Four Ways Lying Becomes the Norm at an Organization

By taking aim at these factors, you can make it more likely your company will create the culture of honesty that you, your employees and your customers eagerly want.

Many of the corporate scandals in recent years — think Volkswagen or Wells Fargo — have been cases of wide-scale dishonesty. How can similar integrity catastrophes be avoided? Focusing on four organizational issues can make your company more honest and help avert the reputational and financial disasters that dishonesty can lead to.

The four organizational issues are:

A lack of strategic clarity: When employees perceive a schism between their organization’s stated identity and actions, it’s more likely they will withhold or distort truthful information. Even a small increase in strategic clarity can improve truth-telling behavior.

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Unjust accountability systems: When an organization’s processes for measuring employee contributions is perceived as unfair or unjust, it is more likely that people will withhold or distort information. Recent research confirms that unfair comparison among employees leads directly to unethical behavior.

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Poor organizational governance: When there is no effective process to gather decision-makers into honest conversations about tough issues, truth is forced underground. An improvement in governance effectiveness, as evidenced by widespread understanding of how decisions are made and by whom, yields more truth-telling. To improve your performance, ensure your meetings have clear decision rights, and set the expectation that those participating be honest, especially with bad news or dissenting ideas.

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Weak cross-functional collaboration: When cross-functional rivalry or unhealthy conflict is left unaddressed, an organization is significantly more likely to have people withhold or distort truthful information. Cross-functional relationships must be focused on creating value for the organization, with service-level agreements that define what each function contributes and built-in processes that allow an exchange of honest feedback.

Copyright 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate.