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Early lessons from Wells Fargo: Three ways to prevent getting set up for ethical failure. (2016)

“…Corporate scandals (and) ethical failures are often organizational at their outset.”

Ron Carucci, 13 Sept 2016

Photo by Joe Raedle/Getty Images

“While most assume corporate scandals are the result of devious, greedy people prone to do “bad” things, the reality is that ethical failures are often organizational at their outset. They frequently begin with otherwise good leaders being put into an untenable position when enterprises pursue conflicting goals and ask their leaders to lead with the contradictions those conflicts create.

“Though we know the motivation of the 5,300 employees who opened more than two million fake accounts appears to have been to boost their quotas, the root causes of the Wells Fargo systemic corruption may take years to uncover.  Despite CEO John Stumpf’s claim that these were just bad employees who failed to honor the values of the company, given how long it went on and how many were involved, it’s highly likely we will uncover organizational issues that proliferated and protected the widespread unethical behaviour.” …

Here are three things executives can do to head off unwanted scandal.

  • Solve problems systemically. …scrutinize significant decisions through multiple lenses.
  • Link critical organizational seams… Charge leaders of critical functions to define the value created at their respective seam, negotiate shared metrics, and develop conflict resolution strategies for when decision rights become unclear
  • Clarify decision rights… Knowing which leaders are accountable for which decisions and resources removes the uncertainty many organizations suffer from.

Access the full article here: Three ways to prevent getting set up for ethical failure.

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