At the end of every fiscal year, businesses reconcile their financial statements and go through an audit. That way, they can assess the accuracy of their recordkeeping and get an overview of their financial performance.
At the end of a calendar year, businesses that have a strategic plan in place measure progress towards bringing about changes and advancing in market share. Executives and managers assess how close the business was in achieving performance objectives.
At some point during a year, employees in many businesses go through an individual performance evaluation. In the best situations, the business conducts a 360-degree evaluation where the employee can self-evaluate and evaluate also how the business supported him or her in achieving key objectives. The supervisor or manager similarly evaluates the business and the employee's work as well. Most of the time, this process is one-way, focused on the employee.
But there's another end-of-year assessment: an ethics assessment. Many businesses and organizations never go though an ethics assessment, annual or otherwise. Yet this may be the most important review any business can conduct to determine whether the way of doing business is consistent with the way of being business.
Moving through an ethics review assumes the business has a stated set of values by which it operates. Many businesses and organizations don't have a values platform in place. What are some results? One is to make costly decisions that drain needed resources. Another is dealing with an employee who's created problems for management or brought the business into disrepute or legal trouble. One more: a hostile work environment that impedes productivity and creates poor work morale.
Clearly, no business runs perfectly or operates error-free-especially when considering people are involved in decision-making. An ethics assessment reviews key decisions in the business year and raises key questions. Did we make the right decisions? On what basis were they the "right" decisions? How did the values we share as a business help us in our decision-making?
Another approach-and perhaps a more familiar one-is to look at the decisions that went wrong, produced bad results, or created major headaches. So often, businesses review the symptoms of problems-a financial loss, angry customers, litigation, or poor morale-and try to come up with immediate solutions and fixes. There's no doubt executives and managers often need to deal with problems and crises right away.
An annual ethics assessment, however, looks at several problems that occurred in the course of a year and asks, "Is there an ethical problem here? Are we not living up to who and what we declare ourselves to be?" Often, we can find recurring patterns in the problems. They usually involve ethical lapses.
One more approach to an annual ethical assessment is to conduct surveys in the business among employees, customers, vendors, and business partners. If a statement of core ethics exists, the survey can test out whether we really are living up to our own standards-particularly when we can reference some specific or concrete situations in which those being surveyed can score the company's performance.
For example, one of our core ethical standards may be, "Seek the valued input made by customers, employees, and the communities we serve." Each of these stakeholders can document how and when their input really was valued-or when they were told, quite literally, to mind their own business. Some companies use business tools that compile responses to standard questions-sort of like a customer service or a quality survey, only this time focused on key standards by which the company says it does business.
If a business never has been through an ethics assessment as part of its annual business review, the work can be pretty daunting. After all, how does a business evaluate something as "soft" as ethical statements? Changing this mindset may be the first step towards connecting standards of business with results in business. It may mean the business really does have to identify its core values in writing for the first time.
For those businesses that have ethical standards and values statements, the growth step may be to connect ethical standards directly with business practices. They can test the impact the standards have on regular business decision-making and employment practices. They can begin to see consistent attention to ethical standards can have a vital and positive impact on quality, productivity, morale, and market leadership.
When is your business going to audit its ethical standards? Why not this year? IBI