Business Forum: The gap between company codes and conduct

The National Football League and the Minnesota Vikings have been criticized for their handling of the Adrian Peterson situation. Earlier, in the assault case of former Baltimore Ravens star Ray Rice, the NFL drew scrutiny for failing to embrace its own official code of conduct. The gap between code and conduct has sparked a national debate on crucial topics.

But the NFL and Vikings organizations are far from unique.

In his book, "Conscience and Corporate Culture," business ethics expert Ken Goodpaster notes: "There are two languages of ethics in every organization. There is the language of espoused ­values articulated in corporate codes of conduct and credos; and there is the language of values-in-action, driven by the incentives, rewards, hiring and promotion systems of the organization. When the two come into conflict, the second language inevitably prevails."

In other words, most organizations have a stated ­purpose and values. And most employees clearly understand the gap between who their employers say they are and who they really are. This is a potent breeding ground for employee cynicism, but it also is where the opportunity for authentic leadership begins. Leaders who take responsibility for truly living their values and mission are intentional and proactive when it comes to closing the gap.

It's a slippery slope from minor mistake to colossal ethical failure splashed across the headlines. The public is mesmerized when the Achilles heels of our larger-than-life heroes are revealed, yet accept it as business as usual when the organizations where they work, play, worship and educate their children routinely fail lesser ethical litmus tests.

What would happen if citizens decided not to accept the status quo? What if organizations got serious about closing their ethical reality gaps? How might that inspire employees to reset their own personal performance standards? How might communities be affected? How would customers feel about doing business with companies that authentically and transparently operated in accordance with stated values?

We believe it would give employees meaningful work where they felt valued, challenged and engaged. It would give communities companies with character that inspires institutional responsibility and contribution by others. It most certainly would attract customers who value doing business with outstanding companies — and investors who enjoyed investing in profitable enterprises. This would raise the bar for all of us.

In the book, "Firms of Endearment," author Raj ­Sisodia and a team of Wharton School of Business researchers conducted a 15-year study of performance.

Among their findings: "Firms that are endeared seek to maximize their value to society as a whole, not just to their shareholders. They are the ultimate value creators: They create emotional value, experiential value, social value, and, of course, financial value."

People who interact with such companies — working for, buying from, investing in, and welcoming them as a neighbor — do so with enthusiasm and commitment. In other words, they are admired by all their stakeholders — employees, customers, vendors, communities and competitors — and, as a result, outperform the S&P 500 by a whopping factor of 14. (See www.firmsofendearment.com).

So why don't more companies commit to walking the walk that matches their ethical talk? Perhaps it is because it extols a price. It takes time and is hard work for leaders to wrestle with decisions, become sensitive to their impact on others and deepen their personal commitment to living with integrity.

This path is not for the faint of heart.

In the movie "A League of Their Own," actor Tom Hanks, as a tough coach, berates a young player to the point of tears. When she cries that what he expects is too hard, he passionately barks, "The hard is what makes it good!"

The same is true for walking an authentic walk as an organization. It may be hard, but it's also very good — for all of us.

We look forward to furthering this important dialogue through a "Breakfast of Values Champions" we are starting in 2015 at St. Catherine University in St. Paul. This speaker series will feature leaders and organizations who are willing to share best in class practices for values, purpose and performance alignments. By sharing how they navigate this challenging and rewarding path, we hope to inspire others to follow.