Assessing organizational culture should be a top priority in 2018 for businesses of all sizes.
Creating a healthy culture is as vital to an organization as having a healthy body is to overall well-being. Ignoring, overlooking, or neglecting to conduct regular organizational culture assessments leaves a company’s future at risk.
Simply put, a strong ethical culture matters.
Now is the perfect time of year to start laying the groundwork for your 2018 strategy, and including compliance and ethics in your plan will set your company up well for a prosperous year. Conducting a comprehensive culture assessment is one the first steps in building an effective program.
However, before creating any kind of assessment to send to employees, learning the importance of these kinds of feedback mechanisms is critical. When you do send a questionnaire or conduct an assessment of your organization’s current culture state, it needs to be executed flawlessly if you want it the data to be useful.
Take the first step and educate yourself about why culture assessments are often the bedrock of effective compliance programs.
Not only is having a strong corporate culture a key ingredient in a world-class ethics and compliance program, according to Deloitte, but it fosters the attraction of top talent, sustainable growth, favorable reputations, and long-term success.
Yet, despite proven returns and positive employee benefits, an ethical culture is more often overlooked or not credited as a tangible business objective.
“Regulators around the globe are increasingly calling on organizations to examine their cultures,” says Erica Salmon Byrne, Executive Vice President, Governance and Compliance at The Ethisphere Institute. “From Enron to Volkswagen, the Challenger to WorldCom, there are multiple examples of organizations with formal systems that say one thing and cultures that promote another. When those kinds of alignment gaps are allowed to persist, you eventually have a failure of one variety or another: ethics, quality, safety or a combination of all three.”
Building a Culture of Compliance and Why It Is Needed
Creating a compliance culture starts by committing to a high level of transparency from the leadership level down to the most junior employees. Without a top-down approach, perception and reality that everyone is responsible for managing risk will get lost. The culture will then reflect that attitude accordingly.
“There is no doubt that whatever ethical example (tone) top management sets, it has a trickle-down effect on the rest of the employees in the [organization],” says Cuthbert Chiduku CFE, Manager of Fraud Risk Management at KPMG. “If the tone set by top managers promotes ethical [behaviors] and integrity, employees will be more inclined to hold the same values.”
Not only do exemplary cultures encourage employee productivity and contribute to high morale due to their inherent benefits such as safety, open communication, and organizational accountability, they also create a level-setting benchmark for others companies to follow.
When employees feel the company makes decisions in their best interest, they feel a sense of appreciation and value. And with employee happiness being one of the biggest contributors of sustaining a culture of trust, it’s essential that employees consistently feel acknowledged and lines of communication remain open at every organizational level as much as possible.
Some recent findings back this up as well. A survey conducted by Globoforce found that 86 percent of employees who were positively recognized reported they trust their boss. Without this kind of recognition, employees trust in their boss drops to 48 percent, the same study found.
The kind of culture employee trust implicitly contributes to creates a very alluring competitive differentiator, which is a magnet for attracting and retaining employees, according to Globoforce’s CEO Eric Mosley.
“This ideal culture puts people first and is predicated on all of the metrics listed above: humanity, happiness, and trust,” says Mosley. “Without these characteristics, companies will find themselves at a disadvantage, as culture reminds employees of their worth as individuals and makes them feel more committed to a company.”
Importance of Ethical Culture in an Organization
To learn more about the importance of having an ethically strong culture in your organization, download a copy of How to Gain Company-Wide Insights With Culture Assessments. Gaining a holistic view is best done through administering a thorough culture assessment. The findings will serve as a data set to work from for improvement (if needed) and will provide support for culture-related decisions. The guide will highlight why culture assessments are worth the effort.
Knowing the ethical culture that your company operates in is critical for reducing avoidable fines, decreases risk and vulnerability, and improves your reputation while positively influencing the bottom line.