September 4, 2006

"IMPLEMENTING BUSINESS ETHICS"

We hear a lot these days about the deterioration of ethics in business, e.g., graft, corruption, cheating, favoritism, skimming money, etc. This has resulted in a public relations nightmare for business. If consumers do not trust a company, its a matter of time before it goes out of business. This is supported by recent studies that give evidence there is a correlation between business performance and ethical practices (see the Institute of Business Ethics).

Basically, the Institute's study suggests there are long-term benefits associated with enacting an ethics programs. Such studies and recent corporate snafus (e.g., Enron) are impetus for companies coming to grips with ethics in the workplace.

There are essentially two considerations for devising an ethics program in business; first, knowing what your ethics are, and, second; implementing them in a consistent manner.

INTERPRETING ETHICS

There is little point in my telling you what is ethically right or wrong. You already have an interpretation of this. But let us understand what influences our interpretation of ethics; our interpersonal relations with others, such as our family, friends, neighbors, fellow workers, as well as the media. Ethics is learned more than it is taught. It is based on observations of the conduct of others, people we like and respect as opposed to those we do not. It is then up to each of us to interpret these perceptions from which we will base our conduct and behavior. The point is, we act on our perceptions, however accurate or inaccurate they may be. Another influential factor are our own human frailties of competitiveness, love, greed and ambition. But then again, this goes back to interpersonal relations.

Let us recognize that ethical behavior is interpreted differently from person to person. What one person may consider right or wrong may be different for the next person. The objective in business is to implement a uniform form of behavior thereby instilling consumer confidence in a company overall.

IMPLEMENTATION

Writing a corporate code of conduct is in vogue today as a means of articulating the ethics of a business. Such codes are proudly displayed on web sites and in corporate brochures more for public relations than anything else. True, they are useful for disciplining an employee for an infraction of the rules, but I do not see them as an effective way of implementing an ethics program. Understand this, regardless of what the code of conduct states, the ethics of a business are whatever the top-dog says they are. Too often I have seen companies say one thing, then act another, e.g., Enron.

Printed codes of conduct are nice, but we have to recognize that it is one thing to enact legislation, quite another to enforce it. As stated earlier, ethical behavior is based on observations. Regardless of what a code of conduct says in print, ethical behavior is based on the relationship of superior and subordinate worker relationships. If a subordinate observes an indiscretion by his superior, in all likelihood it will be emulated by the subordinate. This phenomenon occurs top-down in the whole corporate chain of command. If it breaks down anywhere in the corporate hierarchy, it will become visible to the subordinate layers and potentially create a "trickle-down" effect. This means the boss has to be a role model for ethical behavior; they must "walk-the-walk" as well as "talk-the-talk." If they do not, it will not go unobserved by their subordinates. Managers, therefore, should avoid the "do as I say, not do as I do" phenomenon. They must lead by example. Anything less is sheer hypocrisy and will inevitably lead to changes in behavior.

It is simply not sufficient to issue platitudes as to what is and what isn't ethical behavior. The manager must follow-up and assure ethical behavior is implemented accordingly. In other words, we shouldn't just "desire" truth and honesty, we must "demand" it. If one person gets away with an indiscretion, others will surely follow. As such, when writing out a code of conduct, be sure to stipulate the penalties for its violation.

The success of a business ethics program is ultimately measured by how well it becomes ingrained in the corporate culture. As we have discussed in the past, corporate culture pertains to the identity and personality of the enterprise. All companies have a culture; a way they behave and operate. They may be organized and disciplined or chaotic and unstructured. Either way, this is the culture which the enterprise has elected to adopt. What is important is that in order for an employee to function and succeed, they must be able to recognize, accept and adapt to the culture. If they do not, they will be rejected (people will not work with them).

The intuitive manager understands the corporate culture and how to manipulate it. Changing the Corporate Culture involves influencing the three elements of the culture: its Customs, Philosophy and Society. This is not a simple task. It must be remembered that culture is learned. As such, it can be taught and enforced. For example, a code of conduct is useful for teaching, as is a system of rewards and penalties. Designating people to act as watchdogs of the culture can also be useful, but be careful not to create a climate of paranoia. Ultimately, as a manager, you want to create a culture that promotes the ethical behavior you desire.

For more information on "Corporate Culture," click HERE.

CONCLUSION

We now live in strange socioeconomic times. 40-50 years ago we normally had one parent staying home to raise the kids. Now it is commonplace to find families where both the husband and wife are working and paying less attention to their children, thereby relegating their parenting duties to teachers and coaches. In other words, the family unit, which is the basic building block for learning ethical behavior, is becoming severely hampered.

In business today we have a "fast-track" competitive mentality which does not encourage a spirit of teamwork but, rather, more rugged individualism. Nor does it promote employee loyalty. Further, we now live in a society that encourages people to go into debt, thereby causing financial tensions.

Bottom-line, ethics is about people and trust. Consequently, we should be sharpening our people skills as opposed to avoiding it. We don't need more maxims of how we should conduct our lives; we need to lead by example. As such, we need more role-models and heroes than we do paperwork.

Let me close with one last thought on how ethics impacts business; there is probably nothing worse in business than being caught in a lie, particularly by a customer. Any trust that there may have been before disintegrates immediately and business is lost. In this day and age, there is something refreshingly honorable about a person where their word is their bond. Ethics just makes good business sense.

OUR BRYCE'S LAW OF THE WEEK therefore is...
"The ethics of a business are whatever the top-dog says they are."

"BRYCE MANAGEMENT ANALYSIS" SERVICE INTRODUCED

We've just introduced a new free service for managers to perform a self-analysis of their style of management, including leadership and corporate culture. Check it out at:

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IN OUR "DOWN THE ROAD" SECTION

The Information Week 500 Conference and Gala Awards will be held September 10th-13th at the Westin Mission Hills Resort and Spa in Rancho Mirage, California. For information, contact 877/449-5289.

The British Academy of Management will be holding their 2006 Conference at The Waterfront Hall and Hilton Hotel, in Belfast, Northern Ireland on September 12th-14th. For information, contact Clare Saunders in their London office at +44 (0)20-7383-7770 or visit their web page at: http://bam.ac.uk/

The Society for Information Management will be holding their SIMposium 2006 on September 17-20 at the Fairmont Hotel in Dallas, Texas. For information, contact SIM headquarters in Chicago at 312/527-6734

Verify 2006, the International Software Test Conference, will be held October 10th-11th in Washington, DC at the Crown Plaza Hotel Crystal City. For information, call 703/725-3051.

The International Institute of Business Analysis will be holding their World Congress for Business Analysts (in conjunction with ProjectWorld 2006) on November 6th-9th at the Caribe Royale Hotel in Orlando, FL. For information, call 212/661-3500 x 3702 or visit their web site at: www.iirusa.com/baw

If you have got an upcoming IRM related event you want mentioned, please e-mail the date, time and location of the event to timb001@phmainstreet.com

NEW eBOOK: THE BRYCE IS RIGHT!

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Charles Cole of Lyndhurst, OH, said it is a "Very interesting book. Good work! It reminds me of some of the early works I read by W. Edwards Deming. Too bad the American corporate gurus of his day didn't pay him heed."

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While there, look for our new MS PowerPoint presentation describing both the book and the training program.

MY "PET PEEVE OF THE WEEK" IS THE "IBM SYSTEMS JOURNAL"

I just received the July/September issue of the IBM Systems Journal in the mail. We've been receiving it for years now. For those of you unaware of it, it is a publication produced by IBM and is primarily intended for computer scientists. Thank God, as I don't see how it has any applicability to the business world. Basically, it consists of a series of research papers by IBM scientists on a variety of technical issues. Although IBM claims it is a research document, in reality, it is a thinly disguised promotional program for IBM products. Each issue has a theme and this issue touted "Model-Driven Software Development" which I don't have a problem with offhand. What perked my interest though were a couple of papers which discussed systems development, not just software. Frankly, they were off the mark. IBM never has had a true grasp of what an information system is, I'm now dating back to BSP and AD/Cycle which were also veiled attempts to push IBM products. To IBM's way of thinking, a system is not a system unless a computer is involved, preferably theirs. The idea of manually implemented systems still eludes them.

Their other papers on software development were okay and hyped the products from their Rational Software division, but there sure was a heck of a lot of gobbledygook you had to wade through before the authors got to the point. It would be nice if they included an executive summary of a couple of pages to highlight the points they want to make as opposed to forcing us to read through all the technical jargon, but I guess that would be too logical.

Such is my Pet Peeve of the Week.

FRAPPER MAP

Friends, I don't know if you've seen it yet, but we've added a Frapper map to the "Management Visions" web site. Frapper is a free mapping service offered by the folks at Rising Concepts, LLC, and allows you to plot yourself on a worldwide map. This is a great way to keep track of our listeners and I encourage you to try it out through our web page or by clicking HERE.

AND FINALLY...

I received an e-mail from a Kurt David in Cincinnati who wrote me regarding last week's essay entitled, "Reinventing Business Processes"
Kurt writes:

"Your approch to business process design sounds old fashioned."

Thanks Kurt for your note,

Well maybe, but you know what? It works. Fortunately, we have always been consistent with our terminology and concepts and the fact that people are still talking about Business Processes means we must have been on to something all along. As I indicated in my essay, Business Process design represents the missing layer which people have overlooked for many years. Some people believe Information Systems are nothing more than a suite of programs; we don't. Under "PRIDE," an information system is a collection of business processes (which we call sub-systems) that can subdivided into procedures, both manual and computer. It is here were the "work flow" and "data flow" of the sub-system are designed. By doing so, we can give better specifications to the programmers for the Software Engineering phases of the methodology. So, is "PRIDE" old-fashioned? Maybe. But like I said, it works.

Again, Thanks for your e-mail. Keep those cards and letters coming.

MBA is an international management consulting firm specializing in Information Resource Management. We offer training, consulting, and writing services in the areas of Enterprise Engineering, Systems Engineering, Data Base Engineering, Project Management, Methodologies and Repositories. For information, call us at 727/786-4567. For a complete listing of my essays, see the "PRIDE" Special Subject Bulletins section of our corporate web site.

Our corporate web page is at:

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Management Visions is a presentation of M. Bryce & Associates, a division of M&JB Investment Company of Palm Harbor, Florida, USA. The program is produced on a weekly basis and updated on Sundays. It is available in versions for RealPlayer, Microsoft Media Player, and MP3 suitable for Podcasting. See our web site for details. You'll find our broadcast listed in several Podcast and Internet Search engines, as well as Apples' iTunes.

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Copyright © 2006 by M&JB Investment Company of Palm Harbor, Florida, USA. All rights reserved. "PRIDE" is the registered trademark of M&JB Investment Company.

This is Tim Bryce reporting.

Since 1971: "Software for the finest computer - the Mind."

END