Dance Skeletons, Dance!

It was the Irish playwright, author and political activist George Bernard Shaw who has been quoted as saying, “if you have skeletons in your closet, better bring them out and make them dance.”  I don’t know Shaw’s reason or context for this remark but it communicates an important and significant point to me:  Whether company, firm or individual, when we become aware of unacceptable behavior, egregious negative circumstances, or any harmful trust-breaking situations, the earliest recognition and address of the matter is the most effective approach.  The antithesis of that approach is summed up by what I learned in Sunday school:  “Be sure your sins will find you out.”

The recent Fortune 500 lists Walmart as America’s largest company with revenues exceeding $400 billion.  This massive retailer employs over 2 million people and supports tens of thousands of suppliers.  Its stock is owned throughout the world and held by the largest pension funds in our country.  Walmart is a tremendous community participant and contributor and is viewed by many as a model corporate citizen.  I could list many other laudable virtues of this giant retailer but you get the point—Walmart impacts the lives of many and is a positive influence throughout the world.

Recently the New York Times reported the results of an investigation which revealed that Walmart’s Mexico subsidiary (the largest foreign operation with 431 stores) paid $24 million in bribes to local officials to avoid complying with regulations and thus to illegally obtain construction permits for new stores.  The report goes on to state that a Walmart internal inquiry into the matter had been suppressed at corporate headquarters in Arkansas. 

It’s too early for the general public—people like you and me—to know the depth and extent of the problem.  We are aware of reports that Walmart named a former U.S. attorney for the Western District of Arkansas as global Foreign Corrupt Practices Act (FCPA) compliance officer earlier this year.   In addition, the retail giant disclosed the lawyers, law firms and accountants helping with its ongoing investigation into the Mexican bribery allegations and its worldwide review of compliance.  Walmart’s audit committee is overseeing the investigation with both the investigating law firm and Big 4 auditor, Deloitte.

I’m pleased that Walmart is now addressing the issue but I, perhaps like you, am outright flabbergasted that it took the New York Times to make the Walmart skeletons dance.  If I were to ask you to name countries in the world where you might suspect bribery of government and company officials is rampant I dare say most of us would probably include Mexico.  Actually there is an annual public disclosure by Transparency International of its Corruption Perception Index, a listing in rank order of the perceived most corrupt countries in the world, that would confirm what many of us suspect.   Mexico is not the worst on the Index, ranking as number 100 out of 183 (183 being the worst).  The U.S. ranks 24th. 

 An obvious point to me is why Walmart all of a sudden seems shocked at the bribery allegations.  You’re doing business in a high risk country; shouldn’t you be aware of certain known or perceived problems of doing business there?  Do any of Walmarts executive officers read the papers, watch TV, browse websites?  Due diligence on the front end of doing business in any country is I’m sure a part of what Walmart does.  How did they miss the obvious in Mexico?  Are they now reviewing other questionable environmental conditions in other countries?

Walmart is now into its investigation phase that typically leaves the public with a cynical and doubtful view of the process and the appropriate outcome.  I’ve already started hearing the street talk:  “they’ll slow walk this one”; they’ll fire a few underlings”; “they’ll lawyer up, spend a lot of money and then business as usual.”  I hope not.

I have some advice for Walmart and it won’t cost them a dime.  Walmart won’t get this from their lawyers, their highly paid consultants, or their public relations and positive image folks but they will get it from the people who matter most—customers like me.  My simple but hard-to-swallow advice: DANCE!  

D ig deep into all allegations, known and suspected malfeasance anywhere in Walmart land.  Satisfy yourselves that in the high risk countries in which you operate there are systems of internal controls which will alert you to inappropriate, unethical or criminal activities.

A ccountability is essential.  Make it known that no one, absolutely no one in Walmart will be exempt from being held accountable for acts of omission and commission.  Get tough; be assertive and consistent on discipline.

N ever underestimate the power of the public trust!  Immediately begin a positive program of restoring trust, not damage control but proactive messages and actions about what Walmart is doing to make sure that business practices are legal, ethical and socially enhancing.

C ommit to expectations of a trusting public not simply cooperating with all investigative and law enforcement officials but leading them in collaborative fashion to help you restore trust.

E xalt and model integrity from the executive quarters all the way through the company in every country in which you operate.  Remind your customers in every store what you stand for and invite your customers to also be alert to anything which would detract from your trust-driven intentions.

Yes, “DANCE” is perhaps overly simplified but it’ll work not as some short-term fix but as a longer term, more permanent approach to ensuring the public that Walmart is serious about going forward, fervently addressing its problems.  Walmart is a model in many communities.  The company now because of these latest allegations has a tremendous opportunity to do the right thing and demonstrate what others in similar kinds of situations might do. 

Will Walmart lead?  Will Walmart make their skeletons DANCE?

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A Culture of Character

Kirk Douglas, in his autobiography, relates an amusing story. Driving along on the outskirts of Los Angeles one day, he stopped to pick up a hitchhiker. As the young man got into the car, he recognized the famous actor and, in awe, asked "Do you know who you are?"   Astonished by the simplicity but also the profundity of the question, Douglas pondered its meaning and considered if he even knew the answer.

 

Knowing who we are is fundamental to shaping ourselves, our companies and our firms into who we really want to be and how we are seen by others.  I firmly believe that successful and trustworthy companies are intentional and purposeful in their efforts to produce quality products and services and to sell those products and services within channels and systems which rely on truth and transparency.  These same companies and firms know who they are when it comes to treating employees as partners and associates, being sensitive to their care-taking environmental role and being an active and positive presence in their respective communities.

Yeah, I know that sounds like “motherhood and apple pie.”  Nice words but does anyone believe it or do it?  Actually many companies and firms—and I think most—subscribe to a purposeful plan of always knowing who they are and how they should behave in the marketplace.

Ever hear of Tom Hill, Chairman of KIMRAY, Oklahoma City?  Not only is Tom an outstanding leader of a remarkable company (recently awarded Center for the Public Trust’s Being a Difference Award), he is also the founder of an international organization, Character First! which provides families, schools, businesses and other organizations materials and training for building character.  His company, KIMRAY, manufacturer of control valves and related equipment for oil and gas producers, reflects Hill’s values by convening all its employees once a month, informing them of company performance, plans, and, yes, its values.  It’s just one more step in building character in a company and its employees.

Tom Hill’s 2010 book, Making Character First, is a guide to building a culture of character in organizations.  I was impressed with the Pocket Guide accompanying the book, which lists 49 character traits and their opposites and I offer them to you as not only a summary of the book but also a checklist of meaningful attributes to consider personally and professionally:

Alertness vs. Carelessness                           Attentiveness vs. Distraction

Availability vs. Self-Centeredness               Benevolence vs. Selfishness

Boldness vs. Fear                                         Cautiousness vs. Rashness

Compassion vs. Indifference                       Contentment vs. Covetousness

Creativity vs. Underachievement                Decisiveness vs. Procrastination

Deference vs. Rudeness                              Dependability vs. Inconsistency

Determination vs. Faintheartedness            Diligence vs. Laziness

Discernment vs. Shortsightedness              Discretion vs. Recklessness

Endurance vs. Despair                                Enthusiasm vs. Apathy

Faith vs. Ignorance                                     Flexibility vs. Stubbornness

Forgiveness vs. Rejection                          Generosity vs. Stinginess

Gentleness vs. Harshness                          Gratefulness vs. Presumption

Honor vs. Disrespect                                 Hospitality vs. Loneliness

Humility vs. Arrogance                             Initiative vs. Idleness

Joyfulness vs. Self-Pity                             Justice vs. Corruption

Loyalty vs. Unfaithfulness                        Meekness vs. Rage          

Obedience vs. Rebellion                           Orderliness vs. Confusion

Patience vs. Restlessness                          Persuasiveness vs. Contentiousness

Punctuality vs. Tardiness                          Resourcefulness vs. Wastefulness

Responsibility vs. Unreliability                Security vs. Worry

Self-Control vs. Self-Indulgence              Sensitivity vs. Callousness

Sincerity vs. Hypocrisy                            Thoroughness vs. Incompleteness

Thriftiness vs. Extravagance                    Tolerance vs. Hostility

Truthfulness vs. Dishonesty                     Virtue vs. Vice

Wisdom vs. Foolishness

Do you know who you are?  Does your company or firm know who it is?  A review of the character traits listed may give us further insight to answering the question that befuddled Kirk Douglas.

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"Chunk" With Care

 

“Is trust all you’re ever gonna write about?”  

“Pretty much,” I rather curtly answered Sally and began to explain that my comments would hardly exhaust the subject.  She gave me “the look” turned, walked away and left me with the question still clamoring for a valid response.

I then dove quickly into reading Charles Duhigg’s book, The Power of Habit, where I discovered in the first few chapters a more satisfying response to Sally’s question.

Duhigg strongly asserts that one part of our brain—the basal ganglia—stores patterns and in effect causes habitual responses.  “The process in which the brain converts a sequence of actions into an automatic routine is known as ‘chunking,’ and it’s at the root of how habits form.  There are dozens—if not hundreds—of behavioral chunks that we rely on every day.  Some are simple:  You automatically put toothpaste on your toothbrush before sticking it in your mouth.  Some, such as getting dressed or making the kids’ lunch, are a little more complex.”

Recently Sally and I experienced “chunking” as we habitually pushed the garage door opener, jumped in the car, turned on the ignition, engaged reverse and, without looking, backed out.  It always works—door goes up, car goes out--habitually.  But not that day.  Garage door stuck at the top, I caved it in and damaged my car.  Habit.

Duhigg calls our unthinking habitual responses an “intricate ballet” akin to auto pilot which we experience every day.

If behavior patterns and responses can in fact be stored in the basal ganglia area awaiting a cue, then it seems to me that such traits as trustworthiness, truthfulness, and transparency might become habitual for an individual, a company, a firm.  What would a company look like if its leadership emphasized in classroom settings, on line interactivity and company retreats its strong stand on integrity, accountability, truth telling, and trustworthiness.   

I’ve often wondered how failed and disgraced companies and  audit firms would’ve fared had they spent more time on developing ethics and integrity as habitual attributes and qualities.  Incentives for increased business and profitability are certainly part of our economic model but shouldn’t the incentives include a focus on first and foremost the principal sustainability factor of the public trust? 

 

Is all this habitual ethics practice some feel good theory, some warm and fuzzy notion, some nice idea that loses its authenticity in the dog-eat-dog world of reality?  Not according to Pinnacle Financial Partners, headquarted in Nashville, and not according to 99 other companies recently named by Forbes magazine as “America’s Most Trustworthy Companies.”  I know the Pinnacle story.  Several years ago, we in NASBA researched banks to try to find a bank that met our high standards for service, community involvement, reputation and ethical emphasis.  Pinnacle is purposeful about ethics and integrity.  Its employees buy into what the bank’s leaders model—truthfulness and transparency.  Pinnacle has been consistently year after year named one of Nashville’s “Best Places to Work.”  Trustworthiness has become a habit with Pinnacle.  Isn’t that refreshing?

So, I’ll keep on writing about trust trying in my drip-drip-drip fashion to help individual, professional firms and companies pursue programs and practices which lead to clients and customers believing, trusting, and having confidence in their products and services.  

Your basal ganglia sits there preparing to chunk.  Time to get “chunking” with habits that matter to the public—truth, transparency, trustworthiness.

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What About Some Trust Insurance?

A few years back, meeting in its London headquarters, Clowns International issued a strong advisory to its membership that each should strongly consider buying pie insurance.  Pie insurance would protect against the risk of being sued by spectators who after being smashed in the face with the creamy concoction might not appreciate the joke.  Although no clown had been sued for such an incident, Clowns International believed it “just a matter of time” before some pie-face instigated a suit.

Of course there are many other forms of insurance which to the average person seems a bit strange.  We all know about people’s noses, legs, arms and other body parts being insured.  I read about a famous Australian cricketer named Merv Hughes who insured his moustache for $400,000.  And today’s fascination with vampires has produced a demand for vampire and werewolf bite insurance.

In the wake of our country’s budget problems, ever increasing deficits, Wall Street lies and misrepresentations, and some corporate officers and financial professionals’ greed, the thought occurred to me that we the investing and consuming public need some trust insurance.  It follows that if we are completely dependent on trusting these companies, officers, and professionals, then they ought to at least fortify our trust with insurance that would help to assure us that they are serious about integrity and straight dealing. 

There are some companies which are striving to provide a type of insurance to all their stakeholders that they indeed are serious about corporate social responsibility (CSR) and adhering to their codes of conduct.  An excellent article appearing in the March/April 2012 edition of the Washington CPA coauthored by Laurie Tish, CPA, Partner, Moss Adams, member of board of directors of NASBA and Bob Bunting, CPA, former CEO of Moss Adams, summarizes well efforts being made by about 50% of large U.S. publicly traded companies to provide to the public CSR and Code of Conduct reports.  These reports give us an assessment of these companies’ performance in environmentally sensitive and other social responsibility areas as well as how they and their employees are behaving under ethical guidelines and internal controls. 

Companies such as Adidas, McDonalds, Apple, Nike, Aviva, Coca Cola, Pepsi, Sony and many others are proactively and positively striving to give us more confidence, more trust in what they do and how they conduct themselves.  I think that’s pretty good trust insurance and I believe that any company, professional firm, government agency or other institution or organization should give the public similar assurance as to their actions and conduct.

Perhaps Wall Street and Main Street should take a lesson from the clowns.  If pie-throwing needs insurance then certainly peddling products and services under an integrity banner requires assurance to a trusting public.

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Trusting More Than "Eight Feet"

One of Charles Schultz's Peanuts cartoons has Lucy saying to Linus that she doesn't trust anybody.  Linus replies, "You don't even trust me?"  "I trust you about as far as you can throw your blanket," says Lucy.  Linus then heaves his blanket, looks at Charlie Brown and says, "My sister trusts me eight feet."

Linus communicates what many of us feel about those with whom we do business.  We may buy their products and services but our trust in them is not very high--maybe only about "eight feet."   We don't easily dismiss the hundreds of billions in losses in our 401Ks, our homes, and jobs that has been experienced in our country because of others' greed, corruption, lying, misrepresentation, exaggerated financial reporting...and the list goes on and on.  "Eight feet"?  Why should we trust them at all?

And yet we want to believe, we want to trust, we want to have confidence in what companies tell us about their products, their services and about themselves.  How much do you trust the following representations made in the form of mission statements, logos or taglines?

• All the News That's Fit to Print (New York Times)
• Fair and Balanced (Fox News)
• Commitment Runs Deep (Devon Energy)
• Bettering the Human Condition (Hospital Corporation of America)
• We Make Home Possible (Freddie Mac)
• We Are Creating Value--We're Committed To Doing Even More (Fannie Mae)
• High Performance.  Delivered.  (Accenture)
• Spirit to Serve  (Marriott International)
• You're Going to Like the Way You Look.  I Guarantee It.  (Men's Warehouse)
• Always Do The Right Thing (The Scooter Store)

I must admit that I have a little of Lucy in me when I read some of the assertions above.  But what does it take for me, for you, for the public to really believe, rely upon and trust what a company says about itself?  Certainly not perfection.  We don't expect even the most trusted and ethical companies and firms to be free of errors, occasional lapses of judgement and some bad decisions.  That's part of being human.  What we would like to see in a company is the antithesis of what Jim Collins in his book, How The Mighty Fall, describes as five stages of decline:  hubris (excessive pride); undisciplined pursuit of more; denial of risk; grasping for salvation (drastic measures to save the company); capitulation to irrelevance or death (simply giving up).

We all have learned a few things about companies/firms coming out of the scandals of 2000 and the lies, misrepresentations, and exaggerated financial valuations of 2008.  Among my principal take-a-ways is that I now look for some semblance of humility by corporate officers, a disciplined and methodical approach to growth and profitability, and risk taking that is reasonable, measured, and communicated. 

After college, as I prepared to be an auditor for Ernst & Ernst (now Ernst & Young), my Dad sent me off with one of his memorable aphorisms:  "A lie stands on one leg; truth on two."  I'm sure I laughed a bit at his advice rolled up in that statement, but now, years later, I realize my Dad had a doctorate in the elements of human trust.  We all need to mean what we say and live up to the trust statements we dare proclaim.

"Eight feet" is far too short for trust!

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Moral Muscle

Moral Muscle

The Ass and His Purchaser, an Aesop Fable, concludes with this moral principle:  “A person is known by the company he keeps.”  During my busy teen years, I was often reminded by Mom and Dad of hanging around with the right crowd.  One Bible verse ground into my memory at home and church was “evil companionships corrupt good morals.” 

While “a person is known by the company he keeps” is an apt caution for any individual, perhaps the corollary, “a company is known by the people it keeps,” is more applicable in our business and institutional culture.  It is after all an elementary and foundational truth that people create and perpetuate a culture of ethics and conduct, that people shoulder responsibility and accountability for actions or inaction inside any organization and that people ultimately give companies, firms and all organizations their face, their image, their reputation and their standing.  A company’s mission statement is a statement of collective commitment by its officers and employees, not just a group of words strung together by slick promotion having no attachment to those breathing and living souls inside the company. 

“Can I trust you?” begins with “you.”  You, the company must be made up of people committed to truth, transparency, accountability, honesty and integrity.  Sounds like motherhood and apple pie, huh?  It’s simply elementary, foundational—“a company is known by the people it keeps.”

I can tell you about one company—and there are many-- which is committed to having the right people…the kind of people who simply want to serve passionately and provide the public with quality products-- Pitney Bowes.  PB is certainly known for its competitive edge in mail delivery and processing technology but less known perhaps is their global leadership in portrait software, electronic discovery services, mail-based marketing services, customer intelligence software and a host of other customer communications applications.  

PB was recognized four consecutive years by Ethisphere, a leading ethics rating organization, as one of the “World’s Most Ethical Companies.”  The framework of measurement employed by Ethisphere included:  ethics and compliance program; reputation, leadership and innovation; governance; corporate citizenship and responsibility; and culture of ethics.

What a great company!  Yes.  But let’s keep in mind that “a company is known by the people it keeps.”  

Now, let me tell you about a person inside the giant six billion dollar company who gives a representative and exemplary face to PB.  Her name is Robbie E.B. Narcisse, Vice President, Global Ethics and Business Practices.  In short, Robbie’s responsibilities include managing the company’s efforts to ensure that its worldwide business operations are conducted in full compliance with all applicable laws and regulations, company policies and procedures, and with the highest ethical standards.  Robbie’s rich background and experience in corporate law provides a meaningful complement to her passion to serve employees, stockholders, suppliers and the public in the right way.  

Recently, Robbie was awarded the prestigious “Being a Difference Award” by the NASBA Center for the Public Trust.  Johnna Torsone, PB’s Executive Vice President and Chief Human Resources Officer, who nominated Robbie for the Award said it best:  “Robbie is able to combine her legal analysis with a view of how the law applies when she is dealing with internal issues and she relies on her “moral muscles” and gut intuition to ask:  “does this feel right?  Is this issue in keeping with the spirit and ethos of PB?”  

How many situations like AIG, HealthSouth, Arthur Andersen, Bernard L. Madoff Investment Securities, Lehman Bros, Fannie Mae/Mac, Satyam, Parmalat, etc. would have been avoided had certain individuals exercised “moral muscle” and simply considered as Robbie has, “does this feel right?, is this in keeping with the spirit and ethos of the company?”

PB is highly regarded and recognized as a world leader in ethics compliance and conduct.  And we only need to look at its people like Robbie E.B. Narcisse to understand why.  A company is known for this type person!

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