When the Crisis is Unfolding – Tap the Brakes
This blog post was written by Scott Moritz, Senior Managing Director at FTI Consulting, and is re-posted here with his permission.
The workforce that emerges from the combination of stay at home orders and the financial crisis will undoubtedly be very different than ever before. Each of us is dealing with unprecedented levels of stress, anxiety and uncertainty. External stressors can cause people in positions of trust to suspend good judgment and make some truly terrible decisions putting themselves and their organizations at risk in the process. Indeed, decision-making under stress and time pressures can be a perfect storm during which business ethics may be given short shrift.
In a recent episode of the Fraud Eats Strategy podcast, I spoke with highly sought-after compliance thought leader and luminary Richard Bistrong in a discussion about why we need compliance officers more than ever.
The workforce is facing stress, uncertainty and anxiety about what the future of business and work might be. That kind of crisis mentality can lead to three types of thinking: me, me and me. Not surprisingly, that can lead to an increase in workforce misconduct where people primarily focus on meeting their own needs with a corresponding decrease in employee engagement. But this does not have to be a perfect storm. By affirmatively and proactively acknowledging the stress everyone is under and addressing it, compliance officers and other leaders can use this as an opportunity to engage with the workforce and encourage people to slow things down and consider the longer-term implications of decisions or actions in the near term.
By communicating with the workforce through multiple channels and acknowledging and validating the stress everyone is under, it can have the effect of redirecting individuals who are leaning toward misconduct but have not acted on those impulses. Engaging with higher risk employees one on one and asking them how things are going may make them feel less isolated and perhaps take away some of the resentment or other feelings of disenfranchisement that eventually lead to fraud, corruption or misconduct.
In addition to the benefits of possibly mitigating the risks of fraud and corruption, compliance officers who adopt this proactive stance to employee communication could come out of this crisis with relationships and bonds with the workforce that are stronger than when this started. For that reason, the voice of compliance needs to be high and loud right now.
Harvard Business School professor Max Bazerman wrote an article advocating for a new model for ethical leadership. In it, he speaks about the importance of “deliberative thinking”. We spend our days in either System One thinking or System Two. System One thinking is intuitive, fast and automatic. Problematic decisions most often occur during System One thinking.
Deliberative thinking is slower, more methodical and logical, and it leads to more ethical behaviors. Compliance leaders should be encouraging the workforce to slow things down and practice deliberative thinking despite the heightened stress that may be compelling them to act as quickly as possible. If compliance officers are successful in getting their colleagues to slow things down and consider potential negative implications of their various actions beforehand they could be laying the foundation for a more ethical and compliance-centric workforce once the crisis has passed.
To hear the full Fraud Eats Strategy podcast episode with Scott Moritz & Richard Bistrong, click here.