By Carl Oliver
Whistleblowing is trouble. Every business is vulnerable. Even when the business is innocent, handling whistleblowing is distracting and expensive.
Taco Bell in 2011 is an example. News reports said an ex-employee revealed its beef tacos were not 100 percent beef. Other things were mixed in with the meat. Taco Bell responded, “It’s a recipe.” Other ingredients give taco flavor and assure quality. It publicly listed all ingredients and bought ads to convey its message. Taco Bell successfully defended itself at a cost reported to exceed $3 million plus damage to earnings.
In theory, companies can prevent whistleblowing by using a simple principle: Build trust. In practice, some companies find that difficult to implement.
Theory says people feel no need to blow the whistle when they believe the company is open and honest. A company should help everyone feel safe raising any issue with managers. Everyone should believe managers will give their issue prompt, full and fair consideration.
But when managers try to create trust, they quickly encounter a significant barrier — people’s natural reluctance to speak up. People do not want to tattle or look like gossips, whiners or complainers. They do not want to embarrass themselves. They certainly do not want to risk being fired as troublemakers.
To overcome that barrier, companies need to do four things.
• Ensure a safe environment: The CEO and every subordinate manager and supervisor must frequently and publicly guarantee job safety for everyone who raises an issue in good faith. While someone occasionally raises an issue for a less than noble or mean-spirited purpose, people generally speak up because they want to help the company, not hurt it.
• Ask for feedback: Build into company processes routine and frequent invitations to speak up. Ask if employees see any downside to a plan. Ask if they see mistakes being made or about to be made. Praise people who identify or anticipate issues. Early discovery makes problems easier to fix.
• Listen: Make sure ethics training focuses on opening the door to safe conversation with managers. The Rudman report to the Boeing Co. highlighted how important this is. Managers leading group discussions with their employees effectively ensure employees see their managers are serious about ethics and willing to listen, even if someone brings them bad news. Those face-to-face discussions open the door for employees to feel they can safely raise any issue with their manager in the future. Managers should feel thankful when they learn bad news from a subordinate instead of being blindsided by a superior. Famous auto executive Bob Lutz once pointed out that it is the manager’s job to hear what an employee says, even if the delivery style is annoying or obnoxious, and to act responsibly on valid points.
• Create an open line: Select any company phone number to label as the “open line.” Advertise it on posters throughout the company. Assign a respected, trusted manager to answer it. People can call without feeling embarrassed. They can be anonymous if they like. Document every call, send the information to managers who can evaluate and act on it, and provide feedback to the caller. Don’t call that phone a hotline. Research shows people think they should call a hotline only when they see a crime in progress. An “open line” invites questions and discussion of uncertainties. Expect it to receive five times more calls than a hotline.
A corporate culture of safe, open communication costs nothing to create and prevents whistleblowing and ethics failures. Its return on investment in terms of expense and anguish avoided can be both enormous and tax free.
• Carl Oliver teaches business ethics in the California Lutheran University School of Management.