in a recent Harvard Business Review (HBR) article, entitled “The New Analytics of Culture”, by Matthew Corritore, Amir Goldberg and Sameer B. Srivastava.
The DOJ hit upon the key indicia that a business’s culture can catalyze or undermine success around doing business ethically and in compliance. The authors believe, “the tools available for measuring it—namely, employee surveys and questionnaires—have significant shortcomings. Employee self-reports are often unreliable. The values and beliefs that people say are important to them, for example, are often not reflected in how they actually behave. Moreover, surveys provide static, or at best episodic, snapshots of organizations that are constantly evolving.”
What they have done is to derive some new ways to measure culture that have significant implications for the compliance professional. The authors focused their research “on a new method for assessing and measuring organizational culture. We used big-data processing to mine the ubiquitous “digital traces” of culture in electronic communications, such as emails, Slack messages, and Glassdoor reviews. By studying the language employees use in these communications, we can measure how culture actually influences their thoughts and behavior at work.”
They did this in several ways. In one study, they assessed “the degree of cultural fit between employees and their colleagues on the basis of similarity of linguistic style expressed in internal email messages”. In another study, they looked at “the content of Slack messages exchanged among members of nearly 120 software development teams.” This allowed a review of “the diversity of thoughts, ideas, and meaning expressed by team members and then measured whether it was beneficial or detrimental to team performance.” Finally, another approach was to see how employees talked about the company’s culture “in anonymous reviews to examine the effects of cultural diversity on organizational efficiency and innovation.”
Cultural Fit v. Cultural Adaptability
One key finding was cultural adaptability. In other words, could a new hire adapt to the culture within the organization? Typically, cultural fit can lead to more bonuses and promotions but, more interestingly, the authors found “Cultural adaptability, however, turned out to be even more important for success. Employees who could quickly adapt to cultural norms as they changed over time were more successful than employees who exhibited high cultural fit when first hired. These cultural “adapters” were better able to maintain fit when cultural norms changed or evolved, which is common in organizations operating in fast-moving, dynamic environments.”
This is important as it demonstrates that if an organization continues to adapt to rapidly changing markets, such as those typically found within a large US multi-national company, employees with strong ethical standards would be able to move more seamlessly to do business ethically and in compliance with the Code of Conduct, compliance policies and procedures and other norms found within most corporate compliance regimes. This also has significance for employees who cannot adapt to a culture of compliance as they would become anomalies and could be candidates for termination. The same would hold true for employees who left voluntarily. Those who “drifted out of step later on and were likely to leave once they became cultural outsiders in terms of ethics and compliance.”
These findings and others lead to some interesting considerations for the compliance professional. Perhaps, most obviously, hiring candidates whose core values and beliefs about a desirable workplace ethics and compliance culture should align well with those of current employees (fit). However, candidates who demonstrate cultural adaptability may be better able to adjust to the inevitable changes that occur as “organizations navigate increasingly dynamic markets and an evolving workforce” (adaptability).
However, cultural diversity is also something which comes naturally in a multi-national organization. This means Chief Compliance Officers (CCOs), compliance professionals and indeed compliance functions should be mindful that diverse perspectives in teams across global multi-national teams be managed. If there are diverse perspectives on what is an ethical culture, it can quickly become a liability when the team needs to focus on execution and meet looming deadlines. It is during these times that team members have to unify around a common interpretation of what is an ethical culture and implement that standard going forward. CCOs and compliance professionals must be adept at “switching back and forth, learning when and how to promote the expression of divergent opinions and meanings and when to create a context for convergence”, particularly around doing business ethically and in compliance.
Finally, CCOs and compliance professionals must work to foster an ethical culture that is both diverse and consensual. The authors believe, “Such a culture is composed of multicultural employees who each subscribe to a variety of norms and beliefs about how to do work. These diverse ideas help employees excel at complex tasks, such as dreaming up the next groundbreaking innovation.” My experience is there is always a way to do business ethically and in compliance with anti-corruption laws such as the Foreign Corrupt Practices Act (FCPA). You, as a CCO or compliance professional, should instill an ethical culture that is also consensual so “employees agree on a common set of cultural norms—shared understandings—that helps them successfully coordinate with one another.” Senior management can signal the importance of doing business through an ethical culture “during onboarding and in everyday interactions.”
I found this article presented different approaches to not only measure and assess culture but also ways to improve culture. You should consider them for your organization.
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