#Speak-up series 4: How to prepare and conduct a speak-up conversation

Ethical problems can be complex and difficult to resolve. If we want to address an ethical issue with another person, we can easily give that person the feeling that we question their moral identity (“You are a bad person!”). Therefore, we have a tendency to avoid the topic, if we have not practiced facing them effectively before. That is why preparing, practicing and rehearing a speak-up conversation is so important. Yes, I do recommend that you rehearse your critical ethics conversation with a trusted person.

Here is a guideline on how to prepare well:

  • Research the facts:
    It is crucial to not prepare a meeting on a sensitive issue, if you are already convinced that the other side has bad motives. The other person will sense this and automatically get defensive. Thus, effective solution finding is blocked. So do look at the facts like in a documentary film and try to understand the other side without judging. No interpretations, no judgement! Imagine you are a doctor and need to come up with a diagnose. For example: Somebody cuts you off your parking spot. You assume that the person is a selfish jerk. Then this person comes up to you and apologizes: His wife is in the shopping center and needs to go to the hospital. (This process of automatic judgment of others’ behavior is called the «Ladder of Inference». You can watch this TED video clip that explains it beautifully)
  • Improve your power:
    Show your boss that you are a valuable and loyal employee not a trouble-maker and that you have a legitimate concern. We all can improve our power even in the most powerless of situations.
    This anecdote about Nelson Mandela perfectly illustrates this idea: When Nelson Mandela was in prison on Robben Island he got up every morning at 4 a.m. to do his boxing exercise. He was a trained boxer and staying fit gave him a source of strength and dignity in his unfree and humiliating prison situation. He also had studied all the rules and policies of the prison organization. He knew all his rights and privileges but also the limitations of what his guards were allowed to do. This enabled him to cite the exact numbers and wordings of these rules in situations of conflict.
  • Proper timing and place:
    We all know that there are times where we are just not receptive for critical comments. Think about the time when you wanted to talk to your patents about a bad grade…You did not do that when they were tired, in a bad mood or watching the news. Chose the right moment. Furthermore, private meetings are better than team sessions. If possible, meeting at a neutral place can help, too.
  • Problem and solution always go together:
    Try to already have ideas on potential solutions for the problem when you address an ethics and compliance issue. For this, you need to have thought through possible options, consequences and their pros and cons.
    If you do this well, addressing your boss can actually be an opportunity: You show that you care about the success and well-being of the company and want to avoid unethical decisions and prevent harm.

If you prepare your speak-up talk like this, you will already feel much more confident and professional, than if you just stumble into your boss’s office and denounce an ethical problem.

Let’s now see what is important during the speak-up situation:

  • Show up with confidence:
    Sure, voicing an ethics and compliance topic with a colleague or even your boss can be scary and challenging. That is exactly why you need to show up with confidence, because otherwise it will be much more difficult to be taken seriously and convince others of your arguments. Here are some techniques that are helpful: Speak slowly, avoid qualifiers (like actually, only, I just thought…), take breaks to think, don’t be afraid of silence, silence is your friend.
  • Understand the other side first… If you start such a sensitive conversation with an accusation, the other person will quite naturally shut down and become defensive. This is completely normal. Anybody would do that. Therefore, it is much more effective to start by asking questions like:
    • «Have you thought about…?»
    • “Can you help me understand…”
    • “Why have you decided…?”

Trying to fully understand the other side first and concentrating on a common interest is crucial, because it is possible that the other side just did not think about the ethical dimension of a situation (e.g. due to time and performance pressure). If they just overlooked the problem and you already accuse them of being an unethical person, unnecessary damage is done and the conversation is over.

  • Explain your perspective:

Only if you have completely understood the other side and you still think that there is an ethics and compliance problem, share your opinion in a non-accusative way. You could e.g. say:

  • “I want to share my perspective.
  • I’m worried /uncomfortable/feel uneasy about….”

Ideally, the other person will see your point and be open to finding a better solution and/or change her behavior.

  • Agree on next steps:

In order to make sure that your brave act of speaking- up will have the wanted consequences it is a good idea to agree on the next steps necessary.

  • Have a withdrawal strategy ready :

If the other person is not responsive, you can say things like:

  • “I just asked because I’m concerned about you and I wouldn’t want you to get in trouble” or
  • “I wanted to be sure we protect the organization’s reputation.” (see Amy Gall in the resources below)

This way you can withdraw gracefully from the conversation and decide if you need to escalate the issue to your boss, your boss’s boss, HR or Compliance.

In summary, we see that speak-up is not easy to do, but good preparation and a confident and respectful delivery help. It is crucial that the person who dears to speak up concentrates on a critical but respectful mind-set that focuses on common goals.

At the same time it is clear that the most skillful speak up communicator will fail if the leadership and the culture of an organization does not encourage a climate of open feedback. As we have seen in recent corporate scandals like Volkswagen or Wells Fargo, an organizational climate characterized by fear, high performance pressure, and an authoritarian leadership style is poisonous for speaking-up.

Therefore, the creation of a true speak-up culture always has to start at the leadership and corporate culture level.

Resources on Speak-up:

 Books

  • Peter T. Coleman and Robert Ferguson Simmons: Making Conflict Work: Harnessing the Power of Disagreement, 2015
  • Shari Harley: How to Say Anything to Anyone: A Guide to Building Business Relationships That Really Work, 2013
  • Kerry Patterson, Joseph Grenny : Crucial Conversations Tools for Talking When Stakes Are High, 2011

Articles

Prof.-Bettina-PalazzoAuthor: Dr. Bettina Palazzo
Professor at BSL

#Speak-up series 3 – Why coworkers do not speak up on ethical issues

Speaking up on topics of ethics and compliance is hard to do. Already speaking up when you disagree or have bad news can be difficult in organizations. It is even more difficult to speak up on sensitive ethics and compliance issues. Usually, we have not learned to say the unpleasant truth.

Already as children, we learn that aunt Betty gets hurt, if you tell her frankly that her new hairstyle is a disaster. You certainly do not tell cousin Mark that you think he is a cheat when he boasts about his clever «tax saving» strategies.

We have learned to lie. We have learned that candor about the unethical behavior of others (especially if they are more powerful as us) might ruin the relationship.

Furthermore, ethical problems are often not black or white, but grey. This makes it difficult to draw the line, which can make us more insecure.

Finally, people hesitate to rock the boat if they have the impression that nobody else seems to notice. This is known as the bystander effect – a social-psychological phenomenon that refers to the fact that if there are many bystanders in an emergency situation, the likelihood of one person intervening and taking action goes down. This is because everybody is expecting the others to react first (diffusion of responsibility) and nobody wants to stand out in the crowd. The effect is amplified if the situation is ambiguous and bystanders are unsure if an intervention is socially adequate. This is exactly what is often the case in situations where ethical judgments play a role. (For a great illustration and explanation of the bystander effect, watch this video with Philip Zimbardo and the Heroic Imagination Project).

Consequently, silence is contagious. You observe that nobody else is speaking up, so you do not do it yourself. That is why it is so important to create a corporate culture where speaking up is normal and where employees have seen others speak up without negative consequences.

Because it often does feel unpleasant to speak up, we come up with all kinds of rationalizations, why it is ok not to do it:

  • “It’s not a big deal.”
  • “I don’t have all the information.”
  • “This is someone else’s responsibility.”
  • “This must be the way these things are done (at our company, in this region, in our industry, etc.)”

In reality, this a sure sign that you should actually speak up.

A survey among European companies showed that only half of the people that observed ethics or compliance violations spoke up (Source: Daniel Johnson : Ethics at Work: 2015 Survey of Employees – Continental Europe)

We all know these fears are real and still there are often people who dare to speak up.

What do you think? Who are these people? What is different about them? Do they not have these fears? Are they maybe very brave heroes? Are they maybe in a more powerful position?

No.

People who do speak up on important concerns do this because they have spoken up before. The degree of fear, power or bravery play no important role. It is the practice that makes the difference!

Speaking up is an ability that can be trained like a muscle that gets bigger with exercise. Addressing sensitive issues is not something that comes natural to most of us. However, there are effective ways to do this without jeopardizing our career or our relationship with our boss.

How to prepare and conduct a speak-up conversation with confidence and courage will be the topic of the next and final part of this blog post series on speak-up.

Stay tuned and watch for the next episode of the speak-up series!
Prof.-Bettina-PalazzoAuthor: Dr. Bettina Palazzo
Professor at BSL

The Panama Papers

If in the past two months you haven’t heard about the Panama Papers then you must have actually been living under a rock.

The Panama papers are the largest leak in the history of data journalism. 11.5 million documents, 2.6 terabytes of data, have been leaked to the journalists of Süddeutsche Zeitung, a German daily newspaper. There was so much data that the journalists shared the information with the ICIJ, the International Consortium of International Journalists, who in turn shared it with 400 journalists from 80 different countries. What is surprising is they managed to keep the information under raps for a whole year while they sifted through the data. Only in April did the first articles start being published regarding the Panama Papers. These documents exposed the rich and powerful who use an intricate network of offshore companies to hide their wealth from authorities and the public eye.

Almost everyone who is famous or powerful were implicated. From Lionel Messi to Putin, from European politicians to the Middle Eastern ruling class. Some of the most interesting stories don’t involve despots or dictators but democratically elected politicians from Europe. There is the case of David Cameron who owned shares in his late father’s offshore investment company or Sigmundur Gunnlaugsson the prime minister of Iceland who failed to disclose that his wife’s offshore company owns bonds from three defunct Icelandic Banks that his government is negotiating with, a clear conflict of interest. He was the first casualty of the leaks as he was forced to resign last month. There is now a famous interview of him walking out when a journalist asks him about his wife’s company.

Fans of Real Madrid can rejoice that at least their golden boy, Cristiano Ronaldo, wasn’t mentioned in the Panama Papers unlike his counterpart in Barcelona who has been mired in tax evasion court cases since last year. Messi was already in trouble with the Spanish tax authorities. He is accused of evading tax in the tune of 4.5 million Euros that he owes the Spanish Government. The Panama papers reveal just how he managed to hide his money. It was shown that from 2005 Messi sold his image rights to offshore companies situated in different South American countries. If any company is interested in using Messi in their advertising, then they will have to pay the fees to these offshore companies and the Spanish Government can only look on. Of course, Messi and members of his family own these offshore companies so essentially Messi sold his image rights to himself.

But some of the leaks show a very dark side to offshore companies. Documents showed that from 2011 to 2013 the Syrian government was using offshore companies, provided by Mossack Fonseca, to avoid sanctions and purchase fuel needed by the Syrian air force. Mossack Fonseca’s response “We did not know that Assad and his allies were using and abusing our services”. The Panama Papers also exposed a scheme by Heritage Oil Corp; a US based Oil Company, to avoid paying taxes to the Ugandan Government. In 2010 Heritage Oil sold 50% of its stake in Ugandan Oil fields to a local company for $1.5 billion. Under Ugandan tax law, Heritage Oil owes the Ugandan Government $400 million in Capital Gain tax. So what does Heritage Oil do? Thanks to Mossack Fonseca all it took to avoid paying its Capital Gain tax was the switch of an address from the Bahamas to Mauritius who does not have a capital gains tax. The Ugandan government has been in courts trying to force Heritage Oil to pay what its due ever since.

Will the Panama Papers spell the end of offshore tax heavens? Now don’t get me wrong, establishing an offshore company is a completely legal practice. But the leaks showed that 95% of Mossack Fonseca’s business was to help its clients hide assets from the tax collector.

If the subject interests you, I suggest visiting Sueddeutsche Zeitung and ICIJ’s website regarding the leak. If you enjoy reading spy thrillers, works of fiction or fantasy then the Panama Papers are for you. The Panama Papers expose CIA operation in the 80’s like the Contra affair where the CIA used offshore companies to sell weapons to the Iranian government.

Are you a football fan? Other than Messi the Panama Papers exposes even further misconduct by FIFA. One member of FIFA had established alone over 400 offshore companies.

Are you a World War II buff? The Panama Papers shed light on a painting that has been missing for 52 years since the Nazi occupation of Paris. Now it has surfaced right here in the dry-dock of Port Franc in Geneva Switzerland. The painting is being held there as the grandson of the original owner sues the current owner, Helly Nahmad, the famous American art dealer.

I can continue with the story for another 10 pages but I don’t want to rob you, the reader, from that “Ooooh!” moment. Truly the Panama Papers are stranger than a work of fiction.

Author: Abdullah Kaki, Master in International Business student, 2016

 

How to negotiate for Ethics in a Crisis: The Greenpeace-Nestlé case

In March 2010 food-giant Nestlé had to learn the hard way, how to (not) react to a hostile NGO attack: Greenpeace had released a video that made the link between palm oil used in Nestlé’s Billion-Dollar-Brand KitKat and the destruction of rain forests in Indonesia that kills Orangutans.

http://www.greenpeace.org/international/en/campaigns/climate-change/kitkat/

The video was shocking and went viral in no time. Nestlé’s first reaction was to prohibit Greenpeace to show the video on the internet. A bad move in the world of social media, because this even multiplied the interest in the video. This was probably even wanted by Greenpeace because consequently the campaign gained an unbelievable momentum: Internet users kept sharing the video and as a sign of solidarity even used the logo of the Greenpeace campaign (the KitKat brand logo modified into Killer) as their Facebook profile picture.

Of course, Nestlé did not actively kill orangutans, like the video suggested. The problem was created deep down in their supply chain. Palm oil is cultivated in South-East Asia and it is an ingredient of about 50% of all products that we buy on a daily basis: Shampoo, cookies, lipstick, ice-cream. It is virtually everywhere. It is cheap, it grows fast, it does not have a strong taste, it keeps chocolate solid at room temperature. One hectare of palm oil will give you six tons of oil. In comparison: one hectare of soy only generates a yield of one ton of oil. No wonder the world’s hunger for palm oil is ever increasing. Consequently, cultivators of palm oil actually do cut down rain forests in order to set up huge mono-cultural palm oil plantations, thereby destroying the habitat of orangutans. However, they also lift people out of poverty and build schools and hospitals. Palm oil and deforestation is a classical « wicked problem », i.e. it is complex, controversial, value driven, concerns many stakeholders and spans many domains (economic, social, political, legal, ethical). This is why such problems are very hard to solve.

In my class « Business Ethics and Negotiation » I confront my students with this case and then they need to figure out in a group work what had gone wrong in this case and develop a strategy for what Nestlé should do next. I ask them to imagine that they are the top-notch Ethics and CSR consultant and that they need to convince the Nestlé board.

This spring we had the great pleasure and privilege to actually receive the debriefing for the group work form the real-life world class CSR consultant who had helped Nestlé to cope with the KitKat crisis: Scott Poynton from The Forest Trust, a non-profit organization, that helps companies to improve their supply chains.

Guest-speaker Scott Poynton

Guest-speaker Scott Poynton

Scott is a hybrid between an activist and a consultant: He had realized that fighting deforestation and other sustainability disasters was more effective with companies than against them. Consequently, he became a “critical friend” to corporations in environmental trouble. Scott has helped some of the world’s leading companies to transform their supply chains for the better.

That made him the perfect mediator for Nestlé: He understood the problems multinationals have in keeping their supply chains out of trouble and he also is a trusted person at Greenpeace.

Scott shared with us that companies when being attacked by an NGO like Greenpeace often have trouble understanding the issues. This certainly was the case when Nestlé was attacked. The Nestlé top-management tried to explain to the Greenpeace spokesperson of the campaign on the phone that the company was doing a lot for the environment. Greenpeace campaigners know this kind of reaction and they usually react by saying: « They do not get it. They need more pain. » And they did get more pain, when Greenpeace campaigners dropped from the ceiling and unfolded banners during the Annual General Meeting.

This is why Scott’s first lesson for companies under NGO attack is to really understand what the issue is and what your responsibility is.

The Forest Trust helped Nestlé produce and implement « Responsible Sourcing Guidelines » with the objective to avoid sourcing palm oil that was linked to deforestation.

It turned out that many of my students’ good suggestions for change were too long-term to really help Nestlé out of the acute crises they faced: Reforestation, finding a substitute for palm oil are all good ideas, but they take too much time. Nestlé needed to get its valuable brand KitKat out of the negative headlines quickly and reach an agreement with Greenpeace that they would give them a break in the campaign.

In order to do this Scott’s second lesson is: Find common ground. This is easier said than done. The worlds and mind-sets of NGos and companies are often quite contrary. A company fighting to save the profits of very successful brands like KitKat notoriously have trouble seeing the ethical issue hidden somewhere in the product’s supply chain. At the same time, for NGO activists it is very hard to understand how you could not see it. This creates tensions. Then just throw in some pride and ego and the fact that in a corporation nobody wants to be blamed for these kinds of messes and you have an explosive mixture for a first negotiation meeting.

This is why, for Scott, one of the most important things (yes, this is lesson Nr. 3) in negotiating in heated situations is to start with the values of the persons involved. If you want to mediate between conflicting parties, you always need to genuinely believe that your negotiating partner is a reasonable, rational, and decent person. If you enter a sensitive negotiation already convinced that your counterpart is mean and evil, they will sense this instantly and the necessary basis of trust cannot even be started to be built.

Scott’s stories show very nicely that if you want to negotiate for issues around ethics and sustainability, you cannot use the standard “I win – you lose” approach to negotiation. In this approach, we only divide the cake and try to get the biggest piece of it. This does not work, when you are dealing with “wicked problems”. In these cases, concentrating on positions only leads to impasse, misunderstandings, blaming, and zero-sum games that nobody can win.

If you want to successfully negotiate conflicts around wicked problems, you need to concentrate on interests and try to create a larger cake for all parties involved. Nestlé was not interested in deforesting Indonesia and killing orangutans. They are interested in having a well functioning supply chain for good quality palm oil. In order to find out the interests of the other party, you have to stay open and not judge the other side. You have to ask the right questions to understand them, listen carefully and then you can find common ground.

Thank you, Scott, for bringing to life what my students have learned in theory and negotiation role plays in class in a way that they will remember every time they will eat a KitKat.

Prof.-Bettina-PalazzoDr. Bettina Palazzo
Professor at BSL

Business Ethics Case of the Week: The Facebook-WhatsApp Deal

Last semester, my students gave me feedback that they wanted to discuss more up-to-date business ethics cases. This inspired me to introduce a new feature to my class in “Business Ethics and Negotiations”: the Business Ethics Case of the Week (BECOW). 

The task of the students was to find, research, and present an interesting business ethics case each week. They had to prepare a short presentation where they describe the situation, analyze the case from an ethical perspective (What would Kant say?), identify the ethical problem or controversy (e.g. injustice, discrimination, corruption), and express their own opinion and come up with possible solutions for the case.

Continue reading

Sneak Preview to Business Ethics and Negotiations

In my course about Business Ethics and Negotiations, I like to use film clips. Today we have so many great sources for this kind of learning input. I am, of course, a big fan of TED talks. Also RSA Animated has excellent material.

In order to give you a sneak preview to my course, I would like to present a selection of the most interesting and fun ethics flicks that are used:

Rational Moral Theory…

At the beginning of this class we will learn some basic principles of ethical decision-making. We will learn about the German philosopher Kant and about the Utilitarian approach to ethical decision making. Continue reading

The Legal Aspects of Halloween

Halloween night 2013 is now history, at least in this part of the world. Having seen the traditions “here” (in various parts of Europe) and “there” (in WI and NY, US), I might suggest a clear difference in approaches and “ambitions”. Nevertheless, globalization evens some of the differences out, as small “gangs” of young witches and devils are approaching neighbors in Geneva and Lausanne, making the latter get involved in search for sweets, nuts, fruits and candies, if any, in their apartments; as the companies and schools, in promoting diversity and enriching their “social” (or “entertainment”) programs, incorporate Halloween elements in their agendas; or as friends gather together, having found a new, creative reason to party. Continue reading