Bob Lane, Chairman of John Deere
Tone at the top, a much discussed term, is vital and necessary, but it is not sufficient for an ethical culture. For that, a strong tone needs to be reinforced, up and down the corporation, with defined processes, procedures and examples. The ethical fiber of a company does not rest solely in words or codes of conduct, but in the actual behavior observed by suppliers, dealers, customers, and employees. At John Deere this is summed up in a highly visible, frequently referenced shorthand known as “the how.”
Observers need jolting evidence of the tone at the top, often a resolute willingness on management’s part to miss revenue or earnings targets — or even lose key talent — in order to do things the right way. Typically, in a high performance culture like John Deere, under these conditions no stone is left unturned in finding alternative ways to get the job done properly. Thus, in the end, rigorous performance targets are met squarely in the right way.
Ironically, the unmistakable linking of words and deeds in all aspects of the business is one of the best ways to assure that ethical tone is matched with actions. At John Deere, for example, people came to realize that management was talking seriously about dramatically improving asset turnover, not an ethical issue per se. Skeptics reasonably thought that when a sale was potentially at risk, Deere would abandon its tough talk and revert to the standard industry practice of shipping an overabundance of product, even without firm evidence of retail activity. In the end, Deere’s actions did match its words, and the business improved dramatically.
In the same way, ethical talk requires the muscle of deeds, such as changing a supplier or avoiding business opportunities in certain countries when business cannot be conducted in the right way. In these cases, words are backed up with documented practices, processes, and procedures, all understood around the globe.
In a widely published internal interview on only his second day on the job Sam Allen, the new President and CEO of John Deere, was asked, “What are you going to change?” His response, very succinctly and wisely, was, “It’s too soon to tell what we’re going to change. But what we’re not going to change is ‘the how’ and the way we do business.”
A strong tone also means that company leadership is regularly engaged with the compliance function. At John Deere, Sam Allen, as CEO, meets one-on-one, every quarter, with the chief compliance officer and the chief internal control officer. They also meet separately with members of the Deere board. As a director, I am also privileged to observe similar strong practices at General Electric and Verizon Communications.
At John Deere and other premier companies, high performing ethical leaders – increasingly from all parts of the world – continue to emerge, trained in proper global processes and practices. As they blossom, we can be optimistic that their words of integrity will be unequivocally backed by their actions.
