The Manufacturing Executive
The Manufacturing Executive

Episode · 1 week ago

It’s Time to Get Serious About Ethics & Compliance w/ Emily Miner

ABOUT THIS EPISODE

When it comes to improving your company's ethics and compliance…

Any changes you make will only be as good as the culture supporting them.

And today’s guest, Emily Miner, Senior Advisor in LRN ’s Ethics & Compliance Advisory Practice, joins the show to share the best ways to cultivate that culture.

We discuss:

  • The evolution of E&C
  • Why ethics and compliance and organizational culture are inextricably linked
  • The importance of understanding the differences in the experience of culture for various individuals across your company 

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But really all comes back down to, you know, how how can we, as ethics and finance professional, helpto protect our organization by fostering a strong ethical culture and, you know, seeking to prevent and detect this conduct? Welcome to the manufacturing executive podcast,where we explore the strategies and experiences that are driving midsize manufacturers forward.Here you'll discover new insights from passionate manufacturing leaders who have compelling stories to shareabout their successes and struggles, and you'll learn from B tob sales and marketingexperts about how to apply actionable business development strategies inside your business. Let's getinto the show. Welcome to another episode of the Manufacturing Executive podcast. I'mJoe Sullivan, your host and a CO founder of the Industrial Marketing Agency guerrillaseventy six. Ethics and compliance. It's one of those topics that doesn't seemto be talked about as much as it should. For many organizations, thisis about having some HR policies in place to check off boxes and maybe protectthe company in case of a lawsuit somewhere along the way. But my guesttoday will tell you there's a heck of a lot more to this practice ofethics and compliance. Shall also tell you why those manufacturers who take it seriouslynot only have happier and emloyees and work cultures, but a serious competitive advantage. Let me introduce her. Emily Miner is a senior advisor in lrn's ethicsand compliance advisory practice. She counsels executive leadership teams and how to actively shapeand manage their ethical culture through deep quantitative and qualitative understanding and engagement. Askilled facilitator, emily emphasizes co creative, bottom up and data driven approaches tofoster ethical behavior and inform program strategy. Emily has led engagements with organizations inthe healthcare, technology, manufacturing, energy, utilities, professional services and education industries, as well as education, nonprofit and inner government governmental agencies. EmilyCo leads lrn's ongoing flagship research on EANC program effectiveness and is a thought leaderin the areas of organizational culture, leadership and EANC program impact. Prior tojoining Lrn, Emily applied her beave behavioral science expertise in the environmental sustainability sector. Working with nonprofits and several New England municipalities, facilitated Earth to science researchin academia and contributed to drafting and advancing international climate policy goals. Emily hasa master of public administration and Environmental Science and policy from Columbia University and graduatedSumma cum laude from the University of Florida with a degree in anthrop aology.Emily, welcome to the show. Thanks for having me. You bet well, emily. Can you start by telling us what ethics and compliance, orEANC as we've called it here, is all about as a practice? Yeah, ethics and compliance, or EANC, as we said, as a corporatefunction, is essentially about protecting a company's reputation and brand, which it reallydoes kind of in two ways, by fostering and ethical culture and seeking toprevent and detect violations of the law, so that the how of that,like the actual tools and leavers that that ethics and compliance professionals have at theirdisposal. It's really quite expansive and it's going to vary depending on the organizationand your industry, your size, whether your public and private. But Lan, we often think about a fix and compliance as inspiring, guiding and enablingvalues spaceed behavior. So I think some compliance in terms of inspiring sidy spacebehavior. That's really through codifying and communicating...

...and organization's higher purpose, their values, their commitment to ethical behavior, responsible business practices, setting that tone fromthe top and, you know, in so doing, inspiring employees to liveup to that purpose, to live up to that potential. From a guideand perspective, it's how. So we have our values, but how dowe actually live them like? How does that breakdown and connect to me andwhat I do in my role? Why is that important to our business,to the community in which we operate, the customers that we serve, etcetera, and guiding employees around what's expected of them, how to identify risks thatthey might be exposed to and what to do if they are confronted by thoserisks. So this guidance element is typically achieved through education and training and communicationsand having policies and a code of conduct, those resources for employees. And thenthe final leg of the stool, or what have you, his aroundenabling value space behavior and ethics and compliance. Can do that by establishing the appropriateprocedures and structures and controls, being a resource to the business, beinga resource to employees if they need help, and creating mechanisms for people to speakup and voice their concern the pretty expensive remitt but really all comes backdown to how can we, as ethics and compliance professionals, help to protectour organization by fostering a strong ethical culture and seeking to prevent and detect misconduct? What are your observations about how the practice of EGANC is evolved over,say, the past decade, and are there any examples you could provide toillustrate that? Yeah, I think the evolution of Ethixing compliants has been reallyfascinating. When you think about what your standard corporate functions finance charts that areethics and compliance is actually one of the newer corporate functions and it's gone throughquite an evolution back from when the discipline first came on the scene, whichwas going back more than a decade back to end run. But thinking aboutthe past ten years or so, ethics and compliants have gotten much more sophisticatedand thinking about its role within an organization. It used to be sort of moreof a techlist approach maybe ten years ago so. To have a codeof conduct check, do you have some form of training? Check, doyou have a hotline? Check and that was enough was just to kind ofgo down and say, okay, I have all of these program elements nowaffixing compliants, professionals, organizations, regulators. They're really moving beyond that and seekingto understand whether or not all of those program elements are actually having animpact. Are they inspiring, guiding and enabling value spased behavior? Are theyinforming how people are behaving in making decisions on a day today basis, which, to put another way, is what is our culture? And there's there'sa wreck cognition that you can have the best speak up program in the wholeworld, with the best hot line and all of that, but if youdon't have the right culture underneath to support that, it's not going to beeffective. No one will use it, and we we've actually seen this ina lot of the corporate scandals that make the headlines. So if you thinkabout all stargo or Boeing, Goldman, stack, specific guests and Electar,I mean you can kind of go go down the list of the major corporatescandals. All of those companies that I mentioned, they had sophisticated ethics andcompliance programs on paper and they actually had people that use the established channels toraise their concerns, but the culture,...

...how things really worked around there arethe messages that were being sent or what was really important? That was thecomplete opposite, and so they got into those situation that they got into.So checklists are fine and it is important to have all of those components ofa program but the emphasis nowadays is much more on whether those programs working practice. I think a good example is looking at organizational policies. So they usedto be written by lawyers for lawyers. It was very much like a cyaapproach to protecting the company or saying well, this employees find the Scienti statement thatthey read the policy. So therefore we as an organization, we're inthat we can't be held liable. That no longer really appropriate anymore. Sothe emphasis now is on our your policies simple or the easy to understand?What you know, grade level or they are they written that? Are theytranslated to reflect your global footprint, which, believe it or not, sort ofseems like obvious that organizations should do that, but many of them don't, and so that's just an example of how a programmatic element has evolved overtime and kind of another mark of the evolution that I find really fascinating isif you look at the titles of people that hold senior ethics and compliance positions. In the beginning it was that you were the chief compliance officer, andthen it's chief compliance and ethics officer, then it's chief ethics and compliance officer. So what's putting ethics sort of above compliance or first? And then nowwe see a lot that are just chief ethics officers or chief integrity officers,and I think looking at how the titles of this role has changed over timeis will also an indication of what companies are realizing is important. So it'snot about it's not just about compliance with rules. Of course it is that, but beyond that it's about are we doing the ethical thing? Are wedoing the right thing? Sounds like there's more authenticity kind of beginning to takea route behind these programs that maybe we're once just there because they had tobe there to check the box. Uh, absolutely so. Emily, I knowthat you have led a massive study recently that was completed and published,the benchmark of ethical culture survey. Can you just talk about what this wasabout what you set out to learn with the study? Yeah, for thepast ten years or so, Ella Ren has periodically sought to understand the stateof organizational culture around the world, and its been a while since we haddone this. But with events of the past few years, the rise ofstakeholder capitalism, emphasis on social justice and equity, their climate crisis of coursecovid all of these everging forces, these these converging crises that are impacting andbeing impacted by business, it felt like the right time to ask this questionagain. So what is corporate culture? What does it mat up of?What does it look like? What does it do in organization and how doesthat vary around the world and across industries? And so we undertook a massive researcheffort, serving people in in companies around fourteen countries, multiple languages,seventeen industries, all organizational sizes, all role types, from your frontline contributorup to the CEO, and we got nearly ezero responses. That forms thebasis of the research that we published in the report that you just mentioned.Building on that, what were, if you had to look at some ofthe key findings, and in particular those that were related to the manufacturing sector, what stood out to you? There's...

...a lot. I'll maybe narrow itdown to the or all start with three, I think, as at a ata high level, something that was really exciting for us to see wasthis the degree to which culture impacts performance. And we looked at performance kind ofinto in two ways. We looked at ethical performance, so we're peoplebehaving ethically or, quote unquote, doing the right thing, particularly when theywere under pressure, which is when it's more difficult to do the right thing, and did people speak up about misconduct? So that was what we consider ethicalperformance. And then we also looked at business performance, and this is, your view, more traditional business metric, so financial results, customer satisfaction andploy loyalty, innovation and that are and we did advanced statistical modeling tolook at the various dimensions of Culture and how they interacted with each other andan influenced one another. And what we found was that a significant percentage ofthe variability in these two performance indicators, at the coal performance and business performance, a significant percentage of the variability in those indicators was attributed to the strengthof your culture, where if you were an organization with a what we wouldconsider a healthier ethical culture than that was correlated to much greater business results,much more indicies of employees speaking out about misconduct, making the right choice whenunder a touch situation, and just being able to see and quantify the impactof culture on these bottom line and risk mitigation metrics that are important to businessleaders was really exciting. and to kind of go deeper into some of this, we wanted to focus in on what conditions, what elements of culture,are most important when it comes to employees behaving ethically when under pressure, andwhat we found was that trust and organizational justice, which are two dimensions ofculture that we measured, they really had an outsize impact. and to focusin on how this plays out in the manufacturing industry, what we found wasthat this performance under pressure dimension was actually the lowest scoring for the manufacturing industry, and so it represents the biggest area of opportunity and our research and analysissuggest that if organizations want to move the needle on whether people are behaving asif they went under pressure, they're going to have the most impact by focusingon ensuring that there's a strong foundation of trust and that employees understand and haveconfidence in the organizational justice practices. And so I think that that's that's reallycompelling and we have a lot of examples and we share some case studies inthe report about exactly how organizations have gone about doing that. But I justthink it's helpful to kind of target like, if you have limited time and resources, which all of us do, what's going to have the most impact, and it's trust and organizational justice, and particularly so for the manufacturing industry. So it's my number to keep finding. And then the third is this theinsight that organizational culture is experienced differently depending on who you are and whereyou are in an organization. So whether that's your level of seniority or thetype of role you have. So again kind of bringing it down home tothe manufacturing industry, are you an office employee or production employee? And there'sa fairly well established phenomena called the leadership disconnect where the more senior you areand our organization, the more positive view or outlook you have on the cultureof your company, and we saw that playing out in our data. Butwe also fall that being replicated by this...

...role Tipe of whether you were anoffice employee or whether you were production for employee, where office employees by andlarge had a much more favorable view of their organization's culture than production level employees. And when we think about how the pandemic, how Covid has reshaped ourworlds and destructed our worlds and how important frontline people are, whether that's ourfrontline healthcare workers or teachers or the people that are packaging the things that we'rebuying online because we're not shopping inside stores or working in our utilities to keepthe life on, or all of those those critical frontline type employees, andthere's all of these public expressions of appreciation and support. We really didn't seethat play out in the data in terms of what it's the experience of likefor these employees on a day to day basis, and so I think thatthat's important for business leaders to recognize and take action against. So that that'smy third main finding. So, knowing our audiences the manufacturing sector here,how would you say manufacturing stacked up against? I think you looked at what's seventeensort of industry categories? Yeah, yeah, seventeen, and manufaction wasactually right smacked out in the middle. So I mean I they think theywere like literally the the the Middle Line of our full data set. Sothere are some, you know, areas where we're manufacturing really excelled things likewhat we call corporate ethics. There's your company as a whole, ethical purposedriven manufacturing. Sport is fairly high on that, emphasizing diversity, equity andinclusion. Manufacturing also scored fairly high on that. And then when in otherareas it was, you know, trying more towards the bottom. So Ialready mentioned the performance under pressure. Willingness to speak out was rather low,and sort of a looking into two leaders and how leaders are will modeling,what are they role modeling? That was one of the other areas of opportunityfor the manufacturing industry. But yeah, overall, kind of taking all theseimagtions of ethical culture together right there in the middle. So some clear strengthsto build on and some cleer areas of opportunity to invest in. What doyou think are some of the things that a manufacturing leader that's listening right nowcould take away from the findings of your study? I think recognizing that howyou, as a leader and organization, go about fostering an ethical culture,a healthy work environment, emphasizing our principles are values how you go about doingthat needs to vary depending on the types of employees that you're engaging with.So kind of going back to that disconnect between office employees and production level employeesand just recognizing that the kind of corporate environments in which those two groups ofemployees are experiencing is different, in appreciating that difference, acknowledging that difference andmodulating your approaches based on those differences. So when we do this work withorganizations, we find often that it's so hard to reach production employees that they'renot in front of computers. So how do we engage with them? Wedon't want to take them off the line because them that's blows down our productioncapabilities. So we're not really prioritizing training them on xpoyc topic or whatnot.So it's more about recognizing how can you work within those confines to ensure thatproduction employees are as equal and active participants in your organizational culture as your officeemployees. It really drives home the need to rely on your middle management,your line leaders or supervisors, to be those ethics champions, to be thosevalues champions, and we've seen organizations be really successful at providing that mental managementgroup with talking points or a short Vignett...

...or exercise or example that can bedeployed at the beginning of a daily, you know, huddle or shift meeting, those little ethics moments. They don't have to be these big end uplike let's step away and do a thirty minute training. It doesn't have tobe that. That might be appropriate for your office workers, but just becauseit's appropriate for them doesn't mean that it's appropriate for your production workers or thatyou should even try to replicate that approach. So it requires more more thought,more flexibility and how you're shifting your approaches depending on who you're interacting with. But when done well, and we have seen many examples of when thisis done well, the impact is really quite profound. And when you thinkabout our current environment with the great resignation and it's really it's an employees marketright now. People are leaving left, right and center to go to othercompanies where the pay is better or the culture is better, to respect foremployees is greater. That's happening all over the place and we're seeing massive laborshortages and so anything that manufacturing leaders can do to recognize these differences and respondto those differences is going to help them be more resilient in the face ofthis great resignation and any other type of business destruction that we're continuing to faceover and over again. Yeah, it's it's very real right now. EverybodyI talked to is is facing the same problem right it's just it's hard enoughto find labor and once you have the right people on board, you knowbe able to keep them and help them grow and be happy in their jobs. So I think everything you're talking about today is really more relevant than everfor so many reasons. Yeah, absolutely, Emily. If you're leading a companythat's not ranking too well right now against bench markspeers like, what aresome of the first things you should do to start improving your culture? Well, I think the first thing is to get really clear on what your cultureis. So having measured your culture, for example, and there's a varietyof ways that organizations can go about doing that, surveys focused group, youcan look at exit interview trends, you can look at hotline and reporting statistics. I mean there's there's there's a variety of ways that organizations are probably alreadycollecting data or or could collect that data to get a handle on what whatis our culture? Because again, we talked about the leadership to connect.ME, as a leader, I might think that it's one thing, butthat's not necessarily going to match the reality on the ground. So the firstthing to do is to get really clear on what is your organizational culture andthen you can figure out where you're going to focus. And there are someareas of culture, dimensions of culture, that do seem to have more ofan impact than others in some of the positive, you know, indicators thatleaders are looking at. So we talked about trust, we talked about organizationaljustice. It's probably a safe that to focus there. But kind of steppingback and thinking about how how culture is built in shape, it really startswith your foundation of who are we, what is our what's our purpose inthe world asn't organization? What are the values that are going to guide usas we work to achieve that purpose? How are we communicating that and breakingthat down for all of our employees and connecting that to their individual role ratherthan Morphas high level idea? How are our leaders we enforcing those messages?And that's that's really your foundation. Are Policies and programs in support of these, distart performance management, for example. Does that line up with the thingsthat we say are important, like what are we actually measuring people against?And then from there thinking about the your...

...the work atmosphere in general. Solevels of trust, organizational justice. Two people have confidence that standards are appliedequally across the board, that that are top performers are held to account inthe same way that those at the bottom of the corporate ladder. Our helpto account, being able to really make that clear through examples, to beingtransparent, talking about it, engaging in dialog with with employees, encouraging speakingout and more important than that, is to actively listen listen up. Wekind of we say speaking out and listening up. We see a lot inthis work that we do with organizations that employees do speak out and then theyfeel that nothing happened or they weren't heard, and so that that really diminishes people'swillingness to do so again. I mean, Darren Os is sort ofin the headlines again right now because the trial is under way, and here'san example where employees did speak out and they were actively not listened to andactively retaliated against. And then now you have the dissolution of when organization andwhich leaders facing criminal trial. So focusing on on that work atmosphere of trust, organizational justice, speaking out, creating a place where people feel a senseof belonging, and then that is what translates into your performance metrics that Imentioned, the ethical performance, business performance. So there's kind of a sequencing effectto how culture is is built and developed in an organization. But it'sreally going to depend on your specific situation in where you are. You don'tnecessarily need to start at the beginning, so to speak, like you mightalready beat the part way there, and so that's why this, the culturemeasurement piece, is so important. That's going to be what's really going togive you the the actionable insights. Beyond that, just communication and transparency areso key and demon training to employees that you mean what you say, walkingthe walk, not just talking to talk. So when we talk about ethics andcompliance, we often hear its appliance. Professionals say will we we did dothe right thing and we held our top stales exact. He he orshe broke a rule or policy and we held them accountable. And we disciplinethem in these ways, but nobody knows about it, and our responses willtell people about that and kind of the counters typically. Well, that explosesus to liability and there's confidentiality, and those are all true, but there'sways to share these stories and it's through sharing those stories that people believe us. How you build trust? So sanitize the story. Included in your includedin your training. If you don't want to do that, rip from theheadlines, there's a competitor that that's been in the news recently. Bring inthat scenario and and talk about how could this play out here and what wouldwe do? We see a lot of organizations. They publish just statistics,so no details, but just statistics of we had x number of reports ofmisconduct and we investigated ninety percent of them and seventy percent were substantiated. Andthese were the types of violations. Harassment, conflict of interest, safety, whateverit is. And then these are some of the discinary actions that thatwe took. We have one company that we highlight in a case study inour report that does that and breaks it down by level. So to reallydrive home the point that we hold everybody accountable leaders as well as individual contributors. So those are just some of the ways that companies can and should besharing how these things are playing out in practice and it goes so far inbuilding that trust among the employee population and that confidence in an organizational justice.We consistently see those as being ranked like the number one thing that had animpact on me as an employee in believing...

...in what my company says. Sothat's one tool that, regardless of where you are and what your situation is, that can be deployed with great effect and leaser anything you'd like to addto the conversation that I didn't ask you about when I think that a takeawayin all of this is recognizing that culture exists in an organization, whether youare intentional about it or not. So do you have some type of culturethat you want culture is there a corporate control to be managed in shapes justlike any other, and it requires investment and nurturing and clarity around what typeof organization do you want to be? I think that people don't really debatethat act that much anymore. We all kind of get the cultures a realthing. So where we are now, like the next step change is inthat intentionality around shaping organizational culture, just as companies are intentional about shaping andtracking and measuring any other key business practice or desired outcome. And there's alot of great examples of organizations that are during this really well out there andwe should learn from them. I appreciate the perspective your bring into the manufacturingsector here and I imagine the work you put into that study was just anabsolute beast. So thanks for doing it and for sharing some of the insightshere today. Yeah, and thank you so much for having me. Canyou tell our audience how they can get in touch with you and where theycan learn more about lrn and where they can find this study? Yeah,ll rendcom, that's fell Amazon, Larry Robert ancy and the study the benchmarketbustical culture. It's like they're on a home page, so you can downloadit there and I'd love to continue the conversation. So I'm emily dot minorat ncom. Be Happy to talk with anyone who's listening. Emily, onceagain, thanks for doing this today and as for the rest of you,I hope to catch you on the next episode of the Manufacturing Executive you've beenlistening to the manufacturing executive podcast. To ensure that you never miss an episode, subscribe to the show in your favorite podcast player. If you'd like tolearn more about industrial marketing and sales strategy, you'll find an ever expanding collection ofarticles, videos, guides and tools specifically for bdb manufacturers at Gorilla Seventysixcom learn thank you so much for listening. Until next time,.

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