MATERIALS BY TYPE
Working In Uncertainty
What is 'risk culture' and how can 'risk culture' be changed?
It's hard to have a conversation about risk and risk management today without someone saying 'risk culture' and the general feeling is that 'risk culture' must be very important. So, what does this phrase really mean, if anything? In this article I take a slightly different approach to this question and to suggesting how 'risk culture' can be changed.
Instead of trying to find a form of words that looks like a pithy definition of 'risk culture' - which never seems to work - this article suggests that we focus on persistent patterns of bad behaviour involving many people that are found in organizations, and it provides an initial list of important ones. Read them and ask yourself if you think eliminating these patterns and promoting better behaviour instead would, in your opinion, be the same as managing 'risk culture' or as near as makes no difference.
As you can imagine, replacing vague abstractions with descriptions of all-too-recognizable behaviour helps us think about practical actions that target the particular people and particular behaviours that are the real problem. Our planning is also helped by understanding better how these patterns grow and sustain themselves, often just by becoming established as normal.
If you need to turn an unhelpful tone at the top into a helpful one, or eliminate ingrained patterns of deception and corruption, or reform management systems to stop them driving bad behaviour, then this more realistic, detailed approach is what you need.
At points during this article there are interactive polls with buttons for you to click. You can answer as many or as few as you like and it's completely confidential. Feedback from people like you is vital for guiding my research and it has given the materials on this website far more relevance and influence than if they were just me giving my opinions.
So, first, here are some persistent patterns of behaviour.
Persistent patterns of bad behaviour
Each of these patterns of behaviour is potentially damaging to the quality of management, including the handling of risk, but they become more serious when they occur repeatedly over time. The drivers of these patterns are many and will be discussed in a later section. You may see the patterns differently or think that I have described some unfairly or inaccurately, but the main question to consider at this point is whether focusing on patterns like these would be a step forward. If you don't like my patterns then you could identify some yourself.
Lies and half-truths
The patterns in this first group involve lies and half-truths, but with different justifications. When groups persistently collude to lie we might expect a number of effects. First, they might extend the areas of their deception beyond the initial focus and begin to lie about more things, including lying within internal management discussions, leading to poor decisions and so poor management. Second, they might expose their organizations to the unpredictable but potentially very serious consequences of being caught lying to consumers, government agencies, and so on.
Snake oil selling: This is selling or promoting something useless for gain. Most people, I'm sure, have had some odd beliefs from time to time. I blush when I think of some of the ideas I believed when I was young, and there are probably some dodgy beliefs hiding in the back of my mind even now. However, thinking that Tarot cards tell the future, or that a bottle of pure water is an effective medicine, or that practicing mental arithmetic will make your whole brain more healthy, is one thing, but making money from people who believe those things is quite another. If you do it knowingly then you are clearly dishonest. More often, people selling and promoting junk are too easily convinced that their product works and then too eager to interpret every shred of evidence in its favour as solid while ignoring or contesting evidence against. Perhaps this economy with the truth and lack of interest in objectivity will spill over into management decision making.
Headline trickery: Advertising creatives are paid to sell. Sometimes they become accustomed to thinking of claims they can make that will sell a product and then checking afterwards to see if they can get away with them legally (at least for a while). For example, imagine you are watching television and in a commercial break you see an advertisement for a skin cream that is claimed to make you visibly younger. It contains "nutrisol X" and apparently 74 of 112 women agreed that it made their skin look younger. You might naturally imagine that this is because of the expensive nutrisol X. Most likely it isn't and the effect is produced by the usual paste in such creams that even the cheapest creams have. Were you lied to? Not legally, because if you listen very carefully you will notice that the advertisement never actually says that the nutrisol X is what produces the effect. It may have hinted at it very strongly, but it just stops short of a direct claim. It's a trick and the advertisers know what they are doing, but this is typical of much advertising as a visit to the Advertising Standards Authority website quickly shows.
Sales culture: For decades in the UK particular companies and industries have been associated with a particularly unpleasant style of hard selling. Products like double glazing, fitted kitchens, conservatory blinds, and life insurance have been pushed by sales people who have been taught a system and motivated to carry it through despite the obvious discomfort it produces for its victims. There's always a special price, coming down from something very high, a limited time, and after much careful calculation and form filling the salesperson eventually reveals the offer. Why this approach has been used for so long is hard to understand. It is so labour intensive it cannot possibly be the most profitable way to sell the products in question.
Advocacy competitions: This is where an organization routinely gives backing to the person who makes the most persuasive presentation rather than trying to assess the proposal itself. It brings into play the apparent 'passion' and 'confidence' of the presenter, among other things.
Reputation hyping: Most people think they are above average. This is just honest bias, but when it comes to getting a job, promotion, or pay rise for ourselves or one of our people within a formal selection process something much more powerful often comes into play. First it's just choosing words to emphasise the good points and de-emphasise the bad ones. Then, knowing that every other candidate is facing the same pressure and at least some are likely to go further, we begin to remove inconvenient information completely and make statements we know are misleading or even false. We assess the abilities of our staff more positively than we should and collude with each other to feel justified in making claims we would never make under other conditions.
Exaggerating to persuade: Once you have people competing in an advocacy competition with their own careers at stake a lot can go wrong. When proposing a project people will then forecast exaggerated benefits, understated costs, and present their forecasts as more certain and reliable than they are. These behaviours directly undermine management of risk, making it harder to even talk about risk when there are people doing their best to deny that there is anything to worry about.
Perception management: The pattern where people openly discuss with each other what they will tell other layers and departments of the organization in order to manipulate their perceptions. For example, exaggerating potential problems to lower expectations, or holding back bad news in order to defer disappointment.
Justifications of bad behaviour
Dan Ariely's theory of cheating is that most people cheat a bit but what constrains us is a sense of our own morality. We cheat only as far as we can justify it to ourselves as acceptable, even moral behaviour. If he is right then perhaps patterns of self-justification can be important in permitting bad behaviour of many kinds. Such patterns might persist in an organization because individuals actually voice their justifications, eventually establishing them as normal behaviour within the organization and allowing others to use the justifications themselves.
Cheating for friends: The justification is that cheating is not as important as doing what is good for your friends. Bad behaviour is justified as something a good friend would do. Cronyism can extend to people outside an organization as well as being a factor within.
Rampant relativism: This is the view that morality is relative, as is just about anything else if it helps to justify bad behaviour. "You may say I'm stealing from my employer, but that's just a point of view. I'm actually just taking a normal part of my remuneration." That's an easy example, but how about a company where managers routinely lie to each other to get their way but the company is still making a profit? If we say their lies are bad behaviour are we imposing some arbitrary standard of 'badness' on them when in fact their approach works for them and so, from that point of view, it is not bad? I would argue that their behaviour means that their company is not doing as well as it would do if they did not lie to each other.
They started it: This justification says that the cheater has been forced into a situation by someone else who cheated first. For example, stealing from an employer might be justified by dwelling on the employer's bad treatment (real or imaginary).
Sharp practice: The attitude that if it's legal then it's fine. This involves continually looking for ways to push the letter of the law to its limit in pursuit of your own interests. Tax accountants who devise cunning schemes to avoid tax legally, feel they are doing nothing wrong, but the consequence of their activities is that governments divert resources to fighting their schemes and write tax rules that are much more complicated than otherwise would be necessary, with costs for us all.
Getting away with it: The attitude that something is ok if you can get away with it. If people are tricked by you then that's their fault for being gullible and not taking precautions.
Short termism: The attitude that it doesn't matter what happens later because that will be someone else's problem.
Elitism and entitlement: The sense that people in the organization, or at least a group of them, are an elite, entitled to good things simply because of that.
Only results matter: The attitude that ends justify means. It also means that, when results are determined by factors outside a person's control, their rewards and punishments are partly a lottery.
Management is generally improved by clear, objective, rational thought using evidence, reasoning, and effective methods. This kind of thinking is often hard work, some people are not very good at it, and sometimes it conflicts with the personal interests of some people in an organization. For all those reasons people sometimes want to avoid this kind of thinking. The following persistent patterns of behaviour undermine good quality management thinking.
Business meeting sophistry: Using any argument in meetings and documents to get your way, including emotive language, euphemisms, distorted presentation of statistics, not mentioning negative evidence, smearing opponents, reliance on authority, and other fallacies (as extensively documented in many books on critical thinking). This is common and rarely discouraged or even commented on, even by a chairperson.
Lazy journalism: This is not a pattern found in many organizations but we can all see it daily on television and in other media. The journalists confuse being critical with being aggressive. They are happy to be rude and confrontational with people they interview, especially senior politicians, but fail to analyse and present information critically. For example, when delivering a story about a research report they will almost never point out whether the design of the research was based on correlation alone and they frequently misquote the all-important precise wording of key survey questions. The failure to report science adequately has been well documented, but lack of critical thinking pervades most news reporting organizations.
Positive thinking: Acting on the belief that if you always have positive expectations they will be fulfilled. Banning talk of problems or delays as defeatist/negative/unhelpful. This directly excludes most activities that manage risk.
Passion is all you need: The belief that only enthusiasm is important. You just have to keep putting in the hours. If you want something enough you will get it.
Pop psychology: Before reading this paragraph please take a deep breath and resolve to be calm. Pop psychological nonsense is so common in our society that it is almost impossible to avoid being taken in by one or another myth, so brace yourself. Left brain versus right brain, positive psychology, Freudian analysis, emotional intelligence, NLP, learning styles - these are just some of the popular beliefs about psychology that are either exaggerated or totally without foundation. They shouldn't have survived at all let alone become accepted facts for millions of people. They have worked their way into corporate life, with dodgy personality questionnaires (e.g. Myers-Briggs) and training courses (e.g. NLP based) being common examples. Pop psychology without solid evidence fuels belief in positive thinking as well as inspiring some silly projects. You can read more about myths like this in Lilienfeld, Lynn, Ruscio, and Beyerstein (2009).
Unquestionable expertise: An organization dominated by experts whose expertise is not allowed to be questioned or challenged. The experts themselves work hard to maintain that impression, covering up mistakes if necessary. Another consequence of this pattern is that subordinates are less willing to share what they know with the dominating experts, leaving the experts less well informed than they could be.
Traditionalism: The idea that something has worked for a long time and so it will always work. Being 'traditional' becomes an end in itself. There is no need to think about alternative courses of action, monitor events, or learn more from experience.
I'm rich so I'm right: A trap for bankers and others whose rewards are unusually high relative to the talent and effort applied. High pay and control of large sums of money are mistaken for evidence that the person is highly intelligent and capable, to the point of being infallible. It's only a small step from there to thinking that even a rich person's unsupported opinions are infallible too, so there is no real need to think.
Boss worship: Each person considering their boss as someone who cannot be criticised and must be treated as faultless, regardless of the reality.
Political correctness gone mad: This phrase is a cliché but sometimes it is justified. Some potentially correct diagnoses of problems and potentially worthwhile solutions to problems simply cannot be discussed due to an overwhelming fear of being seen as giving offence to people who are female, non-white, gay, young, old, fat, disabled, religious or not religious, infected with the HIV, Irish, travellers, poor, and so on.
Sloppy sentimentality: This is the kind of sentimentality that claims that "Love is all you need!", that you can't put a price on human life, and that no pet should be put down. It can block sensible, necessary thinking about difficult problems, such as allocation of resources to healthcare. It can take the form of open hostility or disdain for rationality, with science (reasoned quest for truth) and calculation (accuracy) portrayed as 'cold' and 'inhuman'.
Nonsense presented impressively: Perhaps the easiest way to understand this pattern is to visit the postmodern generator at http://www.elsewhere.org/pomo/. This amazing web page generates an original article every time your browser loads it by putting together tiny shreds of text from real, published articles in the same style. In some respects the articles seem well written by impressive intellectuals, and yet they are meaningless garbage. Terminology is completely out of control and barely any of the sweeping assertions made are supported by reasoning or evidence. It's not just that this material uses special terminology that only a few people understand; not even the writers know what they are saying. This kind of nonsense is common in art criticism and philosophy, but also in business training, business books, and even audit guidance. People start to believe that they should write this way if they are to be successful in their field.
Evidence-proof behaviour: In this pattern an entrenched pattern of behaviour is repeated for a long time after evidence about its effectiveness should have led to it being abandoned in favour of something that works better (or even works at all). This extends to the beliefs associated with the behaviours and these beliefs can live on even longer than the behaviours.
'Politics' is a rather general heading but here is intended to mean behaviours driven by intense rivalry and quests for power. These sometimes involve individuals seeking power for their personal benefit, or because they think that in a position of power they can do more good. Either way, the consequences of the behaviour used to get that power can be considerable.
Corporate fiefdoms and long entrenched corporate wars: In long term corporate in-fighting all actions and reactions are interpreted in terms of the prevailing situation and many are inspired by it. Each faction appears to respond to events in a way calculated to serve its interests and damage those of its rivals, while seeing its rivals as doing exactly the same thing. Think of the Cold War. Objectivity and rationality don't have a chance.
Blame games: Always finding someone to blame for any perceived failing or disappointment, even for gambles that were sensible at the time. People positioning to avoid blame themselves and deflect blame onto others.
Over-riding social cohesion: Fitting in with others in the organization is seen as more important than getting tasks done, and more important than treating customers, suppliers, and other outsiders ethically. Your 'social skills' and political decisions are scrutinised more than your business decisions. Achieving consensus with colleagues becomes more important than being right.
Bullying: Physical bullying and bullying using threats of career damage, or just an angry, threatening manner lead people to behave badly in response.
The spin cycle: The history of spin doctoring goes back a long way, but Tony Blair and Bill Clinton did more than their fair share to raise awareness of it. This pattern of obsessive manipulation of news and public perceptions at times seems to have taken over British politics, and part of this impression may be the tendency for political journalists to report on the thinking behind the spin rather than the underlying issues for the population.
This final category includes some of the most common patterns.
Honest bias uncorrected: Simply the failure to act to limit bias even in honest people doing their best.
Games around reward trigger levels: Rewarding people significantly if their performance reaches a discrete threshold level can produce very bad behaviour. The reward might be a bonus, a promotion, improved prospects, or just keeping your job. The almost inevitable consequence is that people sometimes find themselves in a position where a great reward is within reach if they are just willing to cheat a little. Over time this can become rampant cheating by almost everyone, often with collusion.
Border crossing corruption: You approach a border crossing between two African countries. A uniformed border guard stops you and asks "Do you have any food for us?" The general mechanism here is of people abusing official power for their own ends, perhaps strongly motivated by their personal circumstances.
Boozing buddies: The intended, theoretical communication and influence channels of an organization can be bypassed and subverted by social links formed and maintained outside the office. In particular, workers who head for a bar to drink booze after work (or even at lunch time) can form a group that shares information candidly in a way that is hard to do inside the office. Smoking buddies can work in a similar way.
The isms: Racism, sexism, ageism, etc. Unreasonable disdain for groups of people can damage decision making.
Litigation paranoia: When I was a trainee external auditor I was taught to carry out audit tests, document the results, then document my conclusions from those results. After some years at PricewaterhouseCoopers a new approach was introduced, quite openly. The new rule was never to document conclusions. We were told that analysis of past court cases against the firm had shown that documenting the thinking behind an audit opinion had never been helpful to the firm so it was better not to document our thinking. Software was created that stripped from completed audit files all notes that might have given clues to who thought what and when during the audit. Think of it as pre-emptive shredding.
Excessive hospitality: In this pattern a particularly high value is placed on building relationships with customers, regulators, politicians, and even staff through hospitality ranging from a drinks party to a corporate box at a major sporting event. Alcoholic drinks are usually a feature of this pattern. When I was very young I had a temporary clerical job with the sales subsidiary of a French computer maker that was seeking distributors in the UK. The sales team had just been on an extensive tour of the country wining and dining people they thought might be persuaded to become distributors, but they had made no progress whatsoever. They were fat and red faced. While pausing to consider their next move they placed an advertisement in a relevant trade magazine and in response were contacted by an interested company.
Boondoggling: The wonderful American word 'boondoggle' refers to a project or other policy continued for extraneous reasons even though it should be stopped due to being a bad use of resources. This is typically when a project is struggling and it becomes obvious to many that the project is not worthwhile. It should be stopped but too many people closely involved would lose money and face if it was, so the project carries on.
Bad news suppression: This involves a boss discouraging subordinates from giving the boss bad news. This can extend to not telling the boss about issues and about uncertainty, which undermines management of risk.
With these examples of persistent patterns of bad behaviour in mind it is easier to speculate about typical causes of such patterns. What brings them into being initially, and what sustains them over time?
Economics and self-interest: At the root of much bad behaviour is simple self-interest. With Border Crossing Corruption those corrupt officials might live in poverty if they did not extort food from travellers. At the other extreme of wealth and power, a banker who manipulates a market does so for some kind of personal gain, even if it is not received in the direct form of food.
Attractive memes: Sometimes the problem seems to be that ideas are attractive, simple, and even compelling. For example, theorising about business management has focused for decades on management using targets despite the behaviour that it produces. This approach to management has lived on far longer than an objective evaluation of its logic and results would justify. Perhaps we are seduced by the apparent simplicity of an approach that says you can run a big organization by telling people exactly what results you want and ordering rewards and punishments to motivate delivery.
Competition and mutual expectations of bad behaviour: The feeling that we are in competition with others seems to bring out bad behaviour. We can be motivated to cheat by the thought that others will and if we do not then they will gain an advantage at our expense. Sometimes we assume that our bosses are dishonest and self-interested and provide them with suggested strategies on that basis, hoping they will be thankful. Our expectations about them are then turned into reality by the push we gave to them, not the other way around.
Corporate systems and their often unintended effects: Some popular corporate systems drive bad behaviour and, especially, bad decisions. Targets create unreasonable links between performance and rewards. Formal staff appraisal generates an industry of hype and upwards management. Social skills training programmes turn social behaviour into something to be learned and faked, rather than reinforcing it as a natural outcome of real beliefs and feelings. Business case evaluation rituals create a tendency to reward advocacy by any means rather than objective analysis.
Dominant personalities: In the most extreme case, imagine a bully who starts a company and then runs it for decades, even as it grows and grows. It is easy to imagine the bully's behaviour creating a persistent tendency towards bullying and blame games that may live on for years even after the company founder retires.
National patterns: Some patterns come, not from an individual organization, but from the society in which it exists. For example, the tendency to treat bosses as having a very much higher social status is more common in some countries than in others.
Addiction of individuals: In many countries there are millions of people with mild addictions to alcohol and nicotine. The desire of those individuals for a drink or a smoke rarely leaves them, so business ideas that involve doing the thing they want to do are unreasonably attractive to them. They prefer an approach to sales that involves 'hospitality' and think deals are best done over lunch. The consequences of doing business while slightly or very drunk include wasted time and poor decisions.
Individual differences: People are different from each other. Some are more prone to cheating. Some are more prone to biased or flawed thinking - probably in part because they don't try very hard to avoid it. Stanovich and West (1998) provide some interesting evidence on these differences. Some correlate with IQ scores but others do not.
History, norms, and concealment: Once a pattern of behaviour is established it can gain a momentum of its own. Border guards who once extorted for the food they needed might continue their pattern long after their circumstances have improved. A self-employed life insurance salesman who takes the job out of sheer desperation might later become the sales director of a large corporation and continue with the behaviours that once seemed necessary. Once behaviours become norms they are copied by others and continued. The effort of concealing a behaviour can also perpetuate it. Past cheating needs to be concealed and once a system for suppressing the truth is in place it makes it easier to continue cheating.
Learning delays and social proof: Another reason that patterns of bad behaviour may linger is that it sometimes takes a long time to realise they are a mistake. Many people who might realise the mistake instead don't understand what is going on and simply take the typical behaviour as social proof that the behaviour is good. That means that the few that eventually do realise there is a better way have to overcome the inertia of all those who can't see it and have relied on social proof instead (all the time linking themselves with the entrenched behaviour and now having a reason to protect it and save face).
Lack of correction: One common reason for these patterns starting and persisting is simply lack of any attempt to stop them.
Good patterns of behaviour
Patterns of bad behaviour are all too familiar, but what would we rather see instead? It helps to have something in mind, even though this is a little more difficult than thinking of bad patterns. Rather than offering a list that is just the reverse of the bad behaviours, I suggest a simplified list.
Rational thoughtfulness: Willingness to think carefully, rationally, and open-mindedly at work.
Self-awareness: Knowing one's limitations, understanding self-deception and bias, and understanding it in others.
Fairness: Behaving with the legitimate interests of all stakeholders in mind. Aware of individual interests but not allowing them influence.
No-blame: Willingness to experiment and acceptance of failure as part of that. An understanding that behaviour and results are not always directly or even closely linked.
Would this manage 'risk culture'?
If persistent patterns of bad behaviour could be reduced and good patterns promoted to take their place, would that achieve what you expect from 'managing risk culture'? Perhaps you can think of some differences in principle but would the end result be most of what you would want to see?
Promoting good patterns and stopping bad patterns
If you think that changing these persistent patterns of behaviour is worthwhile then the next question is obvious. What are the levers that can be pulled to produce improvements in persistent behaviours? It depends on who you are, but levers that might be within your reach include those in the following groups.
Reduce opportunities to cheat
Ordinary internal controls: The effect of many traditional internal controls - such as locks on doors, independent checks, and a supervision hierarchy - is that opportunities to cheat are reduced. To take a classic book-keeping example, if a person cannot gain access to cash received and the sales ledger then fraud opportunities are blocked.
Change economic incentives attached to results
Avoiding ulterior motives: Disclosing a conflicting interest is not enough and there is even evidence suggesting that disclosure makes matters worse. What is needed is the reduction of conflicting interests at every opportunity.
Avoiding management systems that drive bad behaviours: The management systems known to produce persistent bad behaviour are targets, especially those with bonuses attached, and competitive presentations (e.g. of a business case for a project, or for a promotion). Removing targets and target-linked bonuses need not mean removing performance-linked pay. The problem is that a large reward is linked to a threshold such that just to the wrong side of the threshold the employee gets no bonus, but just to the right side of the threshold the bonus is received. Instead, a gradual relationship between results and pay can reward good performance without creating to the super-intense motivation that occurs when a person is just the wrong side of a threshold.
Change economic incentives attached to behaviour
Policing and punishments: Decide which behaviours you want to reduce and start looking for them and punishing or warning perpetrators. We are used to this idea for behaviour that is currently a crime, but there are many bad behaviours that are not crimes at present but which we still want to reduce. These include biased estimates of costs and benefits used to help win approval for investments, use of debating trickery in business meetings, and sharp practices.
More policing roles: If you clearly identify the behaviours you do not want then you can make people responsible for policing to make sure they do not happen, or are stamped on when they do. Everyone with a supervisory role becomes a police officer, in a sense. Let the supervisor know that if their group is found to have pressured or deceived a customer, provided biased estimates, or whatever else is relevant then the supervisor will be in trouble.
Rewards: Honest, objective, rational, diligent management is what we expect, but could we do more to reward it? It is obvious that we should punish bad behaviour, but perhaps not so obvious that good patterns are rare enough to be commented on, celebrated, and rewarded explicitly.
Reduce the fudge factor
Dan Ariely's theory of cheating is that most of us cheat only as far as we can do so without feeling dishonest. The extent of cheating that we can accept in ourselves before feeling that we are doing something wrong is what he calls the 'fudge factor' and it varies from situation to situation, and from person to person. In one of his studies, for example, creative individuals tended to be better at creatively justifying their behaviour and cheated more.
Clear rules with operational definitions: The idea is that, when rules are to be drafted, they should be written so that alternative interpretations are eliminated or at least harder. This will usually be harder to achieve if the preference is for general principles rather than specific rules.
Personal policing: If writing rules that are hard to misinterpret is not acceptable then an alternative is to entrust interpretation to a monitoring group (who may document their interpretation of the principles in detail) who then search for people whose fudge factor is too big and personally warn them off. The UK tax authorities do this and most people accept their warnings. In everyday office situations it is often better to talk to an individual who has done something you do not want to see again than to write an email to everyone introducing a new rule that will inconvenience and insult everyone, including the many who never would have performed the unwanted behaviour.
Timely reminders: Most of us have a good understanding of what ethical behaviour is. The problem is that we don't always recognize that this understanding is applicable. Ariely has shown that reminding someone of ethics just before they are tempted to cheat has a dramatic effect on the extent of cheating. Timely reminders could be used in many situations and range from signing the top of a form to say we will answer its questions honestly, to saying a prayer before a meeting, or being told that a meeting is being held under the ethical code of the company.
Making things a moral issue: We often fail to classify bad behaviour as unethical even when it is. If an alternative interpretation of a situation is normal in our organization then that mistake is particularly likely. For example, if overstating certainty about the benefits of a proposal is normal in your organization and even seen as a desirable social skill then we do not see it as lying, even though it is. However, if a person, especially someone in authority within the organization, says the behaviour is lying and explicitly states that it is an ethical matter, then that might activate our understanding of ethics and trigger a very different pattern of behaviour.
Making the link to money: Ariely has shown, through a series of experiments, that cheating is low when it is directly related to cash and greater when the gain is only indirectly valuable. For example, people will steal a bottle of cola more readily than they will steal the money to buy a bottle of cola. They will cheat more for tokens that can be exchanged for cash than they will for cash itself. This is worrying because so many bad behaviours in organizations are far removed from cash. We think "What does it matter that I exaggerated the benefits of our product to that customer? Everyone does it." Indirectly, the lie was to make a sale, to increase personal sales figures, to earn a commission, a bonus, or pay rise, which will be received into a bank account and ultimately spent by credit card, perhaps with cash never being involved at all. Perhaps there are ways to make the link to money more explicit in situations where we have habitually ignored it.
Timely triggers of awareness: Two other tactics that have been shown experimentally to reduce cheating probably work by making us aware of ourselves or aware of others. One is to place a mirror in such a way that, at the moment of temptation or just before, we see ourselves in it. The other is to place a picture of eyes so that we see them at the appropriate moment.
Education: Another of Ariely's studies suggests that even intensive, week long training in academic integrity has no measurable effect on cheating just two weeks later. (In comparison, timely reminders of ethics are far more effective.) However, some educational interventions might be effective. People who are expected to police behaviour may benefit from training in recognizing and responding to bad behaviour. For example, people whose job includes chairing important meetings could benefit from training in how to recognize and stop unfair debating tricks in meetings.
Moral rebooting: Another of Ariely's suggestions is that, when a group has slipped into a persistent pattern of unethical behaviour, an effective way to get out of it is to talk about it openly and make a very high profile shared pledge to go back to good behaviour from that moment on.
Removing bad examples: If the boss behaves badly then that is likely to set an example that is copied by others. Unfortunately, bad role models also come from beyond organizational boundaries. Television and other news/entertainment media spread stories of real and fictional cheating. For example, in the UK the long running reality TV show The Apprentice frequently shows bad behaviour by contestants and by the show's celebrity businessman Lord Sugar. In the past Lord Sugar has given a well paid job to a man who lied on his CV, indirectly encouraged contestants to be more aggressive in the boardroom, and given instructions for tasks that encouraged unethical behaviour and occasionally produced behaviour that even he thought was unacceptable. The attitude of most people participating in the show, and the linked programme "The Apprentice - You're Fired", is that in business you have to be 'tough', where 'tough' is a euphemism for 'dishonest and bullying at times'. Isn't there an opportunity to close this series and start something more heart-warming and appealing?
Good examples: Setting a good example helps, especially when it is done by prominent people.
Reduce honest bias: There are many biases that happen as a result of the way we think and even an honest person can be affected. However, techniques have been devised to limit some of these biases and more research might help devise others. Sometimes just asking a question in a slightly different way helps.
Selecting people: In future we could do more to select people for responsible positions on the basis of their ability and desire to think rationally and fairly.
Sharing real views so that bad expectations are removed: Some patterns of persistent bad behaviour are sustained because most people underestimate the honesty of others. Their actions, on the basis of that belief, sustain the very behaviours that many people are complaining about. For example, many middle managers believe that senior management do not want to hear about uncertainty. When asked, senior managers say they do want to hear about it. Middle managers need to know this.
Who can do what?
Clearly people in different positions can do different things. Television news producers can pull different levers to government ministers, and people in lowly positions have different opportunities to act to people in high positions of power.
Nevertheless, everyone can contribute to a better world, even if it is just by controlling their own persistent behaviours for the better.
This article has provided just the bare bones of an approach to thinking about 'risk culture' that turns the problem from being abstract and general to being recognizable and specific. With examples of persistent patterns of behaviour it is possible to think about what causes them and what could change them. From this it can be seen that many familiar tactics are relevant and helpful even if we don't usually think of them as 'cultural'.
If you want to do something effective about 'culture' in your organization then please try thinking along these lines about what is happening in your workplace and what could be done to improve things.
Ariely, D., 2012. The (honest) truth about dishonesty. London: Harper Collins Publishers.
Lilienfeld, S.O., Lynn, S.J., Ruscio, J., Beyerstein, B.L., 2009. 50 Great Myths of Popular Psychology: Shattering Widespread Misconceptions About Human Behavior. Wiley-Blackwell.
Stanovich, K. E. and West, R. F., 1998. Individual Differences in Rational Thought. Journal of Experimental Psychology: General, 127(2), p.161-188. Available at: <http://keithstanovich.com/Site/Research_on_Reasoning_files/Stanovich-Ind-Dif-JEPG98.pdf> [Accessed 16 October 2013].
Hundreds of people receive notification of new publications every month. They include company directors, heads of finance, of internal audit, of risk management, and of internal control, professors, and other influential authors and researchers.
Please share: Tweet
Words © 2013 Matthew Leitch