Here is an excerpt from an article written by Kevin Allen for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.The real drama however, unfolded not when the leaders of the company claimed, perhaps accurately, that they were unaware of and shocked by the actions of errant employees hacking phones, manipulating markets and cooking the books. The real drama happened long before — when these leaders played a major role in setting the cultural climate for inappropriate actions to unfold. In the race to find culpability, what doesn’t get talked about is the very climate that creates the conditions for people to behave badly and feel perfectly justified in their behavior. It is, in fact, the very same thing that creates an environment and provides the fuel for people to conversely do great, generous and far-reaching things. It boils down to cultural permission.
Take Enron, for example. Lurking amidst Enron’s excesses were the unmistakable cultural cues that I believe drove employee behavior. “We’re an aggressive culture,” “Guys with Spikes,” “Money is the only thing that motivates” and “Rank and Yank” are but a few of the statements heard. Is it any wonder traders thought they had the right to shut off electricity supplies and manipulate the market?