Introducing himself, Ray inquired about the receptionist's commute and impressions of the company. Ray explained to Harrison: "A receptionist is a corporate concierge. They will talk to more important people in a day - suppliers, customers, even CEOs - than you will talk to all year."
Enron-level scandals are not averted by talking to the receptionist alone, but Harrison, speaking at the recent 11th annual Wharton Leadership Conference, contended that small acts like this are part of what makes for an ethical corporate culture. And culture, not "heavy handed legislation" like the 2002 Sarbanes-Oxley Act, is a key safeguard against moral lapses, he said.
Harrison, who is now chairman of Lee Hecht Harrison, pointed to the failure of Sarbanes-Oxley to stop incidences of corporate fraud and misconduct. He quoted a 2005 PricewaterhouseCoopers survey that reported a 22% increase in global fraud over the last two years. When the Federal Sentencing Commission discovered this gap between intention and results, said Harrison, it held a year of hearings and then added one line to the Federal Sentencing Guidelines stating that public companies must "promote an organizational culture that encourages ethical conduct".
Shortly after this addition was made, Harrison was appointed worldwide chief ethics and compliance officer of Lee Hecht Harrison's parent company, Adecco, a position he held for two years and one that is mandated for publicly traded companies complying with Sarbanes-Oxley. He, along with other newly appointed ethics and compliance officers, wanted to know: What does "ethical culture" mean to the Federal Reserve Board? Harrison spoke with Federal Reserve Board officials and attended conferences where board members addressed the issue.
"All of us had pens in hand, waiting for the answer. They couldn't give it to us," Harrison recalled. "So I decided I would dig into this myself." What he concluded mirrors the words of former SEC commissioner Cynthia Glassman, who said that while the government can mandate ethical compliance, "we cannot legislate ethical behavior". For Harrison, even the word "ethics" itself seems too abstract; he replaces it with what he sees as a more intuitive, common-sense word: decency.
"Decency is not just about being nice," noted Harrison, author of The Manager's Book of Decencies. Rather, it is about creating a "bubble wrap" of good deeds that will protect a company in hard times. "Our willingness to be decent at work cannot depend on whether business is up or whether we're in a bad mood or whether it's raining. Decencies don't amount to anything unless we take the trouble to make them come alive through concrete acts in all kinds of weather."
For those at the top, this can mean such actions as being the first to volunteer for ethics training; honouring those with unglamorous jobs, like office cleaning; and listening to people at all levels of the organization.
Being accessible is as important as being humble, said Harrison. "Remember Ed Koch?" The former mayor of New York, in his second year in office, drove from borough to borough, asking people, "How am I doing?" "He went from being well-liked to well-loved." Harrison also recalled meeting up one night with a long-lost college roommate, Ruben Mark, chairman and CEO of Colgate Palmolive. Over a Japanese dinner, Harrison asked him how he explained his success. "He leaned across the table and said, 'That's easy. I make absolutely sure nothing creative or important is ever identified as my idea,'" said Harrison. "Now that's humility."
He also counseled executives to avoid the trap of "executive pomposity." He first heard that term in a 1967 speech from the CEO of Technico, who spoke specifically about executive "telephone pomposity". Said Harrison: "I have answered my own phone since then."
Being generous with praise and recognition will earn leaders what Harrison calls "psychic income". He gave the example of the chairman and CEO of Campbell Soup who "at the end of every day gathers his people to hear about neat stuff done that day and then handwrites thank-you notes to the people who did it. If you go around Campbell Soup, all over the world, you will find those notes framed."
A key test of a leader's sensitivity comes at layoff time. While western companies, and particularly American companies, have come to accept the reality of the need for layoffs, "what they should not come to terms with is a downsizing episode that is anything but sensitive, well thought-out and has preserving personal dignity as the highest priority," Harrison said.
Immediately after layoffs take place, for example, a leader should be "very visible and accessible," ready to answer questions, reduce anxieties and even assuage the guilt of those who survive the layoffs. "It takes courage to put your chest out, shoulders back, and be there to deal with this. It's a decency, and people will appreciate it."
At the end of the day, said Harrison, the words of poet Maya Angelou ring true: "People will forget what you said, they will even forget what you did, but they will never forget what you made them feel." Source: Knowledge@Wharton