Although it’s not common for law enforcement organizations to benchmark themselves against high-performers in the private sector, it’s even less common for business to take cues from those who patrol the streets. But the success of the “broken windows” approach to reducing urban crime could provide some lessons for organizations struggling with persistent ethical failures.
The broken windows theory was first popularized in a highly influential 1982 Atlantic Monthly article written by Harvard political scientist James Q. Wilson and Rutgers criminologist George L. Kelling. Citing a range of academic studies, they argued that the routine vandalism that had become pervasive in cities with skyrocketing crime rates over the previous two decades should be viewed as not just as a consequence but also a cause of more serious felonies. In a nutshell, the authors showed how letting minor trespasses against order and civility, such as graffiti or vandalized windows, go unaddressed created the perception that disorder was the norm in those neighborhoods. Moreover, they made the case that vandals were not just kids blowing off steam but in many cases were also habitual criminals who committed serious crimes. The authors therefore proposed increasing arrests for petty offenses as a first step toward restoring a sense of order — and stopping potential felons as well. The theory was famously put into practice by William J. Bratton when he became New York City Police Commissioner in 1994 and instituted a zero tolerance approach to small offenses like public drunkenness and aggressive panhandling. Bratton also initiated a statistical system for modeling and predicting crime spikes –– the groundbreaking CompStat program — and advocated the continued deployment of the community policing practices initiated by his predecessor, Lee Brown. Beginning in the mid 1990s, felony crime in New York City began to plummet. According to the NYPD, robbery fell 50.9 percent and auto theft 93 percent between 1993 and 2014. The causes of the decline are many and disputed, and the broken windows theory has recently come under fire as contributing to unsustainably high rates of arrest and incarceration. Bratton, who was reappointed NYPD Commissioner in 2014 after a hiatus of 18 years strongly defends the strategy’s value in restoring safety in New York, while agreeing that alternatives to jail should be explored and police given far more discretion in sentencing.
What does all this have to do with corporate culture? After all, graffiti is hardly a scourge in the Fortune 500. When people in the corporate world have a problem with “broken Windows,” they call tech support. But in my view, the lessons learned from this shift in focus in law enforcement do have potential relevance for companies today. After all, broken windows was primarily a cultural program, aimed at changing attitudes about what the community would tolerate, what was OK.
Jon Katzenbach teaches that organizational cultures are defined and shaped by the routine behaviors of people who live in and sustain them. These habitual behaviors create cultural norms and influence mind-sets. Kaztenbach’s insight into this connection helps us recognize that pervasive ethical problems might usefully be addressed as a cultural issue.
The broken windows perspective suggests that the kind of lapses that have become familiar in our post-Enron world — bankers rigging a key interest rate, a mining company allegedly sacrificing safety for the sake of increased production — might be anticipated and prevented if organizations paid closer attention to the kind of minor yet problematic infractions that are tolerated in so many no-guts-no-glory cultures.
Of course, compensation incentives favoring high risk and big bets lie at the root of many of these problems, particularly in financial services, where a number of headline-grabbing scandals have erupted. But so does the perception that bothersome rules and even expectations of civilized behavior can be bent for superstars and big producers.
As the always insightful Andrew Hill recently noted in the Financial Times, the routine acceptance of organizational petty crimes — habitual lateness, the mild abuse of corporate credit cards, undercutting team members — can send a signal that more serious ethical transgressions will be tolerated. Such behaviors, along with routine rudeness, temper tantrums, disparagement, and harassment, are the corporate equivalent of the graffiti that until the early 1990s used to deface nearly every public surface in New York. When they become the norm, the larger culture is compromised.
Routine acceptance of organizational petty crimes can send a signal that more serious ethical transgressions will be tolerated.
Hill notes that, although the soft stuff of culture is the best barometer of potential scandals, organizations have for the most part tried to address ethical dilemmas by beefing up their compliance and risk functions. In effect, they are outsourcing the responsibility for ethics to those whose job is to ensure people follow the rules. As Hill observes, quantitative measures are not the best means of assuring cultural health.
Cultural health can’t necessarily be measured but it can be observed. And there can be consequences for the kind of rule-skirting behaviors that undermine the sense of order and trust. I’ve always been fascinated that executive coach Marshall Goldsmith imposes fines on his CEO-level clients when they indulge in behaviors that don’t serve them or those around them. Even failing to say “thank you” can elicit a $20 or $50 fine. In the course of a month (or even a day) these repeated fines quickly add up. Now, losing $20, or even $1,000, isn’t going to hurt any of Goldsmith’s clients in a material way. But over time these penalties can help curb the sense of entitlement that immoderately successful individuals can too easily fall prey to. At a minimum, being fined alerts these leaders that they need to be aware of their own behavior, and sends a message that small offenses against human decency are not acceptable.
Of course, none of us wants to work for a company that docks our pay because we’re in a bad mood or claim credit for what we know perfectly well was really a team effort. Goldsmith’s clients sign up to have him scrutinize their behaviors; most of us don’t want such oversight to be part of our employment contracts. To get a handle on what learning from broken windows might look like, let’s go back to Jon Katzenbach’s thoughts about how routine behaviors shape organizational cultures. In addition to identifying how behavioral norms are established, Katzenbach notes the cultural importance of “critical informal leaders” — those individuals who motivate others not only by what they do but by how they do it.
These individuals, whose influence often exceeds their position, are the heart and soul of every organization, the go-to people, the culture bearers. Healthy companies seeking to maintain ethical cultures make sure these informal leaders are recognized for the key role they play in building the larger culture. Organizations that get off-track — Enron can serve as the textbook study — tend to undercut these leaders at the expense of “the smartest guys in the room,” whose high risk maneuvers generate outsized rewards.
Sherron Watkins, who blew the whistle at Enron, wrote in her book, Power Failure, about how people at the company had grown used to being sidelined and disrespected. Feeling marginalized, they failed to push back against the obvious signs that the company was going astray.
By contrast, informal leaders can serve as built-in detectors for minor transgressions that undermine the culture and subtly pressure outliers to get back in line. That’s the essence of the broken windows theory: It teaches us to pay attention to small signals of cultural decay.