Rules surround us each day and drive more and more of what we do. Sarbanes-Oxley, HIPAA, ever-changing tax codes, employment laws and local statutes--the list goes on and on, and that's before considering your own internal policies and procedures.
And yet, you and everyone on your watch are somehow miraculously supposed to remember every one of these mandates and act accordingly. In fact, any of your employees running afoul of these rules and laws—no matter how many and how complicated they are—can easily set the scene for a full-tilt legal, public-relations or financial catastrophe. All the while, as a construction business owner, you are supposed to sign off on everything that happens in your company, vouching that, in fact, every "i" has been dotted and every "t" has been crossed. Suffice it to say that the stakes are enormous if inappropriate behavior or judgment occurs under your leadership.
So why would you want to take it upon yourself to add a corporate code of conduct and create an additional document that would require you to monitor its enforcement? Actually, a well- written code of conduct reduces all kinds of infractions while making management both easier and more effective. This is because such a code will help employees be better equipped to monitor their own behavior while simultaneously giving supervisors a new set of extremely clear behavioral expectations for their employees. Those expectations, because of their clarity, will often make it easier to evaluate the appropriateness of employees’ behaviors on any task and at any point in time.
What Corporate Codes of Conduct Usually Say (And Why It Usually Isn’t Really Worth Saying)
Ask ten companies for their codes of conduct, and at least half—and probably more—will tell you that they don’t have one. Those who have one will show you wildly different types of documents, few of which actually provide much value to their company’s operations. Here are the most common types I see and why they provide so little value:
1. A slightly elaborated series of excerpts from the company's human resources handbook—This type of code is, in essence, a list of rules deemed critically important to whoever happened to write the code. Sometimes, it also lists the consequences for breaking the rules. My concern with this type of code is if the rules are already explained in the human resources handbook, why do they need to be somewhere else as well? If your company has a human resources handbook, everyone should sign off on having read it and that should be the end of it other than periodic training on those areas where updates and reminders are deemed helpful.
2. A document specifying that senior managers and executives are held to a high standard (or, sometimes, a higher standard than those down the administrative line) and elaborates on their essential fiduciary responsibilities—Clearly, senior managers and executives do need to be held to a high standard, but that is for the purpose of modeling appropriate behavior from the top down, not because everyone else is exempt from knowing and following the rules. Saying that there is a different standard for those at the top unintentionally sends an awkward and unfortunate message that behavior elsewhere in the company isn’t as significant. However, wouldn’t we all agree that everyone’s behavior needs to be in line to reduce legal and ethical risks, as well as to maximize success, not just the behavior of those at the top?
3. A brief, feel-good document saying how important it is for everyone to follow the rules and how great it is that everyone is so willing to do so—Feel-good documents are a great way to boost some individuals’ morale. However, the purpose of a corporate code of conduct is to help employees at all levels of your company know what is expected of them and to give them tools to assure their compliance with the rules and do what is ethically right.
What Is In an Effective Corporate Code of Conduct? (And Why It’s Probably More Important Than You Think)
If you want a code of conduct largely because it will look good to oversight agencies or because it might prove to be the foundation for some terrific marketing materials, any of the types mentioned above might actually work pretty well. However, if you want a document that will really help move your business forward, you’ll need to take a very different approach.
Ultimately, a well-written code of conduct should help clarify behavioral expectations for all employees while simultaneously helping them do a good job of meeting or surpassing those expectations. In other words, it needs to be a powerful, if simple, document that will help employees learn how to meet your business goals and expectations through their behavior. To do this, a maximally effective code must address not only the rules but also the reasons for the rules, your corporate values and the types of behaviors that will help bring your company’s values to life.
It All Starts With Values
Probably the single best thing you can do to assure outstanding employee behavior is to develop a simple but effective values statement. Your values statement can then become a part of your code of conduct or remain a separate document referenced by the code of conduct.
The values statement can list anywhere from four to a maximum of ten values that define your company's purpose, goals and the essential characteristics of appropriate behavior. It is also modeled and reinforced at all times by managers and executives.
Your values statement should be written in such a way that any employee can use them at any time as a kind of filter through which to judge the appropriateness of their behavior. For this to happen, you need to steer away from both overly broad-sounding values unable to be used as a good filter, as well as unenforceable ones (i.e., “We believe in doing good things for people,” or “We like our customers.”). Instead, focus on such values as honesty, responsibility, customer service, etc. Every one of these can be used to measure the appropriateness of one’s behavior (e.g., Is this honest? Yes or no. Does this represent taking responsibility for my actions? Yes or no, etc.).
One measure of a well-written values statement is that it is extremely easy to remember so that it can easily be brought to mind at any time during the workday. Hence, a shorter list of specific values is better than a longer list of vague ones. Another measure is that each stated value should be able to be simultaneously used as both a tool to evaluate behavior and a promise by every employee that their behavior will exemplify the values on your list. Your values statement can be placed front and center from day one, and every bit of training and performance appraisals should reference it. In other words, always look for ways to notice and reinforce behavior that exemplifies your values as opposed to simply providing feedback and discipline for behavior that runs contrary to that for which you stand.
Why Do You Value What You Value?
None of us has ever really liked being told “because I said so!” as the reason for our having to do something. It just doesn’t inspire us to control our own behavior although it certainly might inspire us to find ways to avoid getting caught. Why would your employees feel any differently?
If your code of conduct simply states the rules and the consequences for breaking them, it won’t give your employees much to hold onto as far as reasons to want to do the right thing. Sure, most of them will want to avoid the negative consequences for doing the wrong thing, but wouldn’t you prefer they have a reason for doing the right thing? To make this happen, your code of conduct and values statement ought to reference the reasons your values are so important.
To use the same examples as before, honesty, responsibility and great customer service are inarguably great goals to have. However, they will likely have that much more impact when given some additional context. For example, might it not be even stronger to say, “We dedicate ourselves to great customer service because it creates loyal customers who are both satisfied and build our financial success.” Another type of example would be, “By every one of us taking responsibility for our actions, we help assure the quality of our services and our fundamental willingness to be accountable for our actions both in the office and in the field. This, in turn, creates a better company by improving both the quality of our services, the comfort of our working environment and our satisfaction with a job well done.”
It’s Probably Not a Code of Conduct Unless It Mentions Conduct Somewhere…
As mentioned at the beginning of this article, there are lots of rules, and they all need to be learned and followed. Certainly they need to be referenced in the code of conduct. However, resist the urge to put a lot of rules into your code of conduct. Put them into your policies and procedures and human resources handbook instead. Why? For several reasons:
1. Like a well-written ethics code, your code of conduct needs to be easy to remember. The longer it is, the tougher that it is to do. Also, regardless of length, the more detailed it is, the tougher it will be to remember all day, every day. Just be sure that every employee is well-trained on where to find the exhaustive list of rules for when they need to look something up.
2. Also, like a well-written ethics code, your code of conduct needs to do more than simply tell employees what the rules are. It also needs to guide them on what to do when there isn’t a rule for something. This is why it is so important to focus on values and their rationale as opposed to focusing solely or even primarily on the rules.
3. Like it or not, a primary focus on the rules often leads to an almost inevitable search for loopholes and workarounds. Awkwardly, it is human nature to look at a list of rules and say, “Hmmmmm. Well this says I can’t do this, but it doesn’t say I can’t do that!” However, it is extremely tough to find loopholes or workarounds where values or their rationales are concerned. Consequently, contrary to what most people expect, a code of conduct can be much stronger when the rules are in the background rather than the foreground. Try to present them as examples of behavior representing certain values rather than as the primary focus or as the definitive, comprehensive list of do’s and don’ts.
Remember also that rules can just as easily be presented as examples of good choices as opposed to being presented in the traditional "do this and don’t do that" format. For many employees, this will make the rules easier to fully understand and retain because they will be presented in a "real world" context.
What Does An Effective Code Of Conduct Look Like?
When you put each of the above components together, you have a brief document that provides every employee with an easily read, easily memorized and easily applied set of tools for doing the right thing.
Though there are limitless possible formats, my recommendation is to develop a document, based directly on your values and with the wording of your choice, but in a format something like this:
To successfully meet our goals and objectives and to be the type of company we wish to be, it is our expectation that all employees will govern their behavior based on our following core values:
Value #1 – State your first value here.
Rationale – This value is both central and essential to our company because it allows/creates/promotes/provides/assures/ etc….
Here are two examples of how we bring this value to life:
1. An employee is faced with … and s/he could do a. or b. Because of our value on …, the right choice is for them to ….
2. Another employee encounters the following situation …….. Because we value ….. the proper behavior in this situation would be to….
Value # 2 – State your next value here and follow the same format.
What Does A Values-Driven Code Of Conduct Buy You?
Any company can give a list of rules to their employees, expect them to learn them and then discipline or fire anyone who doesn’t follow them. However, if your goal is to develop a workforce dedicated to helping you meet your company’s objectives and to reduce your liability due to the behavioral errors of others, then give them solid reasons for both knowing and following the rules every day. A well-written code of conduct will do that and even more; it will give your employees a set of values to rally around and to guide them beyond just following the rules. It will, in fact, assist them in actively building a better and stronger company for you. And who couldn’t use that?
Construction Business Owner, June 2007
