The Omarosa Compliance Lessons

Like so many other Americans this week, I’ve been both captivated and annoyed at Omarosa Manigault-Newman’s disclosure of conversations she secretly recorded at the White House. Worse, the more I watch this latest episode in the drama-rama otherwise known as the Trump Administration, the more I find valuable lessons for corporate ethics and compliance officers.

I wish that weren’t so, but it is. So let’s review.

First, consider this business of Omarosa recording her own firing in the Situation Room with chief of staff John Kelly. The Situation Room is a SCIF: a Sensitive, Compartmentalized Information Facility, a secure room where people can view or discuss classified matters without fear that other parties are eavesdropping on what’s discussed. Nobody without proper security clearance is allowed in a SCIF unsupervised; even computer equipment brought into a SCIF must meet special technical standards.

So, um, how did Omarosa get a recording device into the most secure SCIF on the planet?

Well, apparently people with proper security clearance to enter a SCIF are on their honor not to use recording devices in the room. The system is based on trust.

So says Preet Bharara, former U.S. attorney for Manhattan and no stranger to visiting SCIFs himself. On his Stay Tuned podcast this week (which should be regular listening for every compliance and audit professional), Bharara said he used a SCIF in the Southern District of New York, visited SCIFs in the Justice Department in Washington several times, and once even entered the Situation Room himself.

The theory, Bharara said, is that anyone authorized to enter a SCIF has already passed all necessary background checks and been trained on security protocols. “The understanding is that they follow the instructions you’re supposed to follow before entering a SCIF,” Bharara said.

Yes, there are boxes outside the SCIF where you can leave your personal devices before entering the room, and it’s expected that you do. But no security guards frisk senior officials before entering the SCIF like we mere mortals might encounter at an airport security line. “You just trust the people to do the right thing,” Bharara said.

Which bring us to another interesting analysis of the Omarosa issue, from Josh Marshall of the political blog Talking Points Memo. Marshall describes the West Wing as a “high fear, low trust” organization — the opposite of what an organization needs if it wants to achieve high performance.

Or ethical performance, for that matter. Which is where compliance officers can start to see the lessons of Omarosa.

High Trust vs. Low Trust

Simply put, social environments can either be high trust, where participants can spend less time verifying the motives of others and get on with achieving bigger and better things; or they can be low trust, where you spend so much time confirming the legitimacy of everyone and everything that you never manage to accomplish anything else.

As Marshall notes, low-trust environments do have their place. For example, if you’re buying a used car, you don’t want to trust the salesman. You only want to buy an effective car at the lowest possible price.

In the corporate world, you might use low-trust tactics when sourcing goods or services, especially if those items are commodities you can get anywhere. (There’s always another used car lot down the road, after all.) That’s why we spend so much time performing due diligence on data service providers, overseas sales agents, and the like: most of the time you can find another provider anywhere, and you don’t really know who these vendors are until you put them through the paces.

Achieving ethical conduct within an organization, however, is wholly different. This is where you do want a high-trust environment. You can achieve that either by engaging in extensive auditing and documentation of every action employees take, or — wait for it — you can invest in hiring ethical employees in the first place.

That devotion to ethical culture and ethical employees isn’t simply some feel-good MBA newspeak so you don’t have to worry about employees secretly recording each other. It has real implications for what organizations can achieve.

I’ve written before about this organizational theory, called the OODA Loop: observe, orient, decide, act. The faster your OODA Loop runs, the more actions you can take, and the better positioned you are to outmaneuver your opponents and achieve your goals. The OODA Loop is all the rage in military strategy circles.

In complex organizations, however, the OODA Loop works best where senior executives set broad goals and build a strong, trusting organizational culture, while junior executives have great freedom to execute tactics on a daily basis.

Trump has built a White House culture entirely opposite of that. As Marshall notes in his Talking Points Memo post:

The clear implication is not simply that Trump hires bad or untrustworthy people. It is far more organic. Trump creates and operates in a world in which anyone can be tossed overboard, fired or denigrated more or less at the drop of a hat…  

All of this breeds a climate of mistrust and suspicion both in the ‘bilateral’ relationships between Trump and individual staffers and within the whole subculture – vertical and horizontal mistrust, we might say. It’s a low trust, high fear climate which breeds backstabbing, betrayal, paranoia which only deepens in a self-validating, self-perpetuating way.

And that’s how you get senior staffers believing it’s perfectly fine to violate a boss’s trust by secretly recording conversations. That’s how you get an organization that runs around constantly, a flurry of fists punching at one idea after another, but accomplishing little.

That’s what a business wants to avoid. The best, cheapest way to avoid it is to build a strong, ethical, unified corporate culture in the first place.