Ethics in Walking the talk!

Great Article by my colleague Steve Priest.

Ethics: Walking the Walk and Talking the Talk
ShareThisby Steve Priest @ 2011-10-24

Category: Compliance, Ethics, Featured Columns, Thinking Globally About Integrity, Leadership & Human Behavior

Robert Galvin
You may not have read about it, but a second tech legend died this month. Robert Galvin, whose father founded Motorola, became CEO of the firm in 1959 and grew it from $290 million in revenue to $10.8 billion in 1990 when he retired as chairman. In his tenure the firm developed the first cell phone and built the first cell phone network. Motorola became synonymous with innovation and excellence—it, not GE, implemented Six Sigma as a quality management process first in the United States.

Motorola also became known for integrity. Well before the U.S. Sentencing Guidelines were introduced in 1991, Motorola had articulated two key beliefs: Uncompromising Integrity and Constant Respect for People. Most companies these days articulate values, principles or beliefs. Putting them into action—implementing and institutionalizing them—is much more challenging.

Motorola worked to drive these beliefs through the company, not just through communications but through management development processes and performance appraisals. The Key Beliefs became stakes in the ground. When I was working with them to develop a new code of conduct, I suggested adding a third key belief which I felt was a de facto belief given focus groups I had conducted with employees around the world: Total Quality. Motorola ‘s leadership rejected the idea—quality flowed from integrity and respect. The key beliefs were real.

I did not know Bob Galvin well. One strong memory is when a Motorola colleague and I were eating lunch in the company cafeteria, and Bob Galvin, then chairman of the executive committee, sat down with his tray at the table next to us. After a polite pause, my colleague cast a lure in front of Bob as adeptly as any angler: “Bob, we’re pretty close to finalizing a new code of conduct.” Instantly attentive, Bob asked several questions, asked to see a copy (which he later returned with several very smart suggestions) and said, “This is great. We need this. Just make sure you pay attention to the managers in the middle. My experience is that senior management will get this, and so will the people on the front lines. It is hardest for those in the middle.”

One way Motorola attended to managers in the middle was through stories. Before I did any work for Motorola, I benchmarked them for another client, and I heard the following story about Bob Galvin several times.

One morning in the early 1950s, Bob Galvin, then a VP, welcomed a sales executive into his office. “How did the sales trip to South America go?” asked Bob. The exec responded, “Well, I have some good news and some bad news. The good news is we got the deal with the (South American)[i] government. The bad news is that they want us to increase our fee to $11 million dollars from $10 million, and deposit that million dollars in Swiss bank accounts for use by those who approve the deal.” The sales executive went on, “Bob, I know we don’t do business that way, so I turned down the deal on that basis.”

Remember, this was the early 1950s. No ethics programs. Twenty-five years before the FCPA. And the sale was not insubstantial. It represented about 5% of Motorola’s sales at the time, and was a very high margin. Still the sales executive knew “we don’t do business that way.”

Galvin responded, “Well done. But now I want you to do something more. I want you to go back to that government and tell them that not only are we not going to do business with them on their proposed terms, but we are not going to do business with them on our original terms until they demonstrate to us that they have reformed their purchasing practices.”

The sales executive saw his bonus disappear and replied, “Bob, isn’t that taking this ethics stuff a bit too far?” Galvin replied, “Absolutely not. Now we know for certain that their government is corrupt. If we know it, other governments know it and so do our competitors. If we do business with them now on any terms, even our own, we will be guilty by association and suspect by implication.”

I did most of my consulting for Motorola in the 1990s and early 2000s—close to 50 years after this event took place. And I heard this story everywhere—in Europe, in Asia, in Latin America and in the U.S. Employees got the details wrong. It happened in the 1970s. It took place in Vietnam. It involved $50 million dollars. But the story drift did not matter because they got the moral of the story right: At Motorola, we don’t pay bribes. Period.

It doesn’t matter where a person is from. This kind of story resonates. It is a primary responsibility of ethics and compliance officers to find these stories. Where in your organization has someone made a hard choice—a choice where doing the right thing cost the company some money in the short term?

Get your executives to tell the stories you find. Human beings remember stories better than any other content. Tell the good stories to counter all the negative ones they read in the media. We are surrounded by news of ethics scandals and failures. Some of them may even have occurred in your organization. You can’t ignore those stories. But tell the good ones too. Tell the good stories because they resonate and are true and beautiful. It may be the most important work you do this year, and will certainly be the most gratifying.

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[i] Motorola has never officially disclosed the country involved to avoid unfairly embarrassing people not involved, and I will respect their decision here.

Photo of Bob Galvin courtesy of Galvin Electricity Initiative.

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About the Author
Steve Priest was described by The Wall Street Journal as “one of the most sought consultants to keep companies on the straight and narrow.” For seventeen years Steve was president of the Ethical Leadership Group (ELG), a consulting firm that specializes in ethics training & communications and compliance assessments. Steve now serves as founder of ELG and senior advisor at Global Compliance, the compliance solutions firm that ELG joined in 2007. For more information about his work, visit Steve’s CCI author page.