Daniel Terris first became interested in Lockheed Martin when a colleague entered his office carrying a board game called “The Ethics Challenge,” which involved characters from the popular Dilbert comic strip inserted into various ethical scenarios specific to the defense giant. Terris, who is the director of the International Center for Ethics, Justice and Public Life at Brandeis University, investigated and learned that Lockheed had actually gone out and purchased the right to use the Dilbert characters as a way of making ethics more accessible to employees at the company, which had endured a number of ethics scandals in the 1970s and 1980s.

He spent two years researching Lockheed Martin materials and interviewing ethics officers, management and on-the-line employees for his case study, “Ethics at Work: Creating Virtue at an American Corporation,” which was published this year by University Press of New England. Compliance Week recently spoke to Terris about his impressions of Lockheed’s ethics program, and ethics in general in corporate America.

You seem to have been given some extraordinary access to the company and its officials.

They’re proud of what they’ve done and wanted to be able to explain their thinking about it. They consider this one of the hallmarks of the corporation. … I was honest from the beginning. I said I was very interested in what they were doing but was going to ask tough questions and give an honest assessment. To their credit, not everyone would be willing to do this. One of the company’s strengths is its transparency and willingness to be subject to scrutiny. … It’s not as though I had unfettered access to wander around the company, however. They monitored and shaped my experience.

What’s different about Lockheed’s ethics program?

Lockheed has been one of the innovators in thinking about how to get people interested [in ethics], how to get them talking. The company has made the transition from just delivering the message to getting employees engaged in thinking about the decision-making process.

[The Lockheed] program aims to be very broad in its reach. It tries to engage employees at every level. In that sense, it’s kind of a democratic process to make discussion of ethics and business conduct a lively part of the organization. Lockheed also gives its ethics officers a lot of latitude to examine and point out problems. It’s a program that has been successful in helping provide a unifying theme throughout the corporation.

You have some reservations about Lockheed’s effort though?

I think Lockheed’s attention to the specific issues that face senior management is not as strong. Senior management is very much behind [the program] and supports it. And that’s terrific. Senior management also participates in all the [education] modules. But the company hasn’t developed, in a strong and sustained way, programs that really focus on the specific ethical dilemmas and problems of those who have the most power in the corporation. That leaves the company somewhat vulnerable.

Why does Lockheed do this?

It’s partly that they don’t recognize this as a problem. I don’t think they differentiate between character issues [concerning] somebody in middle management from someone in senior management. I would argue that the temptations and the challenges for those who have more power are somewhat specific, and need a different kind of attention. They see it in a different way.

Any other criticisms of the Lockheed program?

Another vulnerability is that the company draws pretty strict boundaries around what comes under the [definition of] ethics. Members of the general public might say that other things are ethics too. They include certain kinds of company policies, the assessment of the company’s impact on the community it serves, executive compensation, and questions about the nature of the company’s mission and product, its relationship with the federal government and the kinds of impact its activities have. Most people would say that’s part of a company’s ethical posture.

Does Lockheed still use the Dilbert game?

They no longer use Dilbert. They still have a game-type activity that is the basic ethics awareness activity. I think it’s pretty good. It’s discussion-based, based on real cases. It’s something people can discuss at every level. I think this works pretty well but it contains some of the shortcomings of the [overall] program. The cases tend to be easier rather than harder, relatively mild examples. In some ways they suggest that ethics problems are problems of small decisions made by individuals. I would argue it misses an important component of ethics in a corporate environment—collective decisions made in pieces by groups of people. I don’t think the program addresses that aspect of decision-making as effectively.

Many companies can’t afford to buy the rights to use Dilbert, but can they learn from what Lockheed has done?

I think the heart of what [Lockheed is] doing doesn’t require an enormous investment. It’s an effort to get people in small groups talking, without necessarily insisting there is a single black and white answer to every problem. That’s the heart of what they’ve done well. There are other models for doing that. A lot of people have developed techniques for getting people together to talk, to be engaged and not to be preached at.

Is not being preached at one of the keys?

It is. People are naturally resistant to being preached at, being talked down to. They need to know the rules, but they also need to be trusted to think through how those rules ought to be applied. Ultimately, when it comes down to day-to-day decisions, people are on their own. They need to be empowered to think through decision-making and know when and how to ask for help.

Has Lockheed’s program been successful?

I can’t claim to have done a systematic analysis of an organization this big. It would take a much larger and sustained effort to evaluate the success of the program in a thorough way. I can say that Lockheed has avoided sensational scandals, while a lot of other places have fallen prey to them—including two at its biggest competitor. That’s kind of a mark of success. There are, however, plenty of examples of violations that various units have been penalized for. … My study is neutral on [the issue of the success of the program]. I will say that the dedication of the ethics and business conduct staff and the leadership of the corporation to this effort is a good sign and likely to have a good impact.

Based on your experiences researching and writing this book, what general thoughts were you left with about corporate ethics programs?

Some of the vulnerabilities at Lockheed are fairly widespread. The lack of dedicated attention to the problems of senior management—there have been many problems in the past several years [at other companies]. … A lot of corporations try to define the [ethics] field as narrowly as possible in order to be able to show that they’re making a strong and sustained effort. There’s a natural impulse to try to contain ethics in its mildest forms, keep larger and more threatening questions about the company’s business pushed to the side. That may be all right in the short term but eventually that can catch up to you.

Compliance Week regularly profiles corporate executives responsible for governance, compliance, ethics and risk. Click here for recent Q&As. If you would like to be considered for a future Q&A, or if you would like to nominate a public company executive for a Q&A, please email Matt Kelly.

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