By Laura Harrison, Director of People and Strategy
Who’s the conscience of your organisation? Where’s its moral compass? Does it have one? Does it need one? The VW scandal has resurrected stories of rotten apples, rogue teams. But who’s responsible for the cultures that foster, enable or obscure the existence of these rotten apples or rogue teams? These questions tend to divide opinion in our profession. Some argue that it’s HR’s role to develop and nurture healthy cultures and to alert leadership colleagues or decision makers to the health of the barrels holding the apples or the environments in which teams are going off-piste. The collapse of corporate cultures, leaders trampling openly on organisations’ espoused values or shafting their customers for short term gain – are all of these a failure of culture and therefore of HR? Others claim that everyone owns the culture; it’s everyone’s accountability (and therefore troublingly, nobody’s); HR’s role is to deliver the business strategy within the system. Cultures are soft, business plans hard.
What’s underlying this difference of opinion? Is it the fear that hard-won reputations for commerciality and hard-won seats at board room tables are risked by too much talk of the soft stuff? Hard to decide where accountability lies if you’re not even comfortable with the language or frame for the question.
To move the discussion on, if cultures are the soft stuff, what are ethics? Softer still, positively fluffy, ethereal to the point of mistiness? It’s interesting to me that as a profession we seem uncomfortable talking about ethics. I’m often told “well, I’m commercial so I don’t do ethics.” (As the wonderful Veronica Hope-Hailey said to me recently, can you imagine a chartered accountant saying that?). Surely ethics and professionalism are intimate bed fellows? Contrast “we were doing what we were told” and “we did what was right.” I’d argue that the former is administrative, the latter professional. To do the right thing, to make good decisions, requires mastery of relevant knowledge, strength of character and a frame of reference for what’s right and what’s wrong. Ethics in other words. And all of these requirements summarise the fundamentals of professionalism.
So what scope is there for HR to develop a conversation about ethics, to create the language and the frame for doing the right thing and pushing colleagues to do likewise? Interestingly, our latest research shows that there’s no “HR / Business” divide here. Business leaders want to do the right thing just as much as HR practitioners do, but the same research also shows a worrying gap between ambition and practice. I want to do the right thing, make a good decision but there’s no enabling system. I compromise doing the right thing to do the thing that is expected of me, turning a blind eye to the rotting of the apple, the long term implications or invisible costs of a decision. We think it’s part of our role as the professional body for HR and people development to champion this conversation. We believe professionalism in HR starts with knowing what we stand for – not what table we sit at - a set of principles that help us make good decisions, and advise colleagues and business leaders likewise. With those in place, we’ll have the credibility to apply our expert knowledge of human and organisation behaviour, backed up with a sound understanding of the business, to really make a difference to work and working lives. We think that’s the kind of HR that business leaders and people would trust with the critical issues on which the long term survival of our organisations hinge.
And what an opportunity! There’s no need for HR to be an adjunct to “the business,” a department tasked with implementing business strategy efficiently and with minimal risk. It’s possible to be commercial and a champion of better work and working lives. It’s possible to influence not from the position of reliable deliverer (although let’s be clear I’m not knocking delivery!) but from a strength of character and principles that frame doing the right thing - bringing questions of fairness, employee voice and long term thinking to the table that you’ve fought hard for a seat at. If not for that, why do we need the seat?
We’re working on the definition of these principles, and the findings of the report we’ve published today is helping to shape our thinking, but we’re also seeking further input from a wide range of people within and outside of the HR profession. My colleagues and I would love to hear your views in the comments below, and please do also take a look at some of the other blog posts we’ve published on this topic recently.
You can find out more about our Profession for the Futures strategy at our annual conference next month. In the meantime, follow our progress at cipd.co.uk/pff and join the debate at #changingHR on Twitter.
Read other blogs by Laura
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what is the professional standards and competencies in HRM can be inform on the strategic role of the HR leader
22 Oct, 2015 10:16
Clearly HR is many people's default 'box' for anything soft. So like it or not HR has a function in promoting ethical attitudes and behaviours. But... What on earth is the board for?? What were board-level people thinking at VW? Or Enron? Or RBS? Or ...? If NEDs are not asking tough questions and using board-level leverage, what chance do HR managers have? It's in the boardroom that ethics have to function and responsibilities - and the potential credits - have to be owned.
22 Oct, 2015 18:21
I think Dominic has an excellent point and this is a very nice post Laura. Well written and thought provoking.
The model could or should be this one : where the HR Director becomes the Special Advisor to the CEO OUTSIDE of the Hierarchy and - as CIPD's own David d'Souza blogged; and I was reminded of today - in the Consigliori role.
If the CEO did this (although in many cases the Chief Legal Officer is the current Consigliori and there should only really be one outside hierarchy role to check in on the CEO/Board) then maybe we'd be able to get something to negate out of touch NEDs; Shareholder myopic focus on short-term gains so will overlook or are ignorant to corporate misdemeanours and the Board itself in "yes" group think culpability.
I'm reminded of Pixar's creative culture which insists on someone playing the disagree; tear it to shreds; agitate role whether the person agrees or not. Someone deliberately to play the role of earth wire, alternative view, non-group think instigator is crucial.
As people and purpose become so much the galvanising force to sustained success, then this is where HR needs to be by the side of the CEO and not subservient to them. This works really well where the HR Director is also of an OD/Change mindset/approach.
This also gives the HR Director a totally different dynamic to safeguard the board and CEO from scandal although the VW example act of fraudulent and misleading activity appears to be something that happened a little below the Board level. Someone must have felt it was wrong and should be able to whistle blow to the HRD and then they seek counsel of the CEO. If the CEO tries to cover it up, the HRD can then get the Board to "revolt" or the NEDs, Shareholders to take action.
I say this not as an HR Professional keen to save my profession. I say this as someone passionate about work becoming that soulful, fulfilling proposition to as many people as it possibly can. Without HR's consigliori role, I fear we're always going to be going around the inhumane, mischievous and even toxic stuff we see all too regularly.
HR as the saviour of work? Stranger things have happened.
22 Oct, 2015 23:10
As an Ex Group HR Director I have always regarded HR as the conscience of the organisation and having to tread a very fine tight rope with the Board. On the one hand identifying the 'right thing to do' and being able / allowed to influence the other members of the Board when you have a CEO who is determined to push through a commercially quick short term gain at the expense of the people and the psychological contract.
I agree with Perry and Dominic in that we have to get the CEO to see you as a trusted advisor and who will listen and for us not just be subservient to them when there are real cultural issues to grasp and difficult decision to take.
Now as a tutor of employment law and employee relations for the CIPD Level 7 qualifications it is one of the first points I make to new students, that we as HR professionals have to be the conscience of our organisations and that this does ask a lot of us to be prepared to stand again a CEO/Board who you see as doing the wrong thing. Unfortunately there are a number in our profession who take the line of least resistance, in the view that agreeing and being seen as a 'company person' will further their career.
As Dominic highlights with VW, who was standing up for doing the right thing. While in the short term they will have sold millions of vehicles what the final cost will be financially will cost billions and what has it done to their reputation only time will tell but I suspect the overall cost will be immense.
It is not easy swimming against the tide, however, if like the salmon we try really hard we can succeed. So Yes, HR does need to be the conscience of the organisation.
28 Oct, 2015 14:11
Traditionally , HR , alias Personnel , alias Establishments, always was the ethical conscience of the company and was the informal sounding board for directors and CEOs. Since achieving Board Room status HR has sadly lost its integrity in those companies where the Board have not recognised the widespread impact of organisational culture and its often negative effect on business success. Identifying and addressing negatives in the cultural environment at every level and aspect of the business is the key to achieving ethical trading and protecting against costly reputation damage. HR directors need to remember their roots and ensure the rest of the Board appreciates the danger to the business of not doing so.
29 Oct, 2015 03:21
I too appreciate the article, thank you Laura. It is timely and provocative, but of course by the very nature of the authors of this report, our professional body, it is also unsurprisingly HR centric.
My personal provocation is to ask whether because HR is the people function, and ethics is a people thing that HRDs and HRDs alone should bear the responsibility for calling out ethical issues to the Board, the CEO and if needs be to ferment 'revolt' as you call it?
Cannot and should not the CIO, the CFO, the CLO the Marketing Director or any other board member be 'ethical' too and act, as Perry calls it in the Consiglieri role?
'Ethics' should not be shoe-horned into another HR CoE. The challenge for HR is to imbue it in the day to day as well as strategic activity not only of their own function but that of others.
Differentiating what is right [in ethical terms] as opposed to doing things right [in compliance terms] is key to the activities and responsibilities of all [and that includes software engineers at VW].
As the CIPD proposes HRDs should not duck the responsibility to be the champion of ethics, and to have the courage and power base to call out ethical issues, but it does the business a disservice if it does not distribute that ethical responsibility across and through the organisation. That is the bigger responsibility, and challenge.
30 Oct, 2015 15:04
A very thought provoking post Laura and I agree with a number of the comments here, its a genuinely important debate. And one in which the CIPD should play a role.
Looking at a number of the issues that have occurred in a wide range of organisations I have found myself wondering how this aspect of 'conscience' can be most effectively played out. Whilst I can absolutely see the role that HR can play I wonder whether the contribution that we need to add is that of seeking to ensure that there is a well developed, systemic way of matters of ethics and principles being brought to the surface.
So I think I agree here with Anton that this is less about HR and more about the role that we can play. alongisde others, in ensuring that the organisational culture/ climate/ system is healthy enough to do this sustainably without a single role or function being considered the 'conscience.'
I am however struck by a comment that someone (I'm afraid I have forgotten who and so can't credit them!) made at a CIPD event I attended - that they could not recall any 'whistle' being blown by an HRD? Is this surprising? Perhaps something that we should be curious about?
So I wonder if a part of our role is to be, as David and Perry suggest, wise obsevers of the stage of development that our organisation is in. How capable are people of raising issues? Have we created a safe, courageous, principled system? Once observed, perhaps we can then decide what role we need to play in the short term but also in the longer term. Short term may mean taking on the mantle of conscience if we feel it is absent. I sense though that the longer term needs to be creating organisations in which everyone, espeically around the top table, takes accountability for this.
9 Nov, 2015 09:01
There’s some interesting debate which is a vital part of Profession for the Future – and these views have been fed back to the team (which I am part of). It’s clear there are some challenges around the lack of whistleblowing and questions over whether ethical decisions should solely fall on the HRDs. Our question back is if there isn’t enough support from within organisations then what else could be done from outside to support your values and ethics when they are tested?
11 Nov, 2015 11:21
I think Laura's argument isn't so much as to say that business ethics is the responsibility of HR, but that HR must take the lead on starting the conversation.
Historically, culture has been defined strategically and then implementation delegated to HR. The obligation on HR leaders is to make sure that decisions that shape and define an organization's culture include making ethics a part of that, and then ensuring that it is embedded in the implementation.
Part of the problem is that "doing what's right" is highly subjective without a clearly-defined ethical framework. What's right for me - given my personal ethical model - may not be right for the person working next to me with a different personal ethical model. Gordon Gekko's "greed is good" was a statement of personal ethics: that the pursuit of self-interest above all else ultimately served the greater societal good. It was a twisted interpretation of Adam Smith's "invisible hand", but in Gekko's fictional context it was a persuasive one that was allowed to evolve because it served the short-term interests of his company.
A company's leadership is measured in profitability, stock price, dividend payments and hard figures, typically on a short-term basis. So we shouldn't be surprised at a willingness to make ethical compromises that deliver in the short-term, whilst leaving long-term consequences to be dealt with by their future selves (ideally when their future selves are, actually, different people). The consigliere* (note spelling) - be it the HRD, CTO or CLO - then takes ownership for the long view.
Unfortunately, a single long-view voice will always lose to a group of short-term voices. Which is why embedding a corporate ethical framework and method in the whole organization is so important. When the short-termists know that they can't push through compromising decisions because there is a robust and transparent method within which their lack of ethics can be exposed and challenged.
HR is typically the service best placed to deliver the sort of method this model requires, but that cannot mean HR being the voice of ethics. Rather, HR is the megaphone for a voice that should come from the ethical crowd.
*Can we please just dwell for a moment on the fact that this is a position in the American Mafia, not renowned for conventional ethics, but who famously espoused a clearly-defined corporate ethical policy known as "omerta"?
7 Jan, 2016 09:38
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