7 Habits for compliance professionals

Stephen R. Covey was one of the most prominent authors of leadership, self-improvement, and motivational books and speeches of the 20th century. Though the businessman, author, educator, and speaker passed away in 2012, his well-known writings are still influential and insightful for the current generation of managers, students, and thinkers. The teachings from Covey’s books can be applied in many fields of life – business, family, religion, and community, lending heavily to his continued popularity with a wide variety of people. Not simply positioned as self-help, Covey emphasized ethics and distinct definitions of both values and principles, as separate concepts that independently influence people’s behaviors and decision-making.

Due to these emphases, Covey’s writing is specifically interesting and useful for compliance professionals looking for a novel way to approach imbedding into a corporate culture both individual values – which one could see as ethics or morality – and organizational principles – which one could see as compliance program requirements and goals. Covey’s teachings often touch upon the value of inner success, rejecting external competitive measures as the true sign of achievement in favor of emphasizing personal mission statements and progressive goal-setting to allow an individual or an organization to go from immature dependence, through self-sufficient independence, into the higher state of functioning interdependence with others. This strategic vision has a high affinity with the sort of planning compliance officers must do to encourage a successful culture of compliance.

Arguably, Covey’s best-known book is the worldwide best-seller The 7 Habits of Highly Effective People. This book is not only a worldwide best-seller that gains new fans every year for its simple and timeless insights on how to work toward, achieve, and sustain inner success, but it is also the Covey book which is most applicable for compliance professionals to study and take into consideration in the course of their work.

Taken individually, each of the 7 Habits endorses values and principles and encourages conduct in support of those, which are useful for compliance risk awareness both in planning program priorities by the compliance officer as well as encouraging awareness and fostering integrity for individuals and organizations.

Steven R. Covey’s famous 7 Habits, annotated with suggestions for their applicability to corporate compliance and ethics programs, are as follows:

  1. Be Proactive – This is the first of three Habits that focus on maturing from dependence to independence, a process also referred to by Covey as self-mastery. This Habit introduces the concepts of Circle of Influence, one’s effective community – in a business perspective, partners, stakeholders, and clients or served parties – and Circle of Concern, where problems happen and dysfunction or distrust can stymy success and achievement.
  2. Begin with the End in Mind – Simply put, this Habit calls upon individuals and organizations to be devoted planners. Once the plan is set, apply with dedication to following it, in on-going and careful review of its efficacy and currency. Planning is a fundamental component of any successful compliance program. Setting goals and priorities for the program is necessary to encourage informed business buy-in and checking these goals and priorities on a continuous basis helps to keep them grounded in reality and responsive to evolving business and regulatory demands.
  3. Put First Things First – This Habit identifies the difference between leadership and management, a crucial dichotomy for the encouragement of both ethical leadership and adequate supervision, which are equally necessary in order to model conduct expectations and ensure progress in one’s mission. Covey says that leadership in society requires personal vision and for the individual to embrace the importance of character ethic, or internal personal qualities such as ethics, honesty, and loyalty, rather than personality ethic, or external personal qualities such as popularity or other short-term human interaction traits.
  4. Think WinWin – This is the first of three Habits that focus on interdependence, offering tips for working with others. In a service function such as compliance, working together effectively to establish a consistent and open relationship-based approach to risk management is crucial. Likewise, it is important for individuals to appreciate the importance of interdependence also, to see that their individual actions are significant in the overall scheme of the compliance program and to appreciate the importance of accountability, driving them to discuss dilemmas and enhance understanding. Finally, from an organizational perspective interdependence is also very important, driving home the cultural significance of corporate social responsibility and even political engagement in establishing corporate values and creating an identity and purpose in society.
  5. See First to Understand, Then to be Understood – This Habit focuses on the importance of listening for genuine understanding in order to build trust and promote personal credibility. Of particular importance are the Greek philosophy concepts of Ethos, the trust individuals inspire or in Covey’s words their Emotional Bank Accounts; Pathos, aligning and communicating with others and their own emotional trust; and Logos, the reasoning that must be included in communicating with and considering the trustworthiness of others, while projecting your own. Check back in the future for an blog post dedicated to the important concept of Emotional Bank Accounts.
  6. Synergize – This Habit reinforces the key interdependent competency of teamwork. Set goals together and achieve and maintain them together as well. In compliance terms, establishing trust and transparency as key values requires a cooperative commitment to supporting these individual values in the organizational principles that are established, be it via a corporate mission statement or through business strategy and growth plans.
  7. Sharpen the Saw – This final Habit focuses on personal and interpersonal continuous improvement. Balance is key to contended success in both life and business; no achievement attained with disrespect for resources it requires can be sustainable. In order to be truly successful, renewal and sustainability are the most important priorities. Continuous improvement for a compliance program or a company’s corporate values requires continuing risk re-assessments and a rolling plan for how to implement and refine compliance planning and communication.

For an in-depth look at Stephen R. Covey’s work and legacy, check out this official website maintained by the Covey Family. And for an entertaining take on the book, watch this animated book review of The 7 Habits of Highly Effective People.

Fraud in sports: Marathon cheaters

This is the first of a five-part series discussing fraud in sports. This starts with today’s post which will discuss runners who have been publicly exposed as cheaters in marathons. Next Tuesday’s post will be about imposters and scammers in the world of thru-hiking, a popular endurance sport where people long-distance trail hike in areas like the Appalachian Trail in the Eastern United States or the Pacific Crest Trail which stretches from California to Washington. On Tuesday December 19, the third post will be about sports fraud via gambling, including betting by players and illicit investment schemes. The fourth post on December 26 will be about game fixing, such as the Black Sox Scandal in which several players on the Chicago White Sox conspired to throw the World Series. The fifth and final post, on January 2, will be about major doping scandals, including Lance Armstrong and allegations of systematic doping by the Russian Olympics delegation.

Marathon cheating is a phenomenon that has both fascinated and infuriated running commentators. In a community which is fixated on qualifying times, personal bests, and self-identifications as hobbyist or elite runners which can be separated by mere seconds of pace time, honesty about runner times and speeds is sacred.   In this context, runners who cut courses short, falsify results, or claim publicity for false achievements, undermine the most fundamental measures of success in the marathon running world.

  • In the 1980 Boston Marathon, Rosie Ruiz, a 26-year old New Yorker, finished first among the female runners with an impressive time of just over two hours and thirty minutes. In the face of her amazing accomplishment, Rosie was nonplussed and composed – probably because she cut the course and did not run the 26.2 miles. Ruiz had her medal revoked when other runners stated that they witnessed her running onto the course at mile 25. It turned out that she exited the marathon course near the beginning and took the subway there, where she re-entered and claimed a false victory. Upon investigation, it was discovered that Ruiz’s Boston qualification time, run in the 1979 New York Marathon (her only other marathon before), was fake also, achieved because Ruiz again cut most of the course by riding the subway to re-enter near the end. Ruiz’s fraud rocked the marathon running community, in which road racers had a strong honor code that they felt was pure and safe from cheating that had afflicted sports with equipment or environments that could be altered or adjusted for cheating: Backtalk; 20 Years Later, the Legend of Rosie Ruiz Endures
  • Kip Litton intended to be well-known far outside of his social circles in Clarkston, Michigan as a champion marathoner. However, he has gained notoriety for a different accomplishment in marathon running entirely: prolific misrepresentation of his results and of races run. As Litton shot to the head of the pack in a number of small marathons, his fellow runners became confused by and curious about his quick rise to the top. By investigating race photographs and triangulating his likely performance based upon verifiable race times and per mile paces from previous chip-timed runs, other runners discovered that Litton was falsifying his performance. He was able to pull off this fraud by strategically picking races where he could cut courses or claim to have run qualifying times without even participating at all. The evidence of Litton’s misconduct assembled by the amateur investigators is fascinating and pathological in its devotion to his fraud, even amid Litton’s disqualifications from various races after inconsistencies were pointed out to directors: Marathon Man 
  • Social media has provided a fertile environment for inventive marathon cheating. Legitimate runners who share photos showing their bibs, the identifying numbers that runners wear pinned to their chests or backs during the race, have had those photos stolen and used for bib replication. Runners then use the fake bibs to “bandit,” or run incognito and illicitly, at races. This could be to avoid paying registration fees, to falsify qualifying records, for a prank, or for a creative type of identity theft. As discussed above, the runner community is vigilantly self-policing, and the fascination with these bandits leads to far-reaching vigilante investigations and reporting to race administrators to “out” cheaters:  Inside the Weird World of Social Media Marathon Cheating 
  • The 2017 Mexico City Marathon was mired in scandal when almost 6,000 runners, nearly 20% of the field of 29,000 runner, were disqualified for cheating. Investigation showed that many runners missed timing mats. Others, however, blatantly cut the course, either by riding the subway (harkening back to Rosie Ruiz in New York in 1979 and Boston in 1980) or “bib mules,” runners who wear bibs intended for other runners who do not compete at all, in order to falsify their results (typically to post a qualifying time for Boston or another exclusive race). What exactly happened in Mexico City remains unclear, but it seems to have been a combination of opportunistic runners who took advantage of technological difficulties or shortcomings at the race, and runners cutting the course short by missing timing mats. Such a dramatic disqualification rate should lead the Mexico City organizers and indeed anyone who is behind setting up and administrating a major race event to take a deep look at their internal controls and ensure that future races are set up to diminish the possibilities for going off-course or bandit running:  What the Hell Happened at the Mexico City Marathon?
  • For runners who achieve their results legitimately, race day represents many months or even years of hard efforts brought to fruition. Therefore, for serious runners, cheating and falsifying results is a real insult to all of their work and cheapens the prestige they seek of a credible accomplishment. Therefore many marathon runners who are active in the online communities such as the LetsRun forums take their annoyance or offense at this perceived dishonesty to the next level, launching widespread investigations into uncovering and calling out impropriety. Many runners who do not cheat see those who have cut courses or faked times bragging online, promoting themselves via social media, and their outrage at these actions speaks to the philosophical morality of running. At its most elemental level, and despite the many data-driven external successes one can achieve in the sport, running is a pursuit of internal success, a battle within the self for endurance and accomplishment. Cheating hinders and harms this. People who investigate and call out cheaters hope that they are working as deterrents to runner dishonesty as well as acting as a sort of informal self-regulatory organization for the running community: How to Catch a Marathon Cheat  

For a lot more fascinating examples of and insight into marathon cheating, check out the site Marathon Investigation. Run by Derek Murphy, a business analyst, marathoner, and running fan, the site is a comprehensive survey of impropriety and cheating at marathons all over the world. It offers a really compelling look into the analytical and research aspects of investigating and tracking potential cheaters by using historical data, GPS records, published running times, maps, race photos, and much more publicly available data. For more about Murphy and his motivations and methods, read this profile.

Check back next week, Tuesday December 12, for the second post in this series of five, which will be about fraud in sports as illustrated by thru-hiking fakers and scammers.

Profiles of ethical leadership in sports coaching: Gregg Popovich

This is the fifth and final post in a month-long series profiling acclaimed sports coaches for their ethical leadership abilities. John Wooden, famed UCLA basketball coach, and his Pyramid of Success were the subject of the first post. The second post was about Johan Cruyff, world-famous Dutch footballer and international club manager, and the ethical leadership lessons of his 14 Rules. The third profile discussed Jim Valvano and his views about leadership and success as expressed in lines from his famous 1993 ESPY Awards speech. Last week’s post focused on Vince Lombardi, the NFL Hall of Fame coach, and values for ethical leaders from his famous motivational speeches.

Finally, today’s post will be about Gregg Popovich, an NBA coach who heads up the San Antonio Spurs and is well-known for his progressive and pro-active values, which often manifest in very public and political statements.

Before becoming an NBA coach, Gregg Popovich attended the United States Air Force Academy where he played basketball and majored in Soviet Studies. He served in the Air Force for five years before returning to the Academy to coach basketball there, followed by a stint as head coach at Division III Pomona-Pitzer and then assistant coach jobs in the NBA for the San Antonio Spurs and Golden State Warriors, before returning to take a general manager job with the Spurs in 1994.

Popovich is widely considered one of the most accomplished coaches in NBA history. He has been the coach of the San Antonio Spurs since 1996, making him the longest tenured active coach in not only the NBA but in all US major sports leagues. The competitive successes of the San Antonio Spurs under his stewardship are many – 20 consecutive winning seasons, five NBA championships, and more than 1,000 games won.

However, Popovich’s legacy as a winning basketball coach may be matched by his legacy as an outspoken and consistent leader on social justice issues – both in society as a whole and on the direct scale among his players. Popovich consistently uses his very visible platform to speak about inclusion, engagement, and accountability.

  • This 2007 profile of Popovich from Canada’s National Post hints at the values Popovich brings to his overall coaching vision. The profile notes that Popovich’s media profile was, at that time, lower than some other great coaches because he was not interested in self-promotion, nor did he have a singular “vision” for the team that was well-suited for branding and publicity purposes. Instead, he focused on building “strong, complicated” relationships with his players and emphasizing worldly knowledge and overall excellence alongside basketball fundamentals. This profile is especially interesting for the quote at its end, which at that time was posted in the hallway by the Spurs locker room, translated into the various languages the players on the team spoke: “When nothing seems to help, I go look at a stonecutter hammering away at his rock perhaps a hundred times without as much as a crack showing in it. Yet at the hundred-andfirst blow it will split in two and I know it was not that blow that did it but all that had gone before.” This view of success can only be espoused by a leader who sees the values and efforts of the organization as inseparable from those of the individual. This is a powerful and indeed empowering perspective on management as an activity and skill which serves the collective of the organization as well as each individual within it:  Popovich is a man of mystery
  • This 2013 round-up on Popovich centers on his interesting and complex personality and background, intended to fascinate basketball and sports fans. In most cases, these traits and experiences translate directly to his ethical leadership qualities as well, and the root is in Popovich’s personalized and compassionate approach to coaching individuals rather than just constructing offenses, defences, and plays in a vacuum. When he was general manager of the Spurs and the head coach wasn’t getting the job done, Popovich stepped up and put himself on the line, eventually hiring himself as head coach. He took tough decisions and made himself responsible for them, a behavior that embodies ethical leadership: An Ode to Gregg Popovich, the Most Interesting Man in the NBA
  • In 2014, Fortune included Popovich in its “The World’s 50 Greatest Leaders” feature. In this view, Popovich, portrayed as curmudgeonly and stoic, distinguishes his leadership by enabling his whole team, from the bench players to the superstars, to excel and achieve. His no-nonsense style focuses on character ethic, not personality ethic, which is the central value for promoting and sustaining individual integrity to then scale across the organization. Popovich’s leadership is special in this view because it is so relationship-focused, giving his players incentive to seek individual inner success, not just to please a coach or beat an opponent in a one-off, unsustainable fashion: Another victory for ‘Pop.’ Another show of leadership
  • Business Insider ran a 2016 piece on Popovich which again centered on his relationship-focused, individual-valuing coaching philosophy. His perspectives on rebounding from failure, organizational governance, and player development all fit within the broad strokes of ethical leadership. In particular, Popovich emphasizes that motivating players and resolving conflict is best accomplished through honesty and personal accountability. These is fundamental perspective for encouraging organizational and individual (employee, player, or otherwise) integrity. Again, character ethic is the most important, and this enables open communication and feed-forward development and problem-solving:  Gregg Popovich has a brilliant philosophy on handling players, and it exemplifies the Spurs’ unprecedented run of success
  • From 2017, this ESPN piece focuses on Popovich’s political engagement and public opposition to what he sees as immoral political behavior. However, the rationale for why Popovich feels so strongly about this and indeed why he feels that he has an ethical imperative to speak out loudly about it is very illustrative of his leadership views. The article shares an anecdote about a time that Popovich began a high-stakes film session by sharing his knowledge on a historical topic of personal importance to one of his players. Popovich creates an environment of inclusion on his team by making what is different between them, important and meaningful to all of them, by translating these lessons into leadership messages for all. This empathetic approach to leadership is an ultimate expression of integrity and engagement, two imperative ethical qualities in management. For the Spurs, recruiting based on diversity and then using that diversity as motivation leads to both market competition as well as organizational cohesion:  Why President Trump ignites Gregg Popovich

Hopefully this series of posts about sports coaches as ethical leaders has been entertaining and informative, lending a new perspective to management values in a different venue than the traditional corporate compliance environment. The concepts of inner success, character ethic, personal accountability, and purpose-driven life and work are all commonly endorsed by these ethical leaders as they guide their teams, which are major organizations in and of themselves, to competitive achievements with meaningful, sustainable motivations behind them.

Taylor Swift and compliance risk management

Taylor Swift is one of the most famous and successful pop music stars of the last decade. She has dominated the charts, the front pages of tabloids, and the trending posts on social media for years, as much for her songs and music videos as for her romantic exploits and friendship feuds. In an era of being famous for being famous, Swift is a special kind of celebrity who presents a public personality that takes deep advantage of this trend while still giving commercial justice to her origins as a country pop singer. In this dichotomy, Swift has both fans and detractors on both sides – those who are enthralled by the mystique of her celebrity image are just as engaged with the public brand of her persona as those who actually have any interest in her music itself at all.

With this source of her visibility on the music charts and in front of the paparazzi camera lens, it is no surprise that Swift has experienced her share of growing pains on the world stage. Swift’s eponymous album was released in 2006 when she was just 16 years old; at the time of her most recent release, Reputation, in November 2017, she was 27 years old. The generational changes any person experiences during the intervening years are transformative on all levels – personality, relationships, career, worldview.

To go through these phases and changes in front of the whole world, means that your choices and their contexts and subtexts are part of a powerful public dialog. A specific aspect of Swift’s fame has been that her fans and detractors alike are preoccupied with parsing the similarities and differences between the public face Swift presents in her music and media appearances and clues for what her private, undiscussed motivations and ambitions might be.

Swift’s public image has been negatively impacted in recent years following several high-profile feuds with other celebrities such as Katy Perry and Kim Kardashian West. Those wishing to question her motives or critique her actions have had plenty of fodder. The contradictions in her established image and her possible schemes and attention-getting frauds have fueled many a comment thread on social media. Swift’s most recent album is therefore aptly named Reputation and takes direct aim at this critical focus about her identity.

The change in Swift’s position in popular media due to the critical reception of what is, in reality, her brand strategy, presents a compelling case study in reputational risk. Even though one’s reputation is based largely on perception or even assumption and innuendo, it has a very real effect on public standing. This is true for Swift who is an individual representing her brand and work, just as it is true for an organization representing its business strategy, product or service line, and client relationships. It is especially amplified by those with a large internet presence, as the nature of online interactions in the digital age is to inspire investigation and critical judgment. As the saying goes, you can never really delete anything from the internet, and that proves true time and again – especially when statements by or images of someone like Swift can generate discussions and debates bigger than the original post ever could have been.

Therefore reputational risk presents a challenge to high-profile individuals and brands that is hard to reconcile with desires for publicity and competitive attention and impossible to control once a controversy or reaction has been ignited, innocently or otherwise. The morality of reputational identity and the necessary efforts to maintain and construct it together create an important exercise in defining and adhering to a strategic, values-based approach.

The changing fortunes and public opinion of a celebrity like Swift can be easily translated to the organizational context, where business entities rely on their public profile and engagement with consumers and stakeholders to maintain competitive edge. Corporate identity and credibility is incredibly valuable and also inestimably vulnerable to reputational risk. Negative news articles, mentions of companies pursuing legal but unpopular business strategies, involvement in politically complicated regions or activities, and other conduct that puts companies on the razor’s edge of popular opinion can have disastrous effect on a brand and its interests.

Management of reputational risk for organizations should take a common sense approach. Compliance training materials often refer to one of two tests: would you want to read about this on the front page of a newspaper, or, would you be comfortable discussing this action in public, say at a dinner party, with someone you admire, like a parent or mentor? If the answer is no then the action or strategy is not advisable. Having the possible public outcome from individual or organizational actions in mind before the activity is undertaken helps to maintain a view on consequences and hopefully, therefore ground the decision in practical ethics.

For a broad take on Taylor Swift and the contemporary value of reputation, check out this opinion piece in the Financial Times.

Profiles of ethical leadership in sports coaching: Vince Lombardi

This is the fourth post in a month-long series of five that profile well-known sports coaches as examples of ethical leadership. The first post was about John Wooden and the Pyramid of Success he created while coaching basketball at UCLA. Johan Cruyff, legendary Dutch football player and manager, and the 14 Rules that are displayed at the fields that bear his name worldwide was the subject of the second post. Last Wednesday’s profile was of Jim Valvano, featuring an analysis on his views about leadership and success as featured in lines from his famous 1993 ESPY Awards speech. Today’s post focuses on Vince Lombardi, the NFL Hall of Fame coach, and his views on ethical leadership as expressed by his motivational speeches to his players and the public.

Vince Lombardi was a football player and coach who achieved great success over his 15 years working in the NFL before his death from cancer in 1970. Many critics consider Lombardi to have been one of the greatest coaches in the history of football, and this opinion was borne out in the records of the teams he coached and the accolades he received during his career. His tenure at the Green Bay Packers produced five NFL championships in the seven years from 1961-1967. He was elevated to the Pro Football Hall of Fame in 1971 and the NFL Super Bowl trophy was named in his honor. He has been admired and revered by many professional coaches, including the subject of last week’s ethical leadership profile, Jim Valvano. Therefore the effect of his powerful leadership style which will be explored below has been a legacy which has far outlived his own career.

Lombardi is known to have been a powerful, inspiring, and complex individual as a coach. He was known for his fiery, loud temper and authoritarian ways as much as he was for his insistence upon fairness and unconditional respect for the members of his football organizations. He demanded much from his players and in return was passionately devoted to them both as teams and as individuals. He would punish or call out players who did not meet his standards for effort or commitment, but also sought to actively recognize dedication and perseverance, which he upheld as critical values for success and achievement. He was devoutly religious yet open-eyed to prejudice and discrimination, which he strove to oppose with zero tolerance, and he was notable for his largely liberal beliefs.

Following the premature end of his life in 1970, Lombardi has been revered by football’s institutions, fans of the teams he coached, and people in the communities he impacted, especially in Wisconsin, New Jersey, and New York. Plays, movies, and books have been written about his influence as a coach and leader. Lombardi’s enduring legacy has been inspiring statements from speeches he made to players and other motivational comments attributed to him. Collections of these have been published and studied both by people working in sports and by others in all walks of life.

Of course, many of these statements are relevant not just to a football team preparing for a game or a coach seeking to motivate his players, but to life in general, and to a compliance professional interested with inspiring leadership ethics in specific. In this theme, here are five famous quotes by Lombardi, annotated with tips for how to apply these sentiments in defining compliance values for individuals and organizations:

  1. “Morally, the life of the organization must be of exemplary nature. This is one phase where the organization must not have criticism.”– Moral compromise cannot be a consequence of desire for success. Core values of an organization should be sacrosanct and not up for debate or critique which is focused toward diminishing or subjugating them to commercial or external pressures.
  2. “Success demands singleness of purpose.” – As discussed in last week’s profile of Valvano, individuals who drive toward goals with a defined and committed purpose, rather than a base desire for external recognition, are best prepared for true internal achievement that is sustainable and meaningful. Ethical decision-making requires this purpose-driven approach; commitment to values is certainly deserving of that singleness.
  3. “To be successful, a man must exert an effective influence upon his brothers and upon his associates, and the degree in which he accomplished this depends on the personality of the man.” – It is not just coaches who can inspire and elevate others with their examples. All individuals must have personal accountability for their moral codes and must strive to make ethical and compliant decisions. People must recognize the huge impact that their behavior has on those around them and commit to using this influence for the collective good. No person is an island in a culture of compliance. All levels must be engaged – tone at the top, mood in the middle, buzz at the bottom – and individuals must view their own reputations and relationships with others as important extensions of the values of the organization’s compliance program.
  4. “Watch your thoughts, they become your beliefs. Watch your beliefs, they become your words. Watch your words, they become your actions. Watch your actions, they become your habits. Watch your habits, they become your character.” – In a context where the organizational heuristics lean toward values-based and purpose-driven, individual ethics have a huge impact toward defining broad frameworks for making choices and defining strategy. Unethical decisions and misconduct often originate from environments where employees are isolated from the impact of their actions or where personal consequences are remote and not relatable.
  5. “A leader must identify himself within the group, must back up the group, even at the risk of displeasing superiors. He must believe that the group wants from him a sense of approval. If this feeling prevails, production, discipline, morale will be high, and in return, you can demand the cooperation to promote the goals of the community.” – Awareness and acceptance of personal accountability and consistent articulation of values and rules are critical for imbedding a culture of compliance. For that culture to succeed, leadership must speak up and out, and encourage others to safely and productively do the same. If individuals feel that their leaders espouse values, expect them to embrace those values, and provide a prevailing environment where both really matter, then the culture of compliance will be authentic and enduring.

For more powerful quotes from Lombardi on leadership and inner success, many of which are inspiring from an ethical perspective, check out the official website maintained in his name.

Also, don’t miss the final post in this series, next Wednesday, which will profile Gregg Popovich, who is the current coach of the San Antonio Spurs and is widely admired for his views on inclusion, political engagement, and personal accountability.

Starbucks and cultural respect in design as business strategy

Starbucks is one of the most recognizable global retail brands today. Its branding is universally known, with its ubiquitous green and white mermaid logo reliably present worldwide and its slate of coffee and tea products also dependably the same. While many consumers may find consistent branding and the resulting quality standards to be expected along with it comforting, one of the undeniable criticisms of globalization has been that localization – native customs and characteristics that often have deep historic and cultural significance – can end up subverted in favor of international sameness.

Indeed, companies such as Starbucks have struggled in some markets to import their menus and store designs to communities which may be resistant to connecting with what can be seen as a generic, foreign experience. Apart from just lacking appeal or seeming strange, sometimes these companies can offend local norms or fail to fit into the communities which they wish to court for business. While sometimes novelty of a brand can create allure or even cult status for the company’s products with curious consumers, more often, Imposing a company and its products on a community in a non-assimilative way does not likely make for a successful competitive strategy.

Starbucks has faced its challenges importing its distinctive coffee shop brand and products to new communities over the years. Even within the United States, local coffee houses with loyal customer bases have put up resistance to a major corporate brand setting up shop in communities such as Venice Beach, California which have preferred small, local businesses to fit with an indie, alternative vibe. Outside of the United States, the powerful social value of “coffee culture,” representing a social and community activity rather than just a caffeine and snack break, has sometimes not jived well with perceptions of the Starbucks brand. Criticisms of the products themselves come from people who have high expectations for bespoke coffee that they don’t feel Starbucks satisfies or, on the other end, a standard idea that coffee is quick, cheap, and on-the-go only, in light of which Starbucks seems expensive and inconvenient.

One striking way that Starbucks can address these objections is to seek to fit within and contribute to the community authentically and meaningfully. In Kyoto, Japan, the Starbucks Coffee Kyoto Ninenzaka Yasaka Tea Parlor is an amazing example of how a company can demonstrate respect towards a community and its traditions in the design of its public spaces. This Starbucks is located in a traditional wooden house, with subdued colors and branding on its exterior, which fits aesthetically and culturally in the historic neighborhood where it is located. On the inside, the authenticity of the retail experience to its cultural environment continues, with tatami (straw) matting on the floors and traditional Japanese garden in the back courtyard by the coffee bar. Rather than appearing in contrast to the other businesses in its area, this Starbucks blends powerfully into its distinctive surroundings. Starbucks does not seem here like it is trying to impose its brand or style, but rather to show respect for the traditions of the very historic Gion district of Kyoto.

Joining the community in which the store is located, rather than setting itself apart from it, is a powerful expression of social responsibility and engagement for a brand to make as it seeks to attract and appeal to customers. Matching with the experience and aesthetic of such a distinctive area as Gion, which was originally developed as a district in the Middle Ages and is one of the most well-known geisha districts in Japan with the Yakasha Shrine at its center, is a challenging but inspiring business strategy. This values-based approach to growth and design leads to sustainable expansion and competition for a brand such as Starbucks, which can benefit tremendously from positioning itself as sensitive and loyal to local communities and their characters.

For more on this interesting Starbucks outlet as well as Starbucks locations in other countries that aim to honor their communities with their design aesthetic, check out this CNN feature article.

Profiles of ethical leadership in sports coaching: Johan Cruyff

This is the second in a month-long series of five posts that discuss successful sports coaches in terms of their ethical leadership qualities. Last Wednesday’s post was about John Wooden, the visionary UCLA basketball coach. Today’s post will focus on Johan Cruyff, the acclaimed Dutch footballer and manager of Ajax, Barcelona, and Catalonia football clubs. Next week, the profile will be about Jim Valvano’s leadership ethic as expressed in the famous speech he gave at the ESPY Awards in 1993, two mere months before he died of cancer. On November 22, the post will be about Vince Lombardi, the NFL Hall of Fame coach, and clues about how he saw ethical leadership based on some of his most famous public statements. The fifth post in this series, on November 29, will study Gregg Popovich, a current NBA coach with a progressive view toward developing his team as both players and people.

Johan Cruyff is widely thought of as one of the greatest football players of all time, having won the Ballon d’Or three times and playing many extremely successful seasons for Ajax (1964-1973) and Barcelona (1973-1978) in club play and the Netherlands (1966-1977) in international play. Cruyff is equally regarded for his impressive achievements as a club manager. His innovations while at the helm of Ajax and Barcelona football clubs laid the generational foundations of coaching philosophy that continue to shape the directions of those teams and their youth academies, as well as those of many others.

To learn more about Cruyff’s life and accomplishments as a player, read this profile from The Guardian published after his death in March 2016.

Cruyff, regarded by many as a technically perfect football player, was able to devote his energy to creative organizational strategies to make the game more cooperative and dynamic. From his perspective, technique went far beyond fundamentals of football that could be learned from rote practice of drills. Rather, real playing ability came from having a fluency and versatility with the game that allowed players to connect to one another and work in an instinctive and flexible system together on the pitch.

Cruyff also receives special mention for his approach to the game that emphasized morality via simplicity of play. While regarding football as a beautiful game, this was not merely based on entertainment value or competitive stakes that might be exciting, but also on efficiency and mental strategy, where the mind’s plan facilitates the body’s actions. This is a powerful consciousness that elevates a deeper existential, internal success over the fleeting external recognition of a win-lose result that was not achieved by a personal commitment to greatness via integrity and discipline.

Cruyff’s strong values toward the game and life are most poignantly embodied in his “14 rules,” which are displayed in each of 200 Cruyff Courts set up in countries all over the world for children to use freely to play football together.   These 14 basic rules are fundamental for all players in football match to follow, but they also provide a guiding philosophy for a values-based approach to life. Applying these as both personal and business management principles allows an individual to seek inner satisfaction and success via connections to and cooperation with others, personal accountability, authenticity, and informed ambition.

Cruyff’s 14 rules, annotated with suggestions for their application to corporate cultural principles in interests of promoting organizational and employee integrity, are as follows:

  1. Team player – To accomplish things, you have to do them together. – True success is achieved by focusing on collaboration and cooperation, not making isolated decisions in disconnected processes.
  2. Responsibility Take care of things as if they were your own. – Individual ownership of risks and recognition of each person’s role in their management is fundamental to any defense strategy as well as necessary for a genuine culture of compliance at all organizational levels.
  3. Respect – Respect one another. – Businesses must have zero tolerance for non-inclusive or abusive behavior; incidences of it must be addressed seriously and mitigated or prevented from reoccurring when possible.
  4. Integration – Involve others when possible. – Work together to share responsibility – invoking praise when duly earned, and liability when risks are not managed.
  5. Initiative Dare to try something new. – Foster and contribute to a culture of speaking up and out. Challenge heuristics and routines which can drive unethical decision making and narrow cognitive frameworks.
  6. Coaching Always help each other within a team. – Regard the organization as an interdependent unit to support an integrated style of decision-making and working.
  7. Personality Be yourself. – People should maintain their personal code of ethics and sense of right and wrong that they have in life, at work. Good people should not be afraid or unable to do good things.
  8. Social involvement – Interaction is crucial, both in sport and in life. – Be active champions for ethical processes and work together to promote them. Isolation is toxic to collective integrity.
  9. Technique – Know the basics. – Have or get the information needed to remain in constructive compliance with rules, regulations, and laws. Stay up to date or in front of them.
  10. Tactics – Know what to do. – Have a strategy that is flexible but driven by defined values and a thoughtful understanding of risks. Prepare work based on a plan and in agreed terms.
  11. Development – Sport strengthens body and soul. – Stay up to date or in front of the guidelines that form the controls framework. Feed-forward ideas, letting future productivity benefit from past performance.
  12. Learning – Try to learn something new every day. – Be open to and informed about different perspectives and opportunities. Seek knowledge and evaluate strategy based on it, not based on what is easy or fast.
  13. Play together – An essential part of any game. – Share values and manage risks by working together. Don’t be solicited for advice or seek an opinion; have an evolving and ongoing relationship.
  14. Creativity – Bring beauty to the sport. – Be passionate and on the lookout for novel approaches that will provide elegant solutions to dilemmas.

Cruyff’s 14 rules are about so much more than football or sport. These rules are succinct, relatable suggestions for how to live a moral life in harmony with others and in pursuit of self-sustaining accomplishments. This emphasis on values drives intellectual curiosity, physical effort, mental development, and individual accountability. These powerful principles promote integrity in all areas of life and work.

To learn more about Johan Cruyff and his undeniable legacy in football and leadership, check out this Football’s Greatest feature on him:

Also, make sure to read next Wednesday’s post, when this series continues on to look at Jim Valvano, a famed NCAA basketball coach and, later, broadcaster and motivational speaker, and his legendary speech at the first ESPY Awards in 1993 which makes a powerful, simple statement on integrity and internal success.

Round-up on higher education compliance

Many of the challenges of modern society in general are writ large in the world of higher education. The obstacles to ethical decision-making that are prevalent for individuals and organizations in business are also present in the educational environment. Campus culture often represents a microcosm of culture at large, with many complex social dynamics playing out in close quarters. Students as well as educators and administrators are confronted by complicated moral dilemmas as generational divides and differing expectations for justice, integrity, and duty of care coexist.

  • In taking the administrative decision to close a popular but controversial student dormitory, the Massachusetts Institute of Technology stepped into the thorny issue of informed consent. In order to support their choice to deaccession “Senior House” as a student housing, MIT used data from student surveys that were supposed to be anonymous (but were actually tagged with geolocation information) to collect evidence that the dormitory was the source of high drug usage, low graduation rates, and other behavior deemed unsafe or unacceptable by the Chancellor’s Office. This methodology of gathering data from students and their organizations without explicit expression of the purpose and its intended usage, and the questionable decision-making that stems from it, bring into question the ethics of universities’ relations with the students for whom they are supposedly providing a supportive and inclusive community. The closure of Senior House by MIT is seen as part of a trend of university administrations to exact more control over students’ lives, including conduct they may expect to be unrelated to their educational relationship with their school, such as things that happen off-campus, when school is out of session, or even online:  A Weird MIT Dorm Dies, and a Crisis Blooms at Colleges
  • Given the insular culture that many university academic departments are known for cultivating – focused on competition and comparison and often resulting in isolation and highly politicized decision-making – hostile working environments can quickly emerge on interpersonal levels. Unlike most at-will employees in the job market at large, however, many experienced professors have security of tenure and therefore their interactions with colleagues are not always checked by their fear of reprisal that could lead to losing their jobs. In some situations this can create workplaces that value and promote individuals for their academic prowess but turn a blind eye to claims of troubling personal behavior with colleagues or even students. Universities are often accused of failing to adequately investigate these allegations or not even providing a sufficient framework for safe and effective reporting. Hierarchical departments allow powerful, tenured professors to exploit their positions, with addressing toxic behavior taking a backseat to protecting those reporting harassment:  She Was a Rising Star at a Major University. Then a Lecherous Professor Made Her Life Hell.
  • “Call-out culture” – in which people, often in groups, point out statements or actions of others that they see as problematic or abusive and take down the person in question – has been fed by the public’s appetite for controversy and the prevalence of the internet and social media, where otherwise innocuous events between friends can be broadcast all over the world for commentary, criticism, and ridicule. While understandably some of the intent of call-out culture is to suggest and reinforce more positive, informed standards for interactions in a more inclusive society, this often goes too far. Far from just being restricted to taking down those who act with the intent to cause offense, or educating those who are unaware of the real implications of things they do and say involuntarily or too casually, this culture has fostered an environment where innocent behavior is subject to ridicule and derision. In the university setting, this fear of group criticism is very destructive to creation of community. Being unable to have dialog in the classrooms and student centers of universities has a major chilling effect on sharing of views and open learning:  The Destructiveness of Call-Out Culture on Campus
  • The call-out culture trend described above between students also exists on campuses between professors and other academics. Instead of playing out on social media, this dynamic takes place from editorial boards and academics who read papers in journals, or even just commentaries on papers in journals, and then pile on to criticize the author’s intent. Leaving aside the merit of any arguments made among these groups, the dynamic is the same, of stifling dialog and using groupthink to determine which expression is acceptable or even legitimate. Often this criticism is not very informed and even extends to having the outright intent of policing which and whose ideas are considered worthy of engaging with and debating about:  Academe’s Poisonous Call-Out Culture 
  • Another impact of social media and the internet on the classroom has been the rise of the “teacher influencer” – educators who are given free educational software or equipment, and even sometimes paid in addition, to use for their students in exchange for making posts online or giving talks about the products. These teachers can argue convincingly that their students benefit from access to these products, and that their business arrangements are taken on with the sole objective of benefiting their students in a time when school supplies and improvements are vastly underprovided and underfunded.   However, the standards for disclosure of these arrangements and the handling of the potential conflicts of interest that can arise even from the most innocent, helpful intentions are uncharted ethical territory:  Silicon Valley Courts Brand-Name Teachers, Raising Ethics Issues

In many ways the academic setting, for secondary education as well as at the university level, can be seen as an incubator for these social disruptions that occur in every area of contemporary life. Educational institutions are struggling with cultural changes that redefine the responsibilities in and limits of authority. Issues of consent, safety, cultural values, and conflicts of interest all prompt compelling compliance dilemmas in the higher education domain.

Compelling arguments to encourage business buy-in on compliance training

It is essential in all industries and job functions that employees act with integrity and in compliance with applicable rules and regulations, and this must be supported with adequate training. However, a common challenge for compliance professionals concerns how to successfully and sustainably convince senior business management to invest in and support compliance training as a priority. Regulatory changes and enforcement actions, and the necessity for ethical decision-making in the regular course of business, show us that compliance awareness should be valued.   Amidst the pressures of commercial activities, changing marketplaces and political environments, and time-sensitive daily necessities, though, training on compliance topics may not always seem urgent. However, there are important incentives which can be emphasized to business partners to encourage their buy-in on this critical training.

  • Compliance training fosters prized employee engagement and encourages transparency, which is necessary to mitigate reputational risk and enable whistle-blowers. Knowledge is power, and training empowers employees to use their understanding of the regulations and policies to show good conduct and to understand the importance of acting in compliance with regulations and policies, as well as the impact of unethical behaviour and the necessity of identifying and escalating misconduct where it occurs.
  • Once emboldened with knowledge by training, employees can take compliance topics forward into discussions and practical applications. Clarity and ease of discussion are important drivers of employee integrity. Simply put, individuals must first understand what they could do in order to follow a policy or regulation, before they can be asked to make a good choice in support of this. Libertarian paternalism suggests governance structures could affect behavior positively by influencing options available to deciders without disrespecting freedom of choice. Adequate training informs this approach, so that individuals have clarity and the ability to talk, ask questions, and work through scenarios in order to develop their own mental muscles on compliance topics on an everyday basis.
  • Employee awareness of compliance risk stimulates business management to act and react, creating a robust tone at the top. Senior management can be encouraged to contribute to a culture of compliance by a version of the “warm-glow” effect. Their buy-in is supported by an egoistic motivation derived from acting as role models to the employees they lead – a positive feeling that comes from being admired and adulated as an example. Employees who are actively informed about the values of compliance, ethical decision-making, and integrity will look for accountability and responsiveness from their leaders. When employees expect and emphasize this, management teams are enabled to reward good conduct and sanction misconduct, taking visible and precedent-setting action to recognize both.
  • The subject matter of compliance training is mostly accessible to employees at all levels. While some topics are more technical or demand a more academic approach to regulations and practices, the vast majority of compliance topics – to name a few, conflicts of interest, insider trading, information handling, money laundering and sanctions, anti-bribery, code of ethics – are, at least on an introductory level, practical and interesting to discuss without any prerequisite knowledge from the employees. In the post-2008 financial crisis world, many people have a good layperson’s understanding of these general concepts from the news. They even often have a desire to increase awareness and discuss these topics, but they need familiarity first. Basic sessions can give employees a first look, so that they are prepared to discuss with their colleagues and managers, while subsequent advanced sessions can develop comfort and expertise.
  • Targeted training on compliance topics helps to normalize expectations of risk ownership in an increasingly complicated regulatory and legal environment. Many employees may be open to challenging their ideas about their business practices that originated in the less comprehensive regulatory and legal landscape of the past, but they must be convinced to make compliance a daily consideration in their work. If they are not fluently aware of compliance concepts, then they may feel overwhelmed. This gives them the impression that either they are expected to be compliance officers themselves in addition to their regular tasks or that interaction with Compliance can only be a “tick the box” exercise. Neither outcome is desirable, yet both can be overcome by raising awareness and therefore promoting relevance.

The overall impression from the foregoing is that visibility with business partners is crucial for the compliance advisory function to succeed. All compliance professionals should seek to build relationships and interact on these compelling yet challenging topics in order to make them personally meaningful to business partners.