A few months ago, Mike Zychinski stood in the St. Louis Cardinals’ Busch Stadium as his redbirds played the Chicago Cubs. The sellout crowd numbered around 45,000, a number with special significance for Deloitte’s chief compliance and ethics officer. As he took in the smell of popcorn and hotdogs, he thought, “This is as if I took our U.S. firm and shoved everybody into this stadium for a day. This is a microcosm of the world in which we live. Is it reasonable to think there isn’t going to be an outlier or two sitting in this stadium?”
Those outliers — employees who for whatever reason stray from Deloitte’s standards of ethics and compliance — are the margin of error in his job that Zychinski does his best to minimize.
“We aspire to zero defects,” he said, “but we have to have the right programs and we have to be vigilant so that when somebody does step outside the bounds, we know what we’ve got to do.”
That hopeful-yet-pragmatic ethos toward ethics is prevalent among those driving Deloitte at its highest levels. The organization doesn’t just settle for meeting high standards, it prefers to be the vanguard in its industry. To that end, Deloitte emphasizes its historical commitment to ethical excellence while looking for new solutions that embed responsibility into its working culture.
That dedication starts with the upper echelons of management, Zychinski said. The executive officers and board members can’t just throw token support behind ethics and compliance, he said. For it to be successful, those in top positions have to display real commitment to a company’s ethical standards, and it has to trickle down to everyone below.
“I think it starts at the top and cascades down,” Zychinski said. “But if it doesn’t get into the cultural fabric or the organization, it can only carry you so far. I heard an interesting way to put it — and I’m not a creative guy so I don’t take credit for it — it’s not just the tone at the top, it’s the mood in the middle and the buzz at the bottom.”
Luckily for Deloitte, CEO Barry Salzberg is devoted to setting the right tone at the top. Salzberg told Ethisphere he is proud of the culture that he’s helped foster at the organization in his 32 years working in various capacities for Deloitte. He’s unswerving in his conviction that people are his company’s greatest asset, and it’s worth investing in them to ensure loyalty, productivity and responsibility.
“We’re deeply invested in talent acquisition, we’re deeply invested in culture building, and we’re deeply invested in diversity and inclusion,” Salzberg said. The resources Deloitte commits to these areas are strictly non-negotiable, he added. “You can’t take your foot off the pedal because it’s what drives our culture.”
For example, Salzberg pointed out that Deloitte is regularly recognized as one of the top companies for working mothers. In fact, the company ranks in Working Mother magazine’s hall of fame. Salzberg credits Deloitte’s parent-friendly environment to a culture that values working mothers as individuals and as loyal, productive employees. The pro-women mentality also helped the company become more diverse: In the last 15 years, the company moved from having 97 women partners to more than 1,000.
“One might say that could have happened anyway, but I don’t think so,” Salzberg said. “I believe the energy and attention given to it mattered.”
One of those women now serves as Deloitte’s chairman of the board. Sharon Allen explained that the women’s initiative is a perfect example of why ethics and smart business go hand in hand. Growing up on her family’s farm in Idaho, Allen learned early the importance of ethical behavior in life and in the workplace. There she also learned that setting high expectations is the best way to encourage solid ethical decision making, something she currently sees reflected throughout Deloitte’s culture. One important contribution to that culture is the success of its Initiative for the Retention and Advancement of Women, which increased loyalty and productivity, and made Deloitte more attractive to top talent.
“Our Women’s Initiative, which we started 17 years ago, has had a tremendous impact on our culture for both men and women. While we are well recognized as a leader in advancing women in the workplace, if we had undertaken it for the sole purpose of receiving accolades it would never have worked,” Allen said.
Zychinski added that it was precisely Deloitte’s commitment to integrity and trust that first drew him to the company 33 years ago. The firm struggles for that identity, he said. It fights hard for people to associate the word “integrity” with Deloitte’s core values.
“If I were a young person working toward their first or second career opportunity, that’s certainly something I’d be thinking about,” he said.
While bottom line impact can be the primary motivator in many corporate environments, it is important for business leaders to consider how setting high ethical standards will affect their organizations most valuable asset: brand reputation, Allen said. At the end of the day, fostering a values based culture makes good business sense.
“If you’re only focused on profit at the expense of ethics, you may be putting your company’s reputation on the line,” Allen said.
From Allen’s perspective, many of the challenges that organizations are facing in today’s economic downturn are in part a result of a breakdown in ethical decision making by leadership. A strong ethical compass is essential for business success, said Allen. The best leaders know there is no client, no fee, or no transaction worth compromising the values of their organization for.
Unfortunately, like Zychinski illustrated with his “Deloitte-filled” stadium, it sometimes only takes one careless individual to sully an entire company’s reputation. That can be a hard message to get across to an employee at a firm as large as Deloitte, though. Zychinski knew he needed some way to emphasize that point, so he and his team created The Power of One, a campaign designed to underscore how much responsibility rests with each and every employee.
“The power for one person to impact the reputation of Deloitte, whether for the good or for the bad, is unparalleled in today’s world,” he said.
In a concrete example of the company’s full-throttle approach to ethics and compliance, the board directed enormous time and personnel resources to the campaign. Six months later, Deloitte rolled out its primary Power of One training vehicle, an online workshop showcasing scenarios that highlight how a single person can have major good and bad impacts on the company. The scenarios depict real-life concerns tailored to individual audiences, Zychinski said. And it’s not your typical soft corporate class with easy (and nigh-meaningless) questions and answers: The topics are tough, challenging and hopefully insightful, he said. So far about 15,000 employees have taken the class, Zychinski said, and the response has been overwhelmingly positive.
If it reduces the risk of harm to the company’s reputation, Salzberg said the resource investment is worth every second and dollar. “I told Mike [Zychinski], ‘Under no circumstances are we to be constrained by our operating costs in this area,’“ Salzberg said. “’If you need 10 more people, then we’ll give you 10 more people … and that will just be more profit we’ll make in the short run.’ That investment protects our brand, protects our reputation and ultimately increases our productivity.”
That philosophy stands in contrast to how many other companies have responded to the down economy. Fortune 1000 companies are on average spending 18 percent less on their ethics and compliance budgets during the current recession. But it’s during times like these that it’s most important to invest in your employees, Salzberg said. Your employees are trying their hardest to demonstrate their value and it’s worth it for companies to reinvest the fruits of those efforts back into them and the culture of the organization. Ethics in the workplace is a major priority at Deloitte. You simply can’t cut back on the things you consider essential to your company’s success, he said.
To make sure Deloitte stays on the right track during troubled times, the board and executive officers adopted an open communication plan that allows them to listen to and engage with each other. In many companies, the ethics and compliance office is housed under general counsel. At Deloitte, Zychinski reports to the chief quality officer, who reports directly to the CEO. When it comes to day-to-day activities, Zychinski works mostly with the CQO, but he also meets quarterly with Salzberg, and regularly presents to the board. And Salzberg stresses that his phone line is always open to Zychinski, meaning that the two are in contact whenever issues arise.
“I consider our reporting structure to be a best practice,” Zychinski said.
Allen agreed, and added that sometimes clients even ask her how they can incorporate Deloitte’s ethical commitment into their own organizations.
“I had a client ask once, ‘How do I get my executives to talk more openly about the importance of good ethical behavior?’ He wanted to know how he could get his leaders to be more transparent about it” Allen said.
Salzberg hopes the current economic woes will be a sort of teaching moment for many companies during which they learn the answer to that question: It all has to start with conviction from the top. He’s optimistic that an economic recovery will usher in a business environment that’s more robust in terms of non-financial excellence, with an emphasis on a responsible regulatory environment, stronger and more respected trust in businesses, and more attention to ethics and compliance.
“It isn’t just about waiting for things to happen,” Salzberg said. “You’ve got to own the activity that drives the behavior you want, and it has to come from the top.”
