KJRSpeak: You can contract for services, but you can’t contract for heart.
Thanks for this, to my old friend Hank Childers.
KJRSpeak: You can contract for services, but you can’t contract for heart.
Thanks for this, to my old friend Hank Childers.
“Device giants shed integrity agreements” read the 9/27/2014 StarTribune business section headline.
As explained in the article, an integrity agreement is a signed commitment that a corporation will, while the agreement is in force, obey the law.
Temptation is, for us Sarcastics Anonymous members, so, so hard to avoid. After all, we natural persons have to obey the law even when we haven’t signed an integrity agreement.
But it turns out that while integrity agreements really are evidence corporations aren’t people, too, this isn’t why. U.S. government agencies make use of integrity agreements, not to give corporations an obligation to obey the law, but in recognition that just because its CEO and board of directors want a large corporation to do something, that doesn’t mean it will.
Integrity agreements specify that signing corporations will implement organizational structures and processes designed to ensure they do obey the law — a compliance officer and committee; written standards and policies; a comprehensive employee training program and so on.
They’re recognition that corporations are different from us “natural persons” in a deep and fundamental way. Our brains don’t need committees or organ training programs to get our bodies to do what they’re supposed to do.
A few billion years of evolution have resulted in systems that let the brain control things because for us natural persons our tissues and organs all share a common set of interests. More or less.
Anyway, unlike us the “organs” and “tissues” that make up a business … its departments and employees and please don’t push the metaphor! … have very different versions of what self-interest means. Reducing the gap is one of the most important responsibilities business leaders have, and reducing the extent to which employees and departments act on the gap that remains is one of the most difficult.
What’s the solution? Processes and organizational structures, according to the federal agencies that require integrity agreements. Were we to be unkind we might call it bureaucracy, or perhaps the Compliance Police.
Not that we should sneer. In the turn-executive-intent-into-organizational-action game, business pundits and consultants of all stripes tend to converge on these answers, usually adding metrics as a critical element.
And all of these, with the possible exception of metrics, are important. They just aren’t the lead story. But first, a few words about the futility of metrics, in the form of a question: How exactly might a corporation measure its current level of law-breaking?
Not the number of lawsuits, indictments or prosecutions. These measure the number of times the company got caught, and even there the metric will lag the infractions by years.
Internal Audit? It has its hands full looking for accounting irregularities.
We’re talking about something that’s difficult and expensive — choosing a random sample of decisions and actions in all parts and at all levels of the company and digging into them to see which ones fail to adhere to the letter and spirit of all relevant laws and regulations.
Good luck with that.
Which gets us to the lead story: Culture change. It’s the lead story for most business changes — your takeaway from this tale of superficial absurdity.
Culture change is usually relegated to business change management — a follow-on complement to business process change whose role is reducing resistance to the desired change, whatever it is.
Business leaders need to change their thinking on this (me too). Culture is “how we do things around here.” According to ethnoscience it’s “the learned behavior people exhibit in response to their environment,” as my anthropologically-educated business partner explained it to me.
It’s a set of unwritten, socially enforced rules that determine how executives, managers and employees make decisions and act on them. It’s the lead story for most change, or should be.
Some companies rely on controls. But controls mean the answer is always no until you can persuade the controls committee (the word is “governance”) to change the answer to yes.
Controls are why corporations are slower than entrepreneurships. They’re why “I’d rather ask for forgiveness than for permission.”
In a very real sense, controls exist to prevent the corporate culture from taking charge of things.
How sad is that?
But what’s the alternative? In the case of obeying the law, it’s to bake compliance into the corporate culture. This make compliance the lines painted on the pavement and not the guardrails at its margins.
Which do you prefer to rely on to keep your car on the road?