ICFM Magazine, August-September 2004
Protecting your funeral home or cemetery from lawsuits and bad publicity isn't just a legal and public relations issue, it's an ethical one. Creating an ethical workplace is not an indefinable goal; there are specific steps you can and should take to make sure you and your employees are behaving ethically to each other, to other businesses and to the customers whose trust we need.
(Editor's note: This article is excerpted from a workshop at the ICFA 2004 Convention & Exposition in Nashville.)
Today in the business world in general there seems to be a problem with a lack of ethics. We've all read about corporate wrongdoing, improper trading practices on Wall Street and, within our own profession, the Tri-State Crematory scandal.
In our profession, we rely on our families' trust, and in the current business climate we have to work to keep it. As managers, we believe an ethical organization can be created.
Successful leaders need to see that having an ethical system in place is important for the long-term success of the company, and that like most other systems, the pieces are interrelated—it's not good enough to have one piece, you really need a complete system.
You need to identify the ethical values important to you, and you need to communicate them to your staff. You yourself need to live by those values and hold the people who work for you accountable for doing the same.
You need to have ways to reward, recognize and celebrate ethical behavior when it happens. You need to have guidelines in place so people know what to do, whom to go to and how to get help if they are unsure about how to deal with something.
As a profession, we continue to base a majority of our sales compensation on commission and that can make it difficult, when you are rewarding only productivity (paying people according to how much they sell), to also stress the importance of ethics and the long-term health of your company. Think about that when you evaluate your compensation package, when you hire and train salespeople.
Finally, you need to monitor and audit constantly, because you can't just trust blindly.
Examples from the Field
In addressing this topic, we need to include a disclaimer: We know we're not perfect; we're not setting ourselves up as the epitome of ethical behavior. But this is a topic we are passionate about, one we try to address in our own organizations.
Three examples from our own workplaces:
• Toson Hentges: We have been doing random drug testing at our company, and not long ago one of the employees selected refused to take the test. He was a fairly valuable sales counselor, and I tried to convince him to take the test, but he refused. I gave him an ultimatum: Take the drug test or go to drug counseling. He quit. I was very upset, because, as I said, he was a valuable counselor and I didn't want him to leave, but I did not make an exception for him.
• Thompson: Years ago, when I hadn't been at Mountain View very long, I happened to learn that a body we had received from the medical examiner's office had been buried without the viscera being replaced in the abdominal cavity. I was appalled—this was part of the body that hadn't gone in the ground. I called the family, told them what had happened, apologized and asked what we could do to try to make it better.
To my great amazement, they said they were shocked that I was honest enough to tell them about our mistake, since there was no way they could have known if I hadn't. We talked about the situation and they were satisfied with the solution we reached, which was to commit the additional remains to the ground in a vault above the casket.
Over the years, I've had to deal with other difficult situations, some harder than that one, and I have yet to be disappointed by a family's reaction. My staff knows that when we make a mistake, I'm going to call the family. I make it clear to our staff that this is how we handle things. I've made that a kind of mantra that I keep in the back of my mind: "We have to be willing to tell families when we make it a mistake." I don't ever want to lose their trust.
• Thompson: In the category of "rules apply to everyone," I had a problem with one of our sales counselors, who had a tendency to "forget" that we have a lead protection system. This counselor got a call from a friend and, without checking the lead protection system, wrote up a funeral plan worth several thousand dollars for this person, who was an active lead for another counselor. The customer called to tell me she would cancel the contract unless her friend got the commission, but I felt it was important for my sales counselors to trust what I tell them. We returned the customer's money, and I think it will be a very long time before that sales counselor ignores our lead protection system again.
Avoiding Frog Stew
People who end up doing unethical things don't necessarily start out as bad people, as people whose goal is to cause trouble for your cemetery or funeral home. It often starts out very small. Maybe someone takes a little bit of money, gets away with it and from there, the situation snowballs.
We call this "boiled frog syndrome," or "frog stew." When you throw a frog into a pot of boiling water, its reaction is to jump back out, and it survives. But if you put a frog in a pot of room-temperature water and then gradually bring the water to a boil, the frog doesn't sense the temperature change, doesn't hop out and gets boiled to death. The same thing can happen with people and ethics. Ethical behavior slowly gets away from us and before we know it-frog stew.
How do you go about ensuring ethical behavior within your company? You have to develop an ethical system, just as you have a financial system and a marketing system. After all, the presence of ethical behavior is just as intrinsic to long-term organizational success as effective communication, good planning or proper financial management. Once that system is in place, it must be supported by the company leaders and management practices. It can't be put in place and neglected; it must be supported all the time.
The first step is to identify the ethical values you want upheld, make them crystal clear and make sure they address everyone. Don't think only about how your employees interact with customers; think about how they interact with each other, with vendors and with the community at large.
Don't make assumptions. You may think that all of your employees know that it's not OK to go out to real fancy dinners with a vendor on a regular basis and refuse to see any other vendor with a similar product, but maybe some of them don't know. You need to make sure the values you want upheld are well communicated:
• Get your management team to write down your ethical values. It forces you to be specific, and it forces you to be accountable as managers. If you're going to put something out there for employees to follow, it's important that the managers do so.
• Make sure they're widely disseminated. I think all of us have had the experience of walking into a business where they have a section of a wall beautifully decorated with a picture of the founder, and maybe a list of the trustees and a copy of their mission and values statement. But if that plaque on the wall is the only place your values statement appears, you are a company looking for trouble.
You need to talk about your ethical values in the employee newsletters, in e-mails at company meetings, during performance reviews. You need to be talking about it all the time. Otherwise, next thing you know people are taking longer and longer lunch hours. After all, who's going to notice? And then maybe a sales counselor decides to cover the down payment in order to make a sale. After all, won't the boss just be happy about the sale? It's very easy to talk yourself into moving just one step away from OK, and pretty soon you're several steps away and then-frog stew.
• Talk about your ethical values when you're interviewing job applicants. Remember, it's a two-way process: You're evaluating candidates and they are evaluating your company. It's only fair that you tell people what your expectations are and that you make sure they know you take these ethical standards seriously as a company.
• Talk about ethics all the time. To quote Gary O' Sullivan: "Talk about it till you puke."
Embedding Values in Your Company's Infrastructure
• Consider ethics in hiring. Evaluate how well job candidates seem to fit in with your values. When someone is hired, include another discussion of values in the orientation process.
• Make sure your company's leaders and managers live the values they are preaching to employees. As a supervisor, you need to act like you're being watched, because you are. Every day, every action, your employees are watching you. Are you doing what you tell them they are supposed to do?
In doing research for this presentation, we read about a consultant working for a large Fortune 500 company. He was talking to the head of human resources, who was really upset because so many people in his department were cheating on their expense reports. "We're supposed to be setting the example for the whole company," he said, "and my department's one of the worst. I can't figure this out."
It didn't take the consultant long to find out that the department head, who traveled all the time and was entitled to fly first class, was trading in his first-class tickets and pocketing the difference. So it really was no surprise, for example, that his employees were charging the company for meals they could have had but didn't.
Your staff looks to you to set the tone, to set the example. You need to realize that the little things count.
Thompson: As an example, one day I caught myself doing something I shouldn't have. There was someone I didn't want to talk to, and instead of telling the switchboard operator to say I was unavailable, I told her, "Just say I'm not here." That wasn't true, and by asking her to lie, I was saying to my employee that under certain circumstances it's OK to lie.
Now, how long do you think it's going to take before that employee starts thinking to herself, "Well if it's OK to lie there, then here's another situation where it might be OK to lie. Cindy's not here to ask, but it was OK over there, so I'll do it over here." And if you've got 10 or 20 or 50 employees, that could multiply exponentially. You can't be there all the time, so how are you going to know when they do this?
You have to show zero tolerance for ethical violations. Decisions shouldn't depend on how productive an employee is. As in the case of the valuable sales counselor who refused to take a drug test, you have to make your decisions in terms of the values you have established.
• Avoid establishing internal conflicts. Make sure your company's reward systems and performance appraisals are congruent with your ethical values.
If you are telling employees, "We love our customers and it's important for you to spend a lot of time with every family—we want you to take all the time it takes," but then all they get rewarded on is the numbers, you've created a problem.
Maybe you've got someone who isn't quite as productive as some of your other sales counselors, but their customers love them. They get the best referrals because their families trust them. Are they not valuable? We say they are valuable to your company, but if you say, "We value people who value our customers" on the one hand and on the other hand, base payment just on numbers, you're putting employees in a no-win situation. (We don't mean to say that people who care about their families don't get the numbers; we're exaggerating to make a point.)
• Watch for and address external conflicts. The funeral and cemetery profession may not be as open to them as some other businesses, but we should be proactive.
Thompson: We have someone at our cemetery who works with outside construction companies who are doing projects nearby and want to bring us excess dirt from job sites. We make it very clear that the choice of which companies are allowed to do this is not a matter of slipping our employee some money.
Building an Ethical Toolbox
Your company has to build for each of your employees their own ethical toolbox, because they're not going to be able to call you every time and say, "I'm not sure what to do." You need to build their skills and abilities.
Awareness, skills and values are needed for an ethical toolbox.
Awareness means you need to raise the issue of ethical dilemmas to your staff. They need to learn to be aware that ethical behavior is something you want them to be careful about. Build their awareness so that when something is going on that's not quite kosher, they'll realize it.
Next, you need to make sure that they have the skills to deal with any questions or problems that come up, or that there are resources at your company they can turn to. You can put systems in place to help your employees when they are faced with an ethical dilemma. One company we read about had an 800 line for people to call when they thought they had come across unethical behavior.
And third, you need to make sure that employees perceive ethical behavior as something they need to practice to be successful at your company.
If you have awareness without skills, for example, you've got a problem. An employee might say to himself, "I don't think that's really cool, he's giving all the business to his brother-in-law," but if your company hasn't told employees what to do in a case like that—there's no 800 number to call, there's no one on staff designated to tell—the employee is kind of stuck.
You want your employees to realize what your ethical values are, to be aware of problems and to have the ability (skills) to do something about them so that when they become aware of a problem or are faced with an ethical dilemma of their own, they will act.
In doing our research, we ran across a page from the Enron code of ethics, distributed in 2000, which wasn't that long ago. Let's look at a few excerpts:
"Moral as well as legal obligations will be fulfilled openly, promptly and in a manner which will reflect pride in the company's name.... Employees will maintain the confidentiality of the company's sensitive proprietary information and will not use such information for their personal benefit…... Relations with the company's many publics—customers, stockholders, government, employees, suppliers, press and bankers—will be conducted in honesty, candor and fairness."
These statements probably look familiar to a lot of us. You may have something very similar in your own company's employee manual. We all know what happened with Enron: They ended up serving frog stew. So simply putting a code of ethics in place is not good enough.
Enron probably handed this out to every employee, maybe had all of them sign an acknowledgement form. But it looks like they never followed up. We need to educate our employees about ethical behavior all the time, on a daily basis.