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Strengthening Your Program with Tone from the
Middle
Rachel Batykefer
Kirsten Liston
Washington DC Regional Compliance & Ethics Conference 1
Observation 1:
Compliance programs today are
expected to deliver fundamentally
different outcomes than in the past
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Percentage
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To have an effective compliance and ethics program […] organizations shall […] promote an organizational culture that encourages ethical conduct and a commitment to compliance…. Federal Sentencing Guidelines Manual §8B2.1(a)(2)
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Observation 2:
Changing the culture requires a
different approach and toolset than
Tone from the Top + training.
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“Culture eats strategy
for breakfast”
Mark Fields, President Ford North & South American Auto Operations
Wall Street Journal, 23 January 2006
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40%
5%
10%
50%
65%
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Change is hard.
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Observation 3:
If you’re not setting Tone from the
Middle, someone else is.
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What Does “the Middle” Mean?
The Top
The Middle
CEO and Senior Operating Execs
Managers w/ ≥ 1 direct report OR Project Team
managers despite reporting chain
Individual Contributors
The Base
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Why Does the Middle Matter?
“Most corporate leaders favor formal, rational moves and
neglect the informal, more emotional side of the
organization. They adjust reporting lines, decision rights,
processes, and IT systems…but overlook informal
mechanisms such as networking, communities of interest,
ad hoc conversations, and peer interactions.”
--
“Cultural Change that Sticks”
July/August 2012
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Formal •
•
•
•
•
•
•
•
•
Reporting structures
Decision rights Business processes and policies
Training, leadership, and organizational development programs
Performance management
Compensation and rewards
Internal communication
Councils and committees
Company events
Informal
• Behavior modeling by senior leaders
• Meaningful manager/employee connections
• Internal, cross‐organizational networks
• Ad hoc gatherings
• Peer to peer interactions and storytelling
• Communities of interest
• Engagement of motivational leaders
• Changes to physical space
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What’s the Middle saying today?
…managers are responsible for a
worrisome share of workplace
misconduct, and senior leaders are more
likely than lower-level managers to break
rules. In sum, the very people that are
supposed to act as role models or
enforce discipline are often guilty of bad
behavior – a troubling insight that ethics
and compliance programs should
account for….
2013 National Business Ethics Survey (Ethics Resource
Center)
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What’s the impact?
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Observation 4:
Compliance programs must reach a
certain level of maturity before they’re
ready for “Tone from the Middle”
activities
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What is needed to design, implement
and manage an effective program?
Strong Tone at
the Top
•Include completion goals on top
executive scorecards
•Engage in ongoing conversations with
leaders about the program
•Ensure consistent communications
from leadership to all employees
Supporting
Tone at the
Middle
•Discussion-based program that can be
included in pre-standing meetings
•Managers can have the power to
select scenarios applicable to their
employees
•Equip managers with all necessary
materials
Proper
Planning and
Strategy
•Understand and address cultural
roadblocks
•Needs assessment
•Enterprise risk assessments
•Audit, investigation, and compliance
hotline findings
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What is needed to design, implement
and manage an effective program?
Training All
Aspects of
Your Program
Centralized
Reporting
Global
Network of
Support
• Code of Conduct
• Anti-corruption, including third
parties
• Interactions with government
officials, members of the
healthcare community and
commercial customers
• Dashboards by region/area of
responsibility
• Program completion monitoring
• HR, Legal, and Compliance
champions
• Business stakeholders
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How mature is your program? Do you….?
 Develop supporting  Collect continuous feedback and materials/programs for all?
implement program improvements?
•
•
Polling/pulse employee surveys
Focus groups
 Ensure total population receives relevant training through audience identification?
•
•
Online employees
“Offline” employees
•
•
“Living” FAQs
Quick reference guides
• Compliance “help desk”
 Launch employee engagement efforts?
•
•
•
•
•
Contests
Mobile App
Marketing materials/articles
Roadshows/live trainings
Communication campaigns
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Observation 5:
Just start. Really…..just start.
(You can build as you go.)
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Goals and Elements to Keep in Mind
The Goal: Empower managers to have ethics and compliance based discussions with their employees.
The program must be:
 Convenient. It should not be a ‘burden’ to managers and should not be a ‘lecture’ to employees.
 Engaging. Topics must be engaging so employees participate.
 Simple. The more complex the program the more difficult to gain buy‐in.
 Ongoing. Discussions should be ongoing, not a one‐time event.
 Brief. Sessions should be able to be completed in 10 minutes but be dynamic enough to allow for longer discussions.
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Material Development
 Focus on the ‘gray areas’ of compliance. This is where employees have the most questions.
 To minimize costs, develop in house and ensure they are discussion based. Materials we developed include:
 Employee Presentation
 Case Study
 Discussion Starters
 Lessons Learned
 Where to Report Concerns
 Detailed Facilitators Guide
 FAQs
 Translate into core languages.
 Delivery options can include intranet, secure internet site, unsecured internet site or company LMS.  Post a demonstration video for managers new to the process.
 Create new materials on a regular basis.
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Program Rollout
Post Pilot
Pilot
Launch with pilot
•
•
•
Conduct feedback survey
Launch
Launch in phases
Ask businesses to select target audience.
Ensure program is appropriate for all levels of management to use. Focus initial rollout on a subset of management. Ask managers to include the program as a ten‐minute agenda item during a planned meeting with their team each quarter. (It should not be a special 'compliance meeting.')
Global Compliance
our values, our strength
Branding
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Observation 6:
There are some common obstacles
to setting Tone from the Middle—and
some practical solutions.
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Middle managers are
great at hearing what
you mean….not what
you say.
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The further you want a message to go, the
simpler you need to make it
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The key to success is to make it as easy as possible.
(Remember what you’re competing with.)
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Observation 7:
A strong middle can extend the reach
of your compliance program.
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“Organizations
seeking to minimize risks…should
expect – and train – managers to have a heightened
degree of ethical awareness, so that…they can be
“sentinels” in spotting C&E risks.”
--Jeffrey Kaplan
Corporate Compliance Insights,
January 2011
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Observations:
1.Compliance programs today are expected to deliver fundamentally
different outcomes than in the past
2.Changing the culture requires a different approach and toolset than
Tone from the Top + training.
3.If you’re not setting Tone from the Middle, someone else is.
4.Compliance programs must reach a certain level of maturity before
they’re ready for “Tone from the Middle” activities
5.Just start. Really….just start.
6.There are some common obstacles to setting Tone from the
Middle—and some practical solutions.
7.A strong middle can extend the reach of your compliance program.
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A better ethical leader is a better leader.
(A strong middle makes a stronger
organization.)
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