“Culture eats strategy for breakfast,” read a projected slide at Compliance Week’s 2023 National Conference—a nod to renowned management consultant Peter Drucker, who coined the expression.
Corporate culture might be commonly considered “cute” and “fuzzy,” but it is a slippery monster, nonetheless. It holds the potential to wreak havoc on a negligent organization that fails to nurture it. While most organizations readily agree culture matters, too often companies punt on it in practice because it is elusive and not metric-friendly.
Not so, refuted a trio of panelists during a session entitled “How to Operationalize ‘Company Culture’ Through Compliance” at CW’s event in Washington, D.C. The experts served an audience of compliance practitioners with a framework and strategy for embedding ethical culture into organizations. They also zeroed in on which piece of organizational culture compliance explicitly owns, falling in the realm of workplace investigations.
“How a company deals with misconduct and employee complaints—and that’s a big piece of what [compliance] owns—is where the rubber hits the road for company culture because it has a huge impact on the employee experience. This is where you meet employees at their most vulnerable. You have their emotional and mental health well-being in your hands,” said Rebecca Speer, attorney, investigator, and founder of Speer Associates.
The panelists defined three aspects of company culture that shape the employee experience: behavioral norms, ethical decision-making, and organizational justice. How employees interact with their team, whether they opt to do the right thing across different contexts, and how they feel the organization treats them when they vocalize a problem determine their relationship with company culture.
That relationship is symbiotic; the experiences inform what employees both give to the culture and take away from it.
“Oftentimes, as a team, I felt like we forgot we were either building or eroding the culture every time somebody had an experience with us,” said Kim Yapchai, former chief environmental, social, and governance officer of automotive components manufacturer Tenneco, which CW awarded Compliance Program of the Year at its 2021 Excellence in Compliance Awards.
“That word-of-mouth experience they were having and sharing is so powerful,” said Yapchai, who cited research indicating word of mouth is seven times more powerful than posters, policies, or internal communications.
Junna Ro, former general counsel and compliance officer of auto insurtech company Metromile, urged audience members to consider their compliance programs through the lens of brand management, using the program’s malleable reputation as a mechanism to drive a compliance culture organizationally.
“Have you ever thought about managing your reputation as a body that addresses issues for the company?” Ro asked the audience. “I invite you to think about [compliance’s reputation] just a little differently because it can really change your perspective on the importance of the function and people’s perception of that experience.”
To Ro’s point, Speer suggested building a positive brand by internally advertising the team’s approachability and values-driven focus—for example, through a team website.
“I have clients who have a whole web page with their investigative team members’ bios, and they say, ‘We’re here for you. We’re solving problems. This is who we are. We are here to help you,’” said Speer, who counsels Fortune 500 companies on how to implement systems for preventing and managing workplace misconduct.
Speer offered four additional strategies for upleveling an organization’s employee complaint mechanism:
- Shift your mindset. Investigations are not strictly about legal risk mitigation; more constructively, they are about problem-solving.
- Commit to unassailable objectivity and independence. To win over the culture skeptics in the company, it is critical to conduct quality investigations that “speak truth to power,” despite any political pressures in the organization, said Speer.
- Be transparent. Communicating clearly what steps are being taken in an investigation and what the path forward will be underscores accountability and inspires trust.
- Focus on restorative work. Some mistakes are teachable moments rather than cause for termination. Working with offenders to take responsibility for their misconduct through added training teaches employees that while consequences are upheld, compliance is also working to foster a growth environment.
“If employees feel there is organizational justice—fairness, accountability, and consistency—they’re going to be more likely to report problems,” said Speer.
To measure culture across the enterprise, the panelists recommended conducting surveys, potentially in partnership with human resources, to illuminate broad trends and isolated microcultures. High-level survey results provide a baseline for goal setting and keep organizational leaders honest and accountable to tangible objectives for improvement. Moreover, the bird’s-eye view of the results offers compliance leaders an opportunity to triage cultural “hot spots” on site, said Ro.
Ro, who previously served as chief ethics and compliance officer of CSAA Insurance Group, a AAA insurer, added her ethics and compliance team there carried out focus group discussions based on survey results, prioritizing red-flagged locations first. Her team spoke with people managers and employees—separately and confidentially—to gain a better understanding of why they felt they could not report misconduct.
“Getting that feedback is so helpful because it adds color to the survey results in a way you wouldn’t get otherwise,” said Ro, “and then, you’re also putting a face to the name of the compliance function and showing them you care enough to come in person and to take action.”
