New world: print, post, and pray just won't make it anymore regarding ethics codes. An ethics architecture is needed. Here are some guidelines

T+D, August, 2003 by Tim Hatcher

It has been said many times: The world has forever changed. Terrorist attacks on the World Trade Centers, the Pentagon, Bali, in the Middle East, and elsewhere have transformed the sociopolitical arena. The collapse of Enron, WorldCom, and other corporate giants has shaken the U.S. economy. Even the sacred world is on tremulous ground. Wrong doings by religious figures amount to a moral lapse among the world's faiths.

As a result, the way we plan for, carry out, and think about business has been severely tested. The initial general reaction of business to shattering events wasn't surprising: It circled the wagons by limiting travel in favor of communication technologies and bolstering security--obvious and essential responses. Facing the unknown, many companies did the best they could with what knowledge and skills they had. A few tried to go back to business as usual; others determined that wasn't possible. So instead of reverting to the status quo, they understood they must be better prepared for an unsure future and not become another Enron, or a victim of another Enron.

Many companies have seized the opportunity to reinforce their corporate values, culture, and climate and focused a laser beam on ethics. As businesses scramble to check their ethics' pulse, they have begun enforcement crusades by revisiting current regulations, such as the 1991 U.S. Federal Sentencing Guidelines, and they've rushed to comply with new laws such as the Sarbanes-Oxley Act of 2002. Peripherally, the exposure of criminal and morally reprehensible acts by some of the Catholic priesthood hasn't had as direct an influence on business as did the collapse of Enron, but it has confused some employees spiritually--a side often overlooked but vitally important to an ethical workplace.

Training reacted well, but ...

It stands to reason that because training is a function of business and business has changed, so has training; at least, that's the assumption. But how has training really been affected? The evidence shows that in general, training reacted well by quickly ramping up and offering safety and security-related training, analyzing existing crisis-management systems, helping establish risk-management and governance procedures, and increasing ethics training and development or revising ethics codes. Not to demean the significance of those actions, but it's vital to recognize that they were primarily knee-jerk reactions to anxious management facing unprecedented and potentially devastating events and an uncertain future. No doubt such actions of short-term value impressed management and kept many companies afloat, but few long-term strategies were implemented by training or HRD departments. What has been lacking are the strategic issues that businesses must address in this altered business climate--namely, long-term and substantive changes in character and values development, as well as sustainability of ethical organizational climates and cultures. Only a handful of organizations have weathered the turbulence--such as Southwest, the only major airline not to lay off employees after 9/11. Southwest stood firm through its dedication to people development. If the workplace learning and performance function is to live up to its full potential of strategic relevance to organizations, then systems and processes must be put in place to create and sustain companies' ethical values, culture, and climate--not just a code of ethics or another half-day of ethics training.

Functions other than training certainly contribute to an ethical climate, but it's increasingly obvious that lapses in ethical judgment, well illustrated by Enron, resulted, in part or perhaps largely, from poorly designed or implemented people development systems such as rewards, communications, hiring, leadership development, t&d, and performance management.

We must move beyond talking about ethical culture and values to implementing specific systems that proactively reinforce ethical and responsible values through measures, rewards and punishments, and employee learning and development. Having a code of ethics and ethics training isn't enough. A May 2002 Conference Board survey of 100 U.S. corporate ethics executives found that more than half of respondents said that even if Enron's senior management had received extensive ethics training (which they didn't), it would've made little or no difference. According to Stuart Gilman, president of the Ethics Resource Center--a not-for-profit organization offering business ethics consulting and resources, headquartered in Washington, D.C.--employee training is common, but ethics training for upper-level management isn't. A culture of "anything goes as long as it makes money" prevails over even the best training or most sophisticated code of ethics, It's ironic that Enron had a highly developed code of ethics that was suspended by the board of directors as "off-balance-sheet" financial structures were created--the same financial structures that eventually led to the company's collapse.