Whistleblowing in the Wind: How to Transform Corporate Culture By Lauren Zander

Earlier this month, Bradley Birkenfeld was awarded $104 million by the IRS for becoming a whistleblower and turning in his employer, Swiss bank UBS AG, which helped its clients stash hundreds of millions of dollars owed to the government in taxes. Birkenfeld’s windfall has led to a slew of good samaritan imitators, prompting Jordan Thomas, chairman of Labaton Sucharow’s whistleblower representation practice, to gush: “It’s been a watershed moment for whistleblowing”.

It’s probably closer to the unvarnished truth to say that these are golden days for a certain kind of whistleblowing, the kind the IRS handsomely compensates. While Birkenfeld will spend 30 months incarcerated in a federal penitentiary in Pennsylvania for his own participation in his employer’s illicit activities, he will walk away, after taxes and legal fees are subtracted, with about $44 million dollars. That’s approximately $46,000 for every day he spends in jail. Pardon my cynicism, but I’m slow to celebrate the new whistleblowing trend as a historic victory for truth telling. If anything, it’s a familiar (and predictable) triumph of enlightened self-interest. If I pay my daughter to read a book, it’s not evidence of a resurgence in child literacy. If I pay my husband to mow the lawn, it’s not evidence of a rise in enthusiasm for landscaping. It’s evidence, as if we needed it, that people like to get paid.

What would actually produce a “watershed moment”, not only for whistleblowing, but for corporate truth telling in general? Wall Street has obviously struggled to engender the kind of environment that authentically encourages candor and transparency. Employees are often afraid to “snitch” on others for fear of professional retribution, or out of concern that their testimony will fall on deaf ears, or even out of a misguided sense of personal loyalty. On other side of the coin, whistleblowing can be promiscuously used as just another blunt careerist weapon, as an instrument to punish enemies or ingratiate oneself with the boss and get ahead. In neither case is a culture conducive to personal integrity produced.

The many attempts by corporate executives to fashion a working culture that promotes genuine truth telling have largely generated unspectacular results. Circulating an “ethics manual” that catalogues a corporation’s moral principles is just ridiculous, as if some HR produced catechism will magically produce an outpouring of honesty. Adults who cheat and steal generally know cheating and stealing are wrong and so find a recitation of common sense less than compelling. (It’s entirely possible the manual was written by the office’s most accomplished cheater and thief.) Ethics courses, once also in fashion, are similarly destined to fail, especially since they usually reduce to some HR person reading aloud an ethics manual. Unless the pain of boredom somehow births the virtue of honesty, we need a better solution.

The problem is essentially a cultural one, and so any remedy has to aim at a deep restructuring of the culture itself. What’s the point of a boss proudly advertising an “open door” policy if the culture as a whole has been contaminated with secrets, internecine fighting, and competitive backstabbing? Under those conditions, the open door becomes just another corrosive agent in a thoroughly dysfunctional environment overrun by personal acrimony and ulterior motive. An open door policy would only work in an office culture already characterized by truth telling, one where personal integrity had previously been established as the general rule. Otherwise, the door is only opened to a wave of unresolved personal drama, and the truth will only make the occasional cameo appearance. You will eventually want to close and bolt that door. You will pine for a back door to be installed, so you can avoid your employees altogether. Lost in despair from the deluge of faux “truth telling” you inspired, you will be reduced to contemplating an “open window” policy for yourself.

Close that window and pull yourself together-these are not irresolvable difficulties. Here’s the crux of the issue: the culture that spawned the problem in the first place is never going to fix it without outside assistance-there must be an independent party to effect such a profound and lasting transformation. A work space infested with duplicity and resentment, simmering animosity and long standing feuds isn’t properly equipped to heal its own wounds. Some outside party is necessary to come in and function as impartial coach: mediating disputes, disentangling and defusing personal rivalries, building an environment where truth telling is the norm, not some anomalous surprise that makes headline news.

What an office needs is AMNESTY! There has to be a reliable expectation of safety on the part of the truth teller, a comforting sense that whatever dark secret he reveals he will be immunized against retaliation. This isn’t just a solution that demands the right mechanisms for truth telling to be in place, as if a suggestion box just constructed right (some say powder blue is like truth serum), or artfully positioned in the office in the best truth telling corner (presumably in a supply closet that locks from the inside), will inspire honesty. The general policy of real amnesty for whistleblowers will only succeed in an environment that consistently scrutinizes and improves the complex dynamics of office relationships, that replaces the counterproductive drama of infighting with a hyper-productive spirit of collaboration. The old-fashioned honor system might work well among those who already valued honor in the workplace, and their fellow workers as colleagues and even friends. In an office overrun by sullen discontent, no system will work, however cleverly devised.

Even under the best of circumstances, when there is no self-interested motive to inspire whistleblowing, no one likes to be the bearer of bad news, a messenger of doom and gloom. It’s exhilarating to deliver good news, which is why people will clamor for the privilege (“We just had a healthy baby boy!”) but dread communicating bad news (“Those tests came back positive”). The corporate world is no different, just another stage for the expression of human nature, in all its heights and depths.

And so here’s some bad news: incentivizing your employees to tell the truth with cash windfalls will not create a more transparent working culture (but it will produce richer liars and corporate ladder climbers). And here’s some good news: with the guidance of the right set of experts, ones rigorously trained in the art of diagnosing and treating the social problems that plague any office, a consistently more open and honest work culture can be created and sustained. And for a lot less than $104 million.

Lauren Zander is the co-Founder and Chairman of The Handel Group®, an international corporate consulting and private coaching company.

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