So how DO you talk about ethics?

Last week I wrote about whether ISO 9001 should be revised to address questions of ethics. In reply, Krishna Gopal Misra of Qualitymeter.com published a detailed essay on LinkedIn about the role of ethics in relation to any management system. I am grateful for Mr. Misra's essay, which makes the important point that ethical principles are not so much a part of a management system as logically prior to it. A management system tells you how to organize in order to get what you want; but it cannot tell you what to want. That is the job of your Vision, and thereby of your strategy and policies. Without a Vision, the management system itself is blind,* and the organization is directionless. At that point there is nothing to stop the organization from doing very bad things, and Mr. Misra gives some chilling examples in his essay. 

What should you do instead? If you want to avoid the moral aimlessness that Mr. Misra warns against, how do you talk about ethical principles in your organization if not in the management system? Or to put the question another way, the management system defines a framework for how to run your organization: where in that framework do your ethical principles belong?

They have to come right at the beginning, so that they become ground rules to inform everything else. This means that your ethical principles have to be part of the Context of your Organization (COTO). They have to be among the fundamental requirements that you are in business to satisfy in the first place.

I used to work for Robert Bosch; and while I normally avoid discussing previous employers by name, I always admired Bosch's explicit and stated commitment to ethical behavior. This commitment grew out of the deep personal beliefs of Herr Bosch himself, back when he was still alive and steering the company personally. He once said—in a remark that every Bosch employee must surely know by heart—"I would rather lose money than trust." (If you are interested, you can find a copy of the Bosch Code of Business Conduct at this link here.)

And it has to be more than slogans. In order to be worth anything, a policy of corporate ethics has to be reinforced with action at every turn. Bosch promoted its ethical policies in several ways. One prominent way was through a corporate training program, which required every employee to take classes on specific topics. These classes repeated at stated intervals: some every year, or every two. The longest interval between repetitions was three years. The classes themselves covered topics like recognizing and avoiding conflicts of interests, or respecting the principle of legality in all daily work. Mr. Misra explained that sometimes companies resort to bribing government officials to get what they want; Bosch had a separate class all about how Bosch employees are strictly forbidden to engage in bribery. The instructors even explained that there are some countries in the world where bribery is expected as a normal part of doing business; and they freely admitted that Bosch's strict anti-bribery policies make it harder to compete in those markets. When someone asked "So what are we supposed to do in those countries?" the instructors just smiled and said the only thing to do was to make the products even better, so they would sell despite interference from disgruntled government officials who expected bribes but didn't get them.

No training program will ever turn men into angels. Somewhere along the line, somebody will make a mistake and do something wrong—even at Bosch. When that happens, it is important to take swift and visible action. You may remember back in 2015, when news broke about the Volkswagen emissions scandal (sometimes called "Dieselgate"). Volkswagen had been caught using software to circumvent laboratory emissions testing, so that their cars could be passed by the EPA and sold into the United States even though their NOx emissions in normal driving far exceeded the legal limits. Volkswagen was the company that perpetrated the illegal activities, not Bosch. But Bosch had sold them the software, a decade earlier. (Bosch even warned them not to use the software in the way Volkswagen used it, because that would be illegal.) 

When it became known what had happened, the Bosch Board of Directors addressed Bosch's (apparently peripheral) role in the scandal by issuing a new Product Development Code. This code had several parts; but among other things it prohibited Bosch from designing any product for any customer with features that a reasonable engineer could expect that customer to use illegally. If a customer asks for such features, even if the features themselves are (strictly speaking) perfectly legal, Bosch is now required to reply, "I'm sorry, Mr. Customer, but we can't do that for you. If that's what you want, we don't want your business." To implement this new Code, Bosch required training classes for every employee worldwide involved in product development, product management, project management, engineering, marketing, or sales. Bosch also required explicit changes to the product release process—enforced by an independent Quality organization—to ensure that the Code has been complied with before any product is released to the market. (This news article discusses Bosch's rollout of the new Product Development Code.)

That's what I mean by "swift and visible action." And it was taken, remember, to respond to a scandal where Bosch was only peripherally involved—so that in the future the company can avoid even the appearance of illegal or unethical behavior.

It's not easy, but it's possible. However, to come back to the original point, these commitments belong in your COTO, along with information about the kind of work that you do and who your major customers are. These commitments are part of the content that is managed by the management system, and not part of the structure of the management system itself.     

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* This pun was not exactly intended, but I think it is pretty much inevitable in the present discussion.            .