Employees paying lip service to compliance is rampant at large organizations. They lie about completing training as required, about audits performed or procedures done, just so the documentation looks good and the compliance officer goes away. We all know this.
So I was delighted recently to find a study from that largest of large organizations, the U.S. Army, about why officers in that institution lie. Published last year by the Army War College, the report, Lying to Ourselves: Dishonesty in the Army Profession, paints an unflattering picture all around. Senior military leaders impose ever more policies and procedures for every risk you can imagine. Junior officers, scared to admit that they can’t fulfill every requirement, lie about the training their men have received, reports of enemy encounters, maintenance checks—about everything, really.
As the report puts it, compliance in the Army has become so burdensome that “an officer’s signature and word have become tools to maneuver through the Army bureaucracy, rather than being symbols of integrity and honesty.”
That’s a peril any compliance officer in the private sector can appreciate. We’ve seen it in specific examples of misconduct such as Wells Fargo, where employees fabricated customer accounts and then passed those false reports upward, so superiors could justify the fiction that sales goals were being met. We see it in Codes of Conduct that span dozens of policies, any of which can require training and tests and certification.
We see it in public policy debates, too: the answer to every problem always seems to be another certification of compliance. Just two weeks ago, the inspector general for TARP (apparently it still exists) called for Wall Street CEOs to certify annually that no civil or criminal fraud is happening within their enterprises. Calls for certification and reporting pervade our governance of large institutions today, from the Army to business to academia and beyond.
The authors of the study, Leonard Wong and Stephen Gerras, deserves credit for calling out the obvious: this idea can only go so far, before employees start to lie simply because they’re overwhelmed. Corporate compliance officers would do well to read the report (51 pages, you can finish it in an hour) and consider how it might apply to you. Their insights speak volumes about how a large institution can lose its way, even when everyone in the organization knows that lying is rampant. Two come to my mind immediately.
Employees Are Trying. Leaders Aren’t Helping.
Gerras and Wong stress that virtually no Army officer wants to skirt compliance requirements; officers simply have no choice. They cite an earlier study that tallied all the training officers had to fulfill with their men: 297 days’ worth of mandatory training to complete—and only 265 days available for training. In other words, compliance with all required training was literally impossible to do.
The saddest part of that statistic, however, is that it comes from a study conducted in 2002. Gerras and Wong say the situation in the Army has only grown worse since then, and I have no doubt that a similar dynamic exists in the private sector as well.
Some people will blame Washington, especially under the Obama Administration, for producing all these new compliance and reporting burdens. Partly that’s true. Still, we need to remember what else is happening here: senior leaders want to avoid liability for a risk gone wrong, so they push that risk down the organizational chain via certifications from junior staff.
When the demand for certification of compliance reaches critical mass, that’s when people start to lie.
Beware the Pointless Procedure
Apparently one common practice in the Army is to submit a fabricated “storyboard.” Every time an Army unit has some enemy encounter (say, a roadside bomb exploding, or an exchange of fire), the officer must submit a PowerPoint presentation that walks senior officers through the incident. But since storyboarding takes so much time, officers keep a few basic PPT presentations on file and just add a few passably relevant details for every new submission.
Why do officers treat storyboarding with so little concern? Bec
ause senior officers never tell them what the higher-ups do with those storyboards after junior officers file them. One officer joked that maybe “they go to a magic storyboard heaven somewhere, where there are billions of other storyboards… I honestly can’t tell you where any of them go.”
Pointless procedures like that practically beg for employees to ignore them. What’s more, for all we know, perhaps senior officers do take those storyboards and perform some high-value analysis with them—but they never inform the junior officers what that purpose might be, and that’s the failure. If senior executives want effective compliance, they need to craft procedures that meet employees where the employees are.
Foremost, that means communication. Generals don’t need to tell lieutenants their full battle plans, but they do need to tell lieutenants that their work serves a specific purpose that’s worthwhile. Otherwise, eventually, you get garbage.
Think Big, Like the Army
I may write more about Wong and Gerras’ report again, because it is chock full of deep questions. How can we prevent ethical fading? How can we revive the lofty idea of trusting people, of “acting with integrity,” when that means relaxing compliance requirements and accepting more risks? Can automation really help to alleviate some of the burden here? Can you take a risk-based approach to operations if your organization is highly inter-dependent on others?
For now, however, I recommend the report to compliance officers everywhere who like to sit back and ponder the big picture. It’s well worth your time.