All Posts in Policies and Procedures

|In: Business Ethics|Last Updated:

“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?

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|In: Industry Commentary|Last Updated:

From now on, nobody is allowed to say:

“It’s really very simple.”

No. It’s not. I don’t care what the subject is — ethics, the cloud, implementing business strategy, system administration, or Mideast policy. If you think it’s simple, it just means you don’t know enough about the subject to understand how complicated it is.

“Do the right thing.”

Weren’t you listening? Ethics isn’t simple. What you think the right thing to do is just might not match what I think the right thing is to do.

Example: You have two employees. One has been the annual winner of the Mother Theresa act-alike contest five years running but codes so slowly the company’s business strategy will change twice before her modules pass UAT. The other writes perfect code that makes business users ecstatic as if he was taking dictation, but was runner-up in last year’s Worst Person Alive competition, in part because of his personal blog, Kicking Spaniels When Nobody’s Looking.

You have to downsize by one. Which one goes? You’re certain that’s the right thing to do? Really?

“Best practice.”

If you use this phrase you haven’t read the KJR Manifesto. Time you did.

In the meantime, please stop asking me to assess your business processes as compared to best practices.

Look. If there was such a thing as best practice, you could just buy a copy of Best Possible Process Designs and tell your process managers to organize work this way.

Take a process. Any process. On paper, sketch out how you’d organize it to maximize throughput. Now, on a different sheet of paper, sketch out how you’d organize it to minimize your capital investment and fixed operating costs.

If they look anything alike, you’re either a genius at process design or you know nothing about the nature of optimization.

There are no best practices. Only practices that fit best.

“You know what I think?”

There are only two possible answers to this question, yes and no. If I answer no, you’ll tell me, and your opinion will probably start, “It’s really very simple.”

So my safe answer is yes, which could only be honest if you’ve already explained your thinking about whatever subject it is. If you have, there are only two possibilities: I remember, or I don’t. If I do, you don’t have to explain it again. If I don’t, I obviously didn’t think it was worth remembering last time.

What makes you think repetition will make me change my mind?

“That’s how I was raised.”

Oh, so you’re blaming your parents? You are, by now, presumably an adult. Take responsibility for your opinions, please. Also your moral code and your choice of religion. If, as an adult, you continue to blindly follow whatever instructions your parents gave you as a child, I doubt you’re interesting enough to pay attention to as an adult.

You probably were a boring child too, for that matter. But I don’t blame you. That’s how you were raised.

“I’m the kind of person who …”

Stop right there, please, because I’m the kind of person who divides all of humanity into two kinds of people, those who divide the world into two kinds of people and those who don’t.

Now … what category of humanity were you saying you belong to? And please tell me, assuming I care what sort of person you are, why would you think I’d find your assertions about yourself to be credible?

If I want to know what kind of person you are, I’ll ask you for references.

Or else I’ll pay attention to what you actually do.

“Crowd.”

As in, the “pro-choice crowd.” Or the “gun rights crowd.” Or the any-position-someone-wants-to-disparage crowd.

“Crowd” is a handy way to sway an audience to your cause when you have no actual evidence or logic to present, right up there with “some” (“Some will tell you the earth is round.”) and the ever-popular “them” as ways to dehumanize those who disagree with you.

“There’s a reason we have rules.”

Yes, there is a reason for every rule we have. And wouldn’t it be lovely if everyone who blindly enforces rules kept those reasons in mind instead?

See, rules are blunt instruments. More often than not they fit the circumstances, but there are times they don’t. We call those times “exceptions.” If you don’t believe in exceptions, you’re clearly the kind of person who prefers memorization to thinking.

“Fuhgettaboutit.”

I actually saw this not long ago, but thankfully its use has declined since the Sopranos left the air. Consider it a placeholder for every trendy phrase writers toss into their prose on the theory that borrowed wit is still witty.

It isn’t.

Some things really are very simple.

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