Changing social norms

Sep 15, 2017

In the 90 and early this century, we had social norms in the financial services industry, that culminated in some cases in “the end justifies the means” or “as long as you are not caught”. Similar norms caused corruption by large corporates in developing countries or by international sports organizations. We all know the fall-out from those actions, seen in the financial crisis, in Diesel gate etc. The value, that is destroyed, by far exceeds any gains previously made – and not just monetarily. Fortunately, with increased transparency, we feel a shift in social norms in society, in the press and in organizations. It is a slow journey with setbacks along the way, but not moving is not an option.

Transparency is at the core to combat wrong social norms.

The world bank talks about a project of a 0 Rupee note with a pledge to eliminate bribery on all levels, because you have to show, that you noticed the wrong behavior, otherwise you implicitly condone it.
The same applies for organizations, for example: An organization has defined as their new rule to always act in the customer’s best interest. To make this a reality, the teams need to understand all the areas, it can apply to, they need to figure out the nuances for their own work and they need to get behind it as well. A good way to achieve not just transparency but true understanding is by using case studies and giving the teams time to discuss and debate them. Case studies really help people understand the norm on a more profound level and their role in it. Another advantage of the case study discussion is, that people identify for themselves the vital behaviors supporting the new rule. But transparency is only the first step. What do you do, when a team member understands the new rule, but is doubtful or cynical about it. A reason can be, that the leaders don’t role model it clearly enough, another can be that the reward structure doesn’t align with it. One solution is to obviously get the role modeling and reward structure right. In addition, you can activate peers to influence the late movers or sceptics. Let’s assume you have reached the level of understanding and even some commitment, will everyone all follow the new rule now? Most likely not. From understanding to doing there is still a gap: How would doing, i.e. acting in the customer’s best interest, look like? It can be, that you create a great new service for them. It can be that you advise them to buy the for you less profitable, but for them the right product. And it can be, that someone speaks up, when they see, this rule in danger. This act is actually one of the most powerful ways to create new norms, because it shows the courage of the person to stand out for something they care about.

Why do I say it takes courage? After all it is the new rule, it should be easy to speak up for it.

But it is not, because, one of our most powerful motivators is to be part of a group and to do what everyone else does. And this is made even more risky, if the person we speak up to is someone with more power, someone more senior.

So beyond

  • Transparency
  • Understanding
  • Commitment

you need to enable your teams to do it. And for the difficult challenge of speaking up, you need to tell, teach and encourage your team to speak up. One way to enable your teams to speak up is to teach the skill. How to speak up without offending or attacking someone, while still creating a sense of urgency and importance, can be learned. And more importantly it needs to be practiced. Trainings we offer very heavily lean on practicing to get more comfortable to actually doing it in real life. The good news is, once you start yourself and your team on this journey, you enter a virtuous circle with every step reinforcing the process:

We have now discovered, that one of the important behaviors for transparency and a strong risk & compliance culture is “speaking up”.

Are there other behaviors to create new social norms towards this goal?

Decision taking is another one

How decisions are taken, in an organization, in a team is very important for their culture – and it’s almost never spelled out, let alone discussed or agreed on. One may argue, that there is no one way, decisions should be taken, that it depends on the situation. And that is correct. Nevertheless, making it transparent, is important, because there are other things stemming from how you take decisions. Early in my career I was a project manager, fairly junior still. We were deciding how to proceed on an issue my project was part of. The COO called for a meeting with many different stakeholders, across all hierarchies. The issue was discussed back and forth with everyone, regardless how junior having an equal voice. After everyone had their say, the COO took a decision. He explained the reasoning and while the decision went against my opinion, I understood and was ok with it, because I felt every argument was heard. This COO didn’t call for a vote, the decision was his alone, and that was accepted by everyone, because of the transparency and the fairness of the process.

I have seen all kinds of decision taking throughout my career.  If you can find win/win solutions and build true consensus among people, that works really well, because everyone really buy-in afterwards. But those kind of situations, are rare. More often, I have seen, people giving up, not even speaking up in the first place, decisions been taken for reasons not really understood or worse for reasons perceived as unfair and self-interested. A democratic vote has as much potential to frustrate as an autocratic decision. If you want to avoid this, there are several aspects, that are important for decision taking:

  1. The process how the decision is derived should be transparent!
  2. All the pros and cons should be heard!
  3. The reason for the decision needs to be understandable!
  4. People need to feel the decision is fair.

And how does decision taking relate back to social norms and more importantly to a strong risk & compliance culture. First of all, it is always a decision to take or not take a risk. Or to decide in the interest of the organization or in your own. Not taking a decision would be the ultimate problem, because the organization either moves to a standstill or all decisions are escalated up, which would create a bottleneck and severely slow the organization down.

Therefore, decision taking is at the core of a risk & compliance culture just as transparency is.

If you have an organizational culture, where everyone understands and aligns with the rules, e.g. acting in the customer’s best interest, and has learned how to and, more importantly, has the courage to decide, and does so transparently, you will create an organization of much greater adherence to the rules and at the same time of agility and coherence.

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