Leading Blog


You Can’t Order Change: Making Ethics and Compliance a Clear Competitive Advantage

When Jim McNerney became CEO of Boeing in 2005, change wasn’t an option. It was mandated. In 2005 Boeing was facing investigations into illegal business practices, there was the sex scandal, revenue was down, and key people were jumping ship. In short, it wasn’t the place to work.
You Can’t Order Change

But even when everyone agrees that change is necessary – even vital – it doesn’t come easy. It still has to be approached in a careful and respectful way. You Can’t Order Change, by Peter Cohan, is about how McNerney brought about that change in Boeing. How he cleaned up the mess and changed the culture and revitalized the organization.

Probably the biggest task that faced him was the quagmire created by years of costly ethical problems. He had to settle a lawsuit with the government and create a culture of ethics and compliance. This has to be done by example and system changes that encourage ethical behavior and compliance.

He said in Boeing Frontiers, “I plan to make leadership development a focus across the company because I believe that as we strengthen our leadership capacities, we can have a positive impact on the company's overall performance. As I've said before, better leaders make better companies. And effective leadership, at all levels of an organization, is based on a foundation of trust, integrity and escape-free compliance. As we turn up the gain in leadership-development training, we will embed in it an equal emphasis on how leaders can lead with ethics and integrity.”

Cohan writes that McNerney made sure that ethics wasn’t a passing fad, but a value that had teeth in it. If the leaders of the organization “have not been behaving in a way that’s consistent with Boeing’s values, he expects them to change their behavior. And if they don’t meet McNerney’s expectations, they lose their leadership roles.”

Step one for McNerney, of course, is getting the leaders to act ethically; to set he example. Cohan cites this statement from McNerney:
We also realize it all starts with leadership. If an organization’s leaders don’t model, encourage, expect and reward the right behaviors, why should anyone else in that organization exhibit those behaviors? Companies have to take the hugely important step of driving ethics and compliance through their core leadership and Human Resources processes. This must be … and must be seen to be … a central part of the whole system of training and developing leaders and of the whole process of evaluating and promoting people. This is the key.”
Critical also to this change is a system that supports and rewards people for getting results ethically and gets rid of people who don’t. Cohan writes, “McNerney let people know that he wanted them to discuss problems and not bury them.” If people didn’t talk about ethics and compliance, he would bring it up. “Ultimately, McNerney want to avoid surprises about ethical problems that originate at lower levels. I know and you know … that one of the absolute perquisites for success in ethics and compliance is the belief that it is OK for people to question what happens around them.”

McNerney’s methods and approach to change have gotten him dramatic results and they are worth studying.

Posted by Michael McKinney at 01:35 PM
| Comments (0) | This post is about Change , Ethics , Human Resources , Management


SAP Concur


Leadership Books
How to Do Your Start-Up Right

Explore More

Leadership Books
Grow Your Leadership Skills

Leadership Minute
Leadership Minute

Leadership Classics
Classic Leadership Books

Get the LEAD:OLOGY Newsletter delivered to your inbox.    
Follow us on: Twitter Facebook LinkedIn Instagram

© 2019 LeadershipNow™

All materials contained in https://www.LeadershipNow.com are protected by copyright and trademark laws and may not be used for any purpose whatsoever other than private, non-commercial viewing purposes. Derivative works and other unauthorized copying or use of stills, video footage, text or graphics is expressly prohibited.