Compliance Culture

Practical insights for compliance and ethics professionals and commentary on the intersection of compliance and culture.

Selected TED/TEDx talks from Sheena Iyengar on choice theory

Check out these talks by Sheena Iyengar on choice theory.  Mostly from TED or TEDx events, plus one INKtalks video, these lectures provide a great overview to Iyengar’s brilliant work on the psychology of choice in a variety of contexts.  Through Iyengar’s theories of choice, the many influences choosing and decision-making can have over individuals’ lives become vibrant and clear.

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Insights from psychology for compliance officers

An informed approach to business compliance can be improved by taking theoretical insights from different fields.  For example, a corporate culture which seeks to promote ethical leadership, or provide support for making choices from a basis of integrity, or encourage employee engagement with compliance values, should take lessons from a variety of sources to make relevant and relatable appeals.

Psychology in particular has many affinities with a profession that is focused on culture and values, both of organizations and of the individuals within them.  Study of psychology in search of insights relevant to compliance ethics can be used in creating our culture, informing our norms, and helping us to develop and articulate our values.  All of these insights are necessary for cultivating a compliance culture and professionals in the compliance and ethics function have to be the first ambassadors for this.  To do this effectively, psychology can provide important guidance.

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Appealing to Myers-Briggs dichotomies in compliance communications

The Myers-Briggs Type Indicator (MBTI) is a set of personality types that categorizes individuals’ experiential preferences. The MBTI has become very popular for use in business settings, for managers to determine how to develop employees or build teams as well as for individuals to analyze their own way of working and define their particular world view and tendencies in interacting with others, based on these preferences.

The MBTI classification system is fundamentally based upon the presumption that humans have four main psychological functions, or dichotomies, through which they view the world. These are thinking (T), feeling (F), sensation (S), and intuition (N). Thinking and feeling are the functions people rely upon for judgment in decision-making. Sensation and intuition describe how people perceive new information. Taken together, one of these four functions will be naturally dominant for each person the majority of the time.

Added to these functions are people’s attitudes, expressed by the terms introversion (I) – a preference to operate internally, focused on reflection and ideas – and extroversion (E) – a preference to operate externally, focused on behavior and people. This relates to how people prefer to live their “outer lives” and is not necessarily as simple as defining a person as “shy” or “outgoing” but looks deeper into how people get or spend their energy and whether their information-processing, personal focus, and pace is determined inward or outward.

Finally, the MBTI also incorporates lifestyle preferences, identifying that people have preference for using either the judging (J) functions (thinking or feeling) or the perceiving (P) function (sensation and intuition).

These eight psychological functions and preferences – four sets of two each – can be mixed and matched among each other in different combinations, resulting in the sixteen MBTI distinct “personality types.” In any given group there is likely to be some mix of these types, sometimes more diverse than others. Each type brings with it some indications for the person may behave in an individual or collective setting. Therefore understanding the elements of these different types can be useful in fine-tuning messaging to have maximum appeal to one, some, or all of them.

Based on the above, there are four dichotomies to the MBTI. In each dichotomy, individuals select from two letters (T for thinking versus F for feeling, for example) the one which most accurately, if not completely, seems most accurate in depicting their personality types. The differences between these four dichotomies are important to understand and useful to take advantage of in tailoring communication across organizational levels to raise compliance awareness.

  1. Introversion (I) or Extroversion (E): Preference for Introversion suggests an inward focus, with more contemplation and observation in learning or gathering information. I types would enjoy e-learnings, reading guidelines and policies, or other self-paced activities. Preference for Extroversion, on the other hand, indicates a suitability for fast-paced outward focus. These are the eager participants in dilemma sessions or group trainings who like to work with others and develop their ideas out loud, getting energy from quick progress of talking through learning materials.
  2. Sensation (S) or Intuition (N): Preference for sensation means that concrete, practical information will be the most appealing to these individuals. Communications should use clear and literal descriptions based in reality. Those who prefer intuition, on the other hand, may be more likely to dream about what could be rather than what is. Contemplating business cases and dilemmas would be fun and enjoyable for them.
  3. Thinking (T) or Feeling (F): Those who lean toward Thinking will respond to decision-making that is promotes rationality and justice. A rules-based approach to communicating compliance principles will evoke their sense of reason and equity and make the objectives relatable. On the other hand, people who prefer Feeling will benefit from a values-based approach. Playing up personal morality and situational empathy is more effective for them.
  4. Judging (J) or Perceiving (P): Judging is aligned with a preference for planning and methodical assessment. These people will be convinced of the value of a compliance program by, for example, formal risk inventories and control framework evaluations, and coordinated, long-term implementation plans with steps and phases for their goals. People who prefer Perceiving, on the other hand, need a flexible view. This is challenging to adapt to fixed rules and regulations, but offering creative approaches to those can be an engaging possibility.

For more information on the MBTI and its four dichotomies, check out this handy interactive chart.

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Selected TED/TEDx talks by Dan Ariely on honesty, motivation, and choice

Dan Ariely is a professor of psychology and behavioral economics. He is well-known for his books in these fields as well as for his popular and admired TED talks. Ariely is an extremely effective communicator because his observations incorporate both psychology and business, blending the internal and external motivators for behavior. In this spirit, Ariely is able to debunk assumptions about conduct and provide explanations for instincts, two powerful sets of insights for compliance and ethics.

  • Meaning in Labor: Perhaps people’s assumptions about why we work and what we value most in our work cultures are wrong. Maturing from an idea that most people would rather not work and only do so to make money helps to show that a search for meaning (much as described by Holocaust survivor and psychologist Viktor Frankl in his work on existential analysis) is the most powerful and provocative driver of human labor and achievement. Simply put, meaning gives motivation, and having a purpose to the work performed encourages people to invest in it. The idea of giving purposeful work a priority that is equal to or even sometimes greater than profitable work is novel and challenging. However, this speaks directly to the importance of a robust compliance culture and a corporate identity that promotes ethical decision-making and acting with integrity. These values drive meaningful engagement and therefore can contribute to a more positive working environment and sustainable business.

 

  • Money Changes Everything: Taking the suggestion of the importance of meaning as the true driver behind human behavior (both inside and outside of work) forward, what then is the true impact of money? Clearly the power of money is a timeless and universal notion, but perhaps its actual effect on human behavior is not so straightforward. Money changes the tone of all interactions; adding the financial element to these relationships is transformative and perhaps demotivating. Therefore how do people’s decision-making processes and motivations change between their conduct in their private life, where money is not inherently a factor, and work life, where everyone is paid to be engaged together? Interestingly, this talk was delivered at Burning Man, where exchange of money is mostly not permitted.

 

  • The Unexpected Joys and Problems with Creation: The sense of accomplishment from successfully problem-solving and completing a difficult task may actually be the key motivation behind doing challenging or unpleasant things. The harder something is to do, the prouder people feel about persisting and doing it. Further, the sense that other people will feel this pride too or that the difficult work can benefit others is also a motivating factor. Not only does the altruistic sentiment make people more motivated, it may also make them more honest, as the force of “prosocial behavior” encourages people to engage in better behavior for a common good. This has obvious implications for compliance; a corporate culture which positions integrity and ethics as a core value and rewards it visibly will speak collectively to all these motivations and therefore drive productivity and engagement.

 

  • Self Control: Another important and interesting area of Ariely’s scholarship is in the study of self control. Self control can often be the interference between our long-term goals and our short-term desires, or our internal instincts and the external factors they face. Facing the trade-offs implied by these dichotomies is challenging. This often leads to over-emphasizing present impact of the decision-making over the future consequences. Encouraging people to consider and not discount the considerations of the future is very important for directing the impulse of self control into a more balanced and sustainable influence.

 

  • Temptations and Self Control: Continuing on the theme of struggling to balance current interests with more remote future outcomes, this lecture encourages people to understand what creates the gap in their self control. With this insight in mind, the trade-off becomes more manageable to consider in a more holistic way. Motivations to value future priorities or avoid future problems could include targeted rewards and using rationality against instinct to adjust gain-loss perceptions. This is easily applicable in the corporate environment, where performance evaluations and business strategies should be designed with both short and long term effect analyses in mind. This way, growth will be sustainable and values will be maintained.

 

Ariely’s presentations on people’s choices – including whether to lie or cheat, or not to – go directly to the meaning of why people do what they do, and what factors exist that may change or impact that. Organizational and individual integrity can be sourced back to these motivations for honesty and self-control, and therefore the studied application of Ariely’s insights to a compliance and ethics program is very valuable.

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