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“No one told me I couldn’t lie.”
That’s an actual quote from an employee who used that as an excuse when customer complaints revealed that she had been lying about the capabilities of her company’s products during the sales process. Customers were led to believe that they were purchasing a solution that met needs the solution didn’t actually meet.
No one told her she couldn’t lie.
If that sounds to you like a lame excuse offered up by someone caught doing something they knew they shouldn’t have been doing, that’s because it is a lame excuse. It’s also not a rare one. In fact, in 2017, a high-flying private tech company was sued by several of its investors after it was discovered that the company’s salespeople had been lying to customers about their product reach and lying about the capabilities of the company’s competitors in order to steal business from those competitors.
No one told them they couldn’t lie.
The founders claimed they didn’t know about the deception and a subsequent investigation conducted by an outside law firm didn’t turn up any evidence that the founders were aware of it. But that didn’t stop the lies from costing the company and its founders dearly.
The founders were forced out, customers defected, one-third of the staff was laid off and the SEC opened an investigation. The company was put on life support and is still struggling to recover nearly two years later. They recently hired their first Chief Compliance Officer who has been tasked with establishing standards of business conduct and processes to detect noncompliance with company standards going forward.
Should these business owners have told their employees that it wasn’t acceptable for them to lie or was it okay for them to assume that they already knew that? The answer to both of these questions is yes.
You should only hire people that you believe know right from wrong, but as a business owner, you still need to explicitly communicate your expectations regarding their behavior. You instinctively know that it’s important to tell employees what you expect them to accomplish. It’s just as important to communicate to them the boundaries within which you expect them to achieve it. You wouldn’t hire a product designer and say, “Go design some products.” You’d tell her what kind of products and how many you expect her to design over a specified period of time. You also need to make sure she understands the values and rules she must keep in mind as she performs her job.
Every company needs a code of conduct, regardless of its size.
A code of conduct is a set of principles or rules that define the way in which you expect your employees to behave. A well-written code provides guidance upon which employees can base their decision-making. Additionally, if an employee engages in an act of malfeasance that lands your business in legal hot water, having a code of conduct in place can serve as a mitigating factor with regulators or prosecutors. Conversely, not having a code of conduct in such a situation potentially exposes you to greater liability.
Writing a code of conduct doesn’t have to be a daunting undertaking. It’s something you can do as a team. Your goal should be to produce a code that reflects your company’s values. If you haven’t articulated your company’s values yet, then that’s where you’ll want to start.
Be sure to keep your code simple and as concise as possible. If it’s too long or if it reads like it’s been written by a lawyer, no one will find it useful. And therefore, it won’t be used.
The Ethics & Compliance Initiative has an excellent resource on its website for first-time code writers. This guide walks you through each step of the code writing process starting with defining your company’s values. It also includes common code provisions that you should consider adopting. It’s a great starting point if you need help getting started.
A well-written code of conduct can serve as:
- guardrails that define the boundaries within which you expect employees to operate;
- a decision-making rubric that helps to keep employee decisions aligned with your company’s values; and
- a risk mitigator if acts of malfeasance committed by an employee land your company in hot water.
With benefits like these, how can your company afford to be without one?
February 28, 2019 at 09:02PM
Forbes – Entrepreneurs