Posted by Harry Hertz, the Baldrige Cheermudgeon
I am referring in particular to the Leadership category of the Baldrige Criteria for Performance Excellence. More specifically, to the questions related to legal and ethical behavior. And, to give an example, the questions, “How do senior leaders’ actions demonstrate their commitment to legal and ethical behavior? How do they promote an organizational environment that requires it?”
Let me share some data from a June, 2012 survey of 250 U.S. and 250 U.K. senior individuals within the financial services industry. Thirty percent of the respondents stated that their compensation or bonuses created pressure to compromise ethical standards or violate the law. Twenty-six percent indicated that they had observed or had firsthand knowledge of wrongdoing in the workplace. And 24 percent believed that financial services professionals may need to engage in unethical or illegal conduct in order to be successful. In a broader study of over 2,000 employees just released by the Ethics Resource Center, 13 percent of all U.S. companies’ employees felt pressure to break the rules. This is less than half the percentage for financial services, but still a real concern.
To address the survey respondents, the Baldrige Criteria might need to state, “How do senior leaders actions demonstrate their commitment to success, recognizing that it may sometimes compromise legal and ethical behavior? How do they promote an organizational environment that achieves success, recognizing that it may require illegal and unethical behavior?”
The survey results and the revised Criteria questions sound unbelievable, don’t they? Yet these are survey data from 2012, several years after the global financial crisis and while we are still suffering the consequences. The headline for the financial industry survey summary starts, “Financial Services Professionals Feel Unethical Behavior May Be a Necessary Evil…” Do they really believe that?
Certainly, there are many very ethical people and businesses in the financial services industry. Some of them have been recognized by and involved in the Baldrige Program. Let’s hope they prevail on the others to change their ways.
(I promise my next blog post will be about a very positive customer experience I recently had!)