Learning From Penn State To Speak Up, Not Cover Up

While the Euro Zone threw global markets into turmoil last week, all eyes here in the U.S. were riveted on Pennsylvania, as a shocking story of transgression and deception unfolded at Penn State. The story that held our attention is a familiar one -- part personal, part professional.

The facts go like this: someone with significant power and privilege disappoints us to a degree that is unfathomable, while colleagues, authorities and the professional institutions they represent fail to respond to data or even to explicit warnings to do what is necessary to stop the perpetrator and protect the victims.

Eventually, the shock wears off and the story recedes from the front page. Ultimately the story takes a back seat to other news.

Then we hit repeat.

What professions and institutions am I talking about? The Catholic Church certainly comes to mind. But so do Enron, Arthur Anderson, Goldman Sachs and similar stories from a decade of malfeasance in business and capital markets.

Professional failure is rampant -- the failure of the Securities Exchange Commission to act on the early warnings about Madoff; the failure of credit rating agencies to put two and two together and face down conflicts of interest of their own making; banks, accounting and law firms that parlay the business of tax avoidance into profit centers; a dozen or more cases of out-sized risk-taking in financial institutions playing with other people's money; a global oil company that placed short-term financial goals before prudent investment in disaster prevention; public and private institutions that fail to act in the face of insider trading, sexual harassment, false disability claims, rampant mismanagement and run-of-the-mill cheating. The examples go on and on.

Occasionally a real hero seems to emerge, like the much-celebrated Sherron Watkins who courageously put her job on the line and went to the top to expose malfeasance at Enron. But even these examples of heroism leave me unsatisfied. By the time Watkins emerged on the scene, the horse was out of the barn, and the barn itself was burning out of control.

Meanwhile, as the back story emerges in all of these examples, it becomes apparent that an entire cast of characters -- in the dozens, or even hundreds -- knew enough of the story to make a real difference while there was still something to save.

Why do institutions fail us, and more importantly, fail the victims of the crimes? Where are our values? What can we do about it? I think it starts with a radical reform of how we teach ethics and judgment.

Three things top my list, with full credit to the work of Dr. Mary Gentile of Babson College, Author of Giving Voice to Values, a path-breaking book and just-in-time curriculum for our age that is chock full of guidance on how to effectively stand up for your values when pressured by your boss, colleagues, customers, or shareholders to do the opposite.

Ethics teachers act like the tricky part is knowing what is right in a given situation.

They are incorrect.

They teach frameworks and decision rules for making the right decision in a moral dilemma. As the numerous examples of institutional failure illustrate, that is the least of our problems. Engineers already believe in safety first. Bankers know the difference between prudent risk and unmitigated greed at another's expense. The first thing to do is to redirect our focus on how to act to be heard, not whether to act. And that means effective tactics, and strategy, and the long-term implications of the enterprise need to be front and center.

Second, the pressures to let things slide or to circle the wagons and cover up will always exist; bystander indifference, professional rationalizations and groupthink are well documented phenomenon.

We need to teach and train our students and our employees that playing fair and following through on our professional responsibilities is business as usual. The kinds of occurrences that make the front page are not the exception -- they are the rule. Prepare to act. Consider the strategy and the friends you need to enlist to get the right people involved -- and be prepared to stay at it. One conversation will not be sufficient.

And third, to make that possible, it's just like getting to Carnegie Hall -- the key to using your voice well is Practice, Practice, Practice. Dr. Gentile points to research that proves individuals who take personal risks and demonstrate sufficient courage to make a real difference are following through on early opportunities to exercise their moral muscle.

Education, when the stakes are low, is a great time to practice. The Giving Voice to Values curriculum, piloted at the Aspen Institute Business and Society Program and Yale School of Management, is designed for this purpose.

Just imagine if the bystander in the locker room at Penn State and then Football Coach Joe Paterno had applied the same kind of energy and smarts to redressing the problem on their coaching staff as they did to assuring a winning season on the field and to preserving the football program's legacy. Or if the accountant at Arthur Anderson put the same brain-power into analyzing and uprooting the problems at Enron as he did to securing a piece of new business. Or if the engineers at BP applied the same persistence to balancing safety and profits, as they did to winning the contract or protecting the leasehold.

The possibilities are great. The skill sets already exist. It's time to get cracking.