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Ethics Program Implementation
Please address the following questions:
On page 83, Terris discusses the company’s ethics code. Why is the code considered important to the company’s ethics program?
Discuss the importance of ethics training and employee involvement. What are some of the things Lockheed does to make the training process interesting and worthwhile?
How does Lockheed measure success with respect to ethics in the workplace?
What are some of the things Lockheed does at the operational level to make its ethics program work?
Write a 3- to 4-page paper, not including title page or references page addressing the issue and upload it by the end of this module.
Ethics at Work
Terris, Daniel
Published by Brandeis University Press
Terris, Daniel.
Ethics at Work: Creating Virtue at an American Corporation.
Brandeis University Press, 2013.
Project MUSE. muse.jhu.edu/book/23072. https://muse.jhu.edu/.
For additional information about this book
[ Access provided at 8 Nov 2022 01:57 GMT from Trident University International ]
https://muse.jhu.edu/book/23072
https://muse.jhu.edu
https://muse.jhu.edu/book/23072
chapter three
Peeling Back the Onion
C men and women crowd the Palm Room at the
Grand Hyatt Hotel in Orlando, Florida, for the start of the annual
Ethics Officer Conference for the Lockheed Martin Corporation. Clean-
cut, casual, welcoming to a new face, ranging in age from their mid-
thirties to their early sixties, they are at their ease. The Orlando Hyatt is
a big step up from the venue of last year’s conference—a colorless facil-
ity within easy reach of corporate headquarters in Bethesda—so the
mood is upbeat, even if the schedule does not promise much in the way
of outings to theme parks. Dress is “business casual.” Most of the ethics
officers are Caucasian, but there are a respectable number of non-White
faces, mostly African Americans, as well.
Some in the crowd are reconnecting with old friends and colleagues,
and others are new to the Lockheed ethics world, so the conference be-
gins with an icebreaker: Say something about yourself that no one else
knows. After an undertone of ritual complaint about the exercise, they
go with the program and settle around their tables to talk, and after fif-
teen minutes or so report out to the group. Gail at Table once worked
on venereal disease issues for the county health services. Rick at Table ,
who works at the Nevada nuclear test site, has birds on his life list;
friends know him as the “bird nerd.” Rose at Table is revealed to have
a “criminal past”: She hooked school in third grade. Someone at Table
admits that he used to cheat at Scrabble. Mock gasps follow each con-
fession. At Table , one officer shows the Scrabble cheater that his actions
were in violation of page of the Lockheed Martin Code of Ethics and
Business Conduct: “to be honest and forthright with one another.”
As the icebreaker winds down, Nancy Higgins takes the podium. The
chuckling tones down. In , Ms. Higgins is the vice-president for
ethics and business conduct, Lockheed Martin’s top ethics officer, and
the executive in charge of their whole operation. A woman in her forties,
platinum blonde, she sports a broad, toothy smile that seems frozen on
her face, even while she is speaking. She calls herself a “recovering
lawyer,” having moved over from the general counsel’s office into the
ethics operation at Boeing, before assuming Lockheed Martin’s top
ethics job in . She speaks slowly, clearly, a bit pedantically, as she
moves briskly through a “state of the ethics operation” talk, fortified by
Power Point slides sporting Lockheed’s flying star logo.
Higgins’s speech is a pep talk, reinforcing to her team the value of
their work to the corporation. Ethics is a frustrating business, she readily
concedes, since people tend really to notice us when things go wrong.
But she is happy to cite chapter and verse of the division’s accomplish-
ments. The ethics awareness program that really took off with Dilbert in
has gone through several reconceptions since then. Calls to ethics
officers are up—a sign of confidence in the organization—and more
calls than ever are being resolved on the local level, without any formal
action being necessary. Lockheed Martin employees as a whole have
given feedback that they think that the ethics program is worthwhile,
and senior management continues to trumpet ethics as the corpora-
tion’s “number one value.”
There are challenges, to be sure. Surveys show that too many Lock-
heed Martin employees still believe that they live under a threat of retal-
iation if they come forward about ethics violations. It turns out that new
employees—those who have been at the corporation for six months or
less—are particularly vulnerable to ethics violations, since they have not
yet fully embraced the company culture. Managers are sometimes turn-
ing a deaf ear to ethics concerns raised by those who report to them;
sometimes, apparently, managers do not even recognize an ethics issue
right under their noses. These challenges, however, are simply next year’s
work, as the ethics division strives for continuous improvement.
Most importantly, ethics is not simply an activity to fulfill a legal re-
quirement; it is a “value-added” component of the company’s mission.
Part of Higgins’s rhetoric is defensive: Like other divisions that are not
“profit centers,” the ethics and business conduct division constantly has
to prove its worth in a bottom-line business. So Higgins cites the confi-
dence that “the Customer” (the U.S. government) has acquired in Lock-
heed Martin’s integrity as a key to winning new contracts, and she makes
broad claims about the savings realized thanks to the prevention of
Peeling Back the Onion :
waste and fraud. Yet the real value added is larger and grander than new
contracts and dollars saved. It is an almost metaphysical infusion of
goodness into the company’s products: the fighter jets, the space shuttle,
the missile and control systems, the hardware and the software. Ethics,
in Higgins’s vision, expands and extends Lockheed Martin’s “mission
success.”
The Designers
Lockheed Martin’s division of ethics and business conduct is based at
the company’s headquarters in Bethesda, Maryland. The building, a gray
concrete box surrounded by manicured lawns and artificial ponds, gives
the feeling of a secluded enclave, rather than a complex in the heart of a
suburban office park. The five-story structure itself, with its wide hall-
ways and large windows, has the feeling of an oversized child’s play set,
with big pieces made for stubby fingers: easy to snap together, easy to
take apart, and easy to fashion a new arrangement of the parts that
looks, in the end, just like the last construction.
Maryanne Lavan, Lockheed Martin’s vice-president of ethics and
business conduct as of , oversees an operation that is both highly
centralized and conspicuously far-flung. Four senior members of the di-
vision work along the second floor hallway in corporate headquarters.
Here, the company’s ethics policies and programs are designed and
refined, and then disseminated to the hundreds of sites that Lockheed
Martin maintains in the United States and around the world. Here is
where the company-wide ethics “help line” rings. Here is where consult-
ant Steve Cohen comes each winter to help the corporate ethics staff de-
velop next year’s “awareness” program.
Beyond Bethesda lie the five “business areas” that make up the corpo-
ration. Each business area has an ethics “director,” who jointly reports to
the vice president of ethics and business conduct back at corporate
headquarters, but who also reports to the business area president. These
directors are the primary executives for ethics within their business
areas, and they also serve as a kind of cabinet for the vice-president, tak-
ing turns with leadership on companywide initiatives. In turn, each
business area director supervises a group of ethics officers, who are
strategically spread out across the corporation’s facilities. There are ap-
: Ethics at Work
proximately sixty-five ethics officers across the Lockheed Martin world.
Many are full-time; some work in related areas like audit or human re-
sources, and the ethics job is only part of their portfolio. An ethics
officer’s area of responsibility may be a single large facility, or it could in-
clude dozens of small facilities scattered over thousands of miles. Seeing
so many ethics officers together at the Orlando Grant Hyatt makes them
look like a small army of virtue, but the math works out to just one
officer for every , Lockheed Martin employees.1
Maryanne Lavan and other Lockheed Martin officials will not specify
the precise budget for the Lockheed Martin ethics and business conduct
program. She will say only that the figure is in “the millions,” especially
if the calculation includes the labor costs of the time spent by thousands
of corporation personnel who participate in regular ethics trainings. At
the Boeing Corporation, whose workforce is approximately % larger
than Lockheed Martin’s, the annual budget for the ethics and business
conduct division was $. million in , although Boeing significantly
overspent the budget that year in the wake of large-scale ethics scandals.2
In practice, then, Lockheed Martin ethics officers work in isolation
from one another, immersed in the particular problems of local facili-
ties, working at the behest of company executives who share supervision
of the officers with the business area directors. They are men and women
who have come through the Lockheed Martin ranks, who have found
their way into ethics work through the door of human resources or au-
diting or perhaps engineering. It is a thin, scattered band, so the burden
of spreading consistency through the operation falls on the team at cor-
porate headquarters in Bethesda.
The man primarily responsible for creating the day-to-day aspects of
Lockheed Martin’s ethics awareness program is Brian Sears, an ethics
veteran whose zeal and experience typify the operation. Well over six
feet tall, with broad shoulders and a vigorous gait, Sears towers over
most of his colleagues at the ethics officers’ conference and along the
corridors in Bethesda. His low-key manner does little to disguise an ac-
tive, self-deprecating sense of humor. When I visited him in November
, he was busy mock complaining to anyone who would listen that
Michael Sears, the chief financial officer at Boeing who had just been
Peeling Back the Onion :
fired for ethics improprieties, was “besmirching my good name.” His
office on the second floor of corporate headquarters shows the habits of
a brainstormer: piles of papers on the desk, boxes of ethics surveys clut-
tering the floors, and a whiteboard crisscrossed with diagrams and slo-
gans for the next ethics awareness project.
Growing up in modest circumstances in the San Joaquin Valley of Cal-
ifornia, young Brian Sears harbored an ambition to become a writer. He
won his first writing contest in sixth grade, edited his high school news-
paper, and wrote for the UCLA Daily Bruin in college. But he recognized
early on that making a living by the pen was uncertain at best. Besides,
he was charmed by the romance of flight, and he dreamed of becoming
a pilot. He won a Reserve Officers Training Corps (ROTC) scholarship
at UCLA in the late s, and he began studying to become a flight navi-
gator. Even in college, however, his big frame was still growing, and after
two years of training, his commanding officer delivered the bad news:
Sears had grown too much. At six feet six inches, he was too tall for the
fighter jets.“If you’re over the height limit,” he recalls,“when you have to
eject from the plane, you lose your kneecaps.” He received an honorable
medical discharge (“I still have the certificate to prove it”), and he had at
least the satisfaction of receiving two free years of education.
Sears had been studying economics at UCLA, but once a career in
flight was no longer an option, he wanted something more practical, so
he switched to California Polytechnic University in San Luis Obispo to
study accounting. It was there that he discovered a new passion: the im-
probable romance of auditing. The transfer of allegiance from piloting
to running numbers might seem unlikely, but the underlying motiva-
tion was the same: the allure of travel. His Cal Poly auditing professor
spent a great deal of class time describing his overseas consulting as-
signments for multinational corporations. Brian Sears wanted to see the
world; if he could not fly the planes himself, at least he would ride them
at someone else’s expense.
He took his first job with the Burroughs Corporation in , and he
spent more than percent of his time on the road over the next two
and a half years. He found that that he loved the travel, but also the num-
bers. There was something satisfying about their clarity and their preci-
sion, and he loved straightening out the inconsistencies in the corpora-
: Ethics at Work
tion’s books. His professor had called auditing “the art of aggressive
diplomacy,” which appealed to him.
By , Sears had taken a job in the corporate audit department at
Lockheed Corporation. It meant less day-to-day travel, but also being at
the service of a national operation. Over the next fifteen years, he moved
from Burbank, California, to Austin, Texas, back to Burbank, to Titusville,
Florida, and then to the old General Dynamics plant in Fort Worth,
Texas. Along the way, he was promoted to audit supervisor, and eventu-
ally to a regional manager position in corporate audit.
In , Carol Marshall, then in charge of the Lockheed Martin ethics
program, asked him to give a talk to her senior staff on how the internal
audit department would measure the efficacy of a compliance training
program. Sears had no idea how to grapple with this. He was used to the
reliable world of spreadsheets; there were no guideposts about how to
evaluate the success and integrity of programs intended to coach em-
ployees in complying with federal laws and regulations.“But I gave it my
best shot,” Sears recalls. “I told a few jokes and improvised.” Several
months later, he was offered the chance to move from auditing into the
ethics operation as a “sector director” for Lockheed’s energy business.
Was it strange to make the shift from audit to ethics? Sears insists that
the transition was simple and smooth. Auditors, he says, are concerned
with doing the right thing. The mind set of checking the facts carefully
and weighing all the relevant factors, the familiarity with the basic pro-
cedures of investigation, the management experience he had gained as
he had climbed through the ranks—these were habits and experiences
that served him well as he moved into the ethics operation. The main
difference was a wider scope of problems to look into, and, more im-
portantly, the opportunity to be part of a more service-oriented sector
of the corporation. “It was just putting on a different hat,” he says. “One
where I could help people.”
In October , Sears and his family moved once again, this time to
rural Maryland, giving him a long but manageable commute to the
Bethesda headquarters. Starting in the energy area, he moved over to
aeronautics, and then became the chief ethics officer for the corporate
division itself, meaning that ethics issues involving the corporation’s
headquarters staff fell within his domain. In , his title changed to
Peeling Back the Onion :
director of ethics awareness for Lockheed Martin as a whole, although
he also retains his corporate ethics officer duties. He is now the princi-
pal developer of several of the corporation’s new initiatives in the ethics
area, including oversight of the annual training program.
Like everyone else in the Lockheed Martin operation, Sears has no for-
mal training in ethics, nor does such training strike him as necessary or
productive.“It’s mostly about developing a set of core values, and living by
them,” he says, and that seems to suffice for him as a definition of ethics.
He spends a lot of time trying to communicate the message that ethics is
not just about distinguishing between right and wrong, but that it’s about
“the gray area of conflicting values, the difference between right and
right.” He concedes that “we might not have a nice, clean answer to every
question.” Sears is not inclined to sweat over ethics in the abstract. He be-
lieves that a definition of ethics can and should percolate from the bottom
up.“Everyone has their own perspective on ethics,” he says.“Who am I to
tell an employee what is or what isn’t an ethics issue?” He is eager to move
from beliefs and convictions to the much more practical discussion of the
range of the company’s programs and the “robust”quality of its offerings.
Sears is particularly preoccupied—he says “obsessed”—with the con-
nection between the ethics operation and the corporation’s competitive
advantage. Mulling over the corporation’s ethics awareness pro-
gram, he came up with the idea of an “ethics meter” that would graphi-
cally demonstrate the connections between virtuous behavior and tan-
gible benefits for the individual employee and the corporation. A rough
diagram on the whiteboard in his office displays a timeline of a fictional
employee’s career, showing how at critical turning points good ethics
leads the way to promotions for the employee, more business for his di-
vision, and a better crop of potential employees who are, in theory, at-
tracted to Lockheed Martin’s reputation for integrity. Sears is also
painfully aware of the fragility of an ethics operation, of how quickly
confidence in its effectiveness can erode.“Any one person or small group
of people can shut us down,” he muses. “All of our efforts can’t preclude
the rogue elephant out there.”
Brian Sears’s sensibility both reflects and affects the tone of the divi-
sion: practical, easygoing, nondogmatic, inclined to think of ethics as
much as a service operation as a watchdog. Ethics, in the world of Brian
: Ethics at Work
Sears, should be clear, simple, and measurable.Yes, employees face tough
dilemmas, but the corporation’s support structure should be more than
adequate to work through them. Even more, ethics should provide a
sense of meaning and mission for a Lockheed Martin employee’s work.
It should be, at best, a driver, a purpose. Sears is unapologetic about this
sense of mission. “We want employees to think: At the end of the career,
what is your ethics legacy?” While he is nowhere near retirement, Sears
takes pride that his work in the ethics department has already “built
value” into the Lockheed Martin empire.
The Code
Brian Sears, and every other ethics officer at Lockheed Martin, bases his
work on a foundational document: Setting the Standard: The Lockheed
Martin Code of Ethics and Business Conduct. First printed immediately
following the merger in , the code, updated every year or two, exists
in the form of a spiral-bound, pocket-sized booklet, intended for handy
reference. Its fifty-four pages are laid out more like a little marketing
brochure than a dry legal document, complete with full-page color pho-
tos of Lockheed Martin people and products. On page is the “receipt
and acknowledgment” form; with each new edition, every Lockheed
Martin employee agrees that “I understand that each Lockheed Martin
employee, member of the Board of Directors, agent, consultant or con-
tract worker is responsible for knowing and adhering to the principles
and standards of the Code.”In addition to English, the booklet is available
in Arabic, Chinese (Mandarin and Traditional), French, German, Greek,
Hebrew, Hungarian, Japanese, Korean, Portuguese, Russian, Spanish,
and Turkish.
Public and widely disseminated codes of ethics like Setting the Stan-
dard are a commonplace now in corporate America. For one thing,
they are a basic requirement under the federal sentencing guidelines,
Sarbanes–Oxley, and other legislation aimed at promoting corporate
accountability and responsibility. A written code is a starting point, the
bare minimum for establishing standards. Companies—even small
ones—that neglect to write and distribute a code do so at their peril,
since the existence of the written document is the first (although mini-
Peeling Back the Onion :
mal) line of defense against lawsuits or criminal investigations that hold
top management accountable for illegal or unethical activity.
With increasing scrutiny, the mere existence of a code of business
conduct is no longer sufficient; the content and, indeed, the style of such
codes have come to matter a great deal. Companies may be tempted to
develop a long, dry, excruciatingly detailed list of rules, regulations, and
“don’ts,” thinking that exhaustiveness can immunize them against every
conceivable form of wrongdoing. But observers now pay attention not
only to the content of the code, but also to its perceived accessibility. If a
document is not readily available and easily read by the average worker,
outsiders can charge that it is not an effective means of communicating
the ethical bottom line. At the other end of the spectrum, a company
that simply lists a few basic values is vulnerable to the charge that its
code is no more than vague and empty rhetoric.
Setting the Standard aims to fall between these two poles. Its most
striking and insistent feature is that it places responsibility for ethical be-
havior and for the ethical “performance” of the corporation on each and
every individual employee at Lockheed Martin. It begins with a letter
from the Chief Executive Officer and the Chief Operating Officer of the
corporation, addressed “Dear Colleague,” to suggest from the very first
line a kind of parity between leadership, management, and line em-
ployees. What matters is “the personal integrity of each of our employees
and their commitment to the highest standards of personal and profes-
sional conduct.” The development of an “ethical culture” at Lockheed
Martin is based on individual integrity, although in a context “that values
teamwork, sets team goals, assumes collective responsibility for actions,
embraces diversity, and shares leadership.” The letter is intended both to
send a message of top-down leadership on the development of this “eth-
ical culture,” and to suggest that such a culture is in some sense demo-
cratic, built from the bottom of the company up.
The letter spells out the six “principles” through which Lockheed
Martin’s expects to “set the standard” for ethical behavior:
Honesty: to be truthful in all our endeavors; to be honest and
forthright with one another and with our customers, commu-
nities, suppliers, and shareholders.
: Ethics at Work
Integrity: to say what we mean, to deliver what we promise, to ful-
fill our commitments, and to stand for what is right.
Respect: to treat one another with dignity and fairness, appreciat-
ing the diversity of our work force and the uniqueness of each
employee.
Trust: to build confidence through teamwork and open, candid
communication.
Responsibility: to take responsibility for our actions, and to speak
up—without fear of retribution—and report concerns in the
workplace, including violations of laws, regulations, and com-
pany policies, and seek clarification and guidance whenever
there is doubt.
Citizenship: to obey all the laws of the United States and other
countries in which we do business, and to do our part to make
the communities in which we live and work better.
The set of principles is carefully chosen to develop a certain style on
which ethics is built, a style that places its signal emphasis on a concept
of open communication. Ethics, in the Lockheed Martin conception,
develops through the free flow of information—“honesty and forth-
rightness,”“saying what we mean,”“candid communication,” and a will-
ingness to “ speak up” are the networks through which ethics is sup-
posed to flow. The underlying assumption is that the temptation to bend
the rules flourishes in isolation, in dark corners and in secrecy, and that
frequent and unguarded communication is the best protection against
misdeeds. The theory may be sound, but it also poses a particular chal-
lenge and strikes an odd chord in a corporate environment where na-
tional security concerns and the possibility of corporate espionage make
secrecy a paramount necessity.
The bulk of the code, following the opening letter and articulation of
the principles, outlines the key topics of concern in maintaining ethics
in the Lockheed Martin workplace. The obligation to “ -
” covers “cultural diversity” and the insis-
tence that “we will not tolerate harassment or discrimination of any
kind.” (Since , the list of types of discrimination that Lockheed
Martin will not tolerate has included sexual orientation and “family
structure,” in addition to the more established categories. This change,
Peeling Back the Onion :
in a conservative company environment, was instituted in response to
shareholder pressure at the company’s annual meeting.) “ -
,” “ -
,” and “ ” make clear that “no one should
rationalize or even consider misrepresenting facts or falsifying records.”
“ ” provides precise
detail about federal law and corporate custom on business courtesies.
With federal employees, Lockheed Martin representatives can give coffee
mugs or calendars, coffee and donuts, or a meal for less than $; cour-
tesies to nongovernment employees simply must be “consistent with
marketplace practices, infrequent in nature, and may not be lavish or ex-
travagant,” and no employee may give or receive a gift worth more than
$. “ ”
focuses less on ethical issues, but calls employees’ attention to the U.S.
laws that have been enacted in the years since Lockheed was enmeshed
in the overseas bribery scandals. Other sections of the code address po-
litical contributions (“ ”),
conflicts of interest (“ ”), employment of former govern-
ment officials (“ ”), company assets like computers
and equipment (“ ”), and speculative and insider trading
(“ ”).
At the back of the booklet are a list of “ ” and a
. A Lockheed Martin employee learns there that “’
. . .” such phrases as “Well, maybe just this
once,” or, “It doesn’t matter how it gets done as long as it gets done,” or,
perhaps a bit more obviously,“We didn’t have this conversation.” Taking
the “quiz,” employees are instructed, “ , -
. . .” questions like “How will it look in the newspaper?” and “Will I
sleep soundly tonight?” But in case the message has seemed too soft, a
section on warns that “Violations of the Code are
cause for corrective action, which may result in disciplinary action up to
and including dismissal.” The booklet urges employees to ask and keep
asking questions, and provides a list of company resources, including
not only the ethics office and the general counsel but also a direct and
ostensibly anonymous line of communication to the audit and ethics
committee of Lockheed Martin’s board of directors.3
Personal responsibility and a well-developed conscience are the hall-
: Ethics at Work
marks of the “standard” that Lockheed Martin aspires to set. The docu-
ment places a high level of responsibility on the individual employee—
both for knowing the guidelines and for acting on them. In one sense,
this is inevitable, as any corporate entity ultimately depends on the ac-
tions and integrity of each flesh-and-blood human being who works for
it. Yet in another sense, the emphasis on personal responsibility is mis-
leading, especially in an environment where teamwork, the rapid flow of
information, and the powerful pressure of deadlines mean that many
key decisions are by their nature collective and improvised, rather than
individual and carefully deliberated. Setting the Standard implicitly de-
scribes the ethics of a corporation as the sum total of millions of deci-
sions made by individual actors. This approach brings to light one truth
about human enterprise, and it promotes a healthy sense of personal in-
vestment in the corporation’s character. But the approach evades an-
other truth about the nature of corporate life: Corporations make deci-
sions in different ways from individuals, in a world where the rules are
constantly changing. In the absence of a more rigorous process of self-
examination, it is perfectly possible for an individual to “sleep soundly”
and still participate in collective actions that violate the principles of
ethics and fair play.
The Hour of Truth
Setting the Standard is the gospel for Lockheed Martin’s ethics program;
the annual ethics awareness training program, developed and overseen
by Brian Sears, is the most far-reaching regular ethics activity of the cor-
poration. Its goal is to use a single, flexible instrument so that all ,
employees of Lockheed Martin in the United States and around the
world spend at least one hour per year discussing ethics in their work-
place. The annual awareness program is the best and most comprehen-
sive example of the way in which Lockheed Martin approaches ethics. It
shows the corporate effort at its most inventive and creative, and it also
demonstrates the quite deliberate limits of that effort.
The idea of an annual “ethics hour” is easy to caricature. What is so
paltry a commitment of time, in the context of , or more hours a
year devoted to improving the bottom line? It is obvious that sixty min-
utes of any activity carved out of an entire year is barely enough to raise
Peeling Back the Onion :
a series of important issues, much less to discuss them in depth, and still
less to instill the deep commitment necessary to implant right-minded
thinking and behavior. In all fairness, however, Lockheed Martin offi-
cials describe the ethics awareness program as only the beginning of
their effort, as a single common denominator on which a variety of
other programs are based. There are plenty of institutions in American
life that require no discussion whatsoever of ethics as a routine part of
their employees’ work. (I do not know of any university, for example,
that requires every member of its community to engage in this kind of
discussion.) An hour a year is a step that many of us have never taken.4
Furthermore, the challenge of developing a tool that works for people
at every level of the corporation, of every type of job and temperament,
and in every corner of the country and the world is no small one. Be-
ginning with the development of the Dilbert-based “Ethics Challenge” in
, Lockheed Martin adopted the idea that it was not enough simply
to expose employees to ethics awareness, but that it really mattered that
they responded to it, even that they liked it. The program’s success is
measured not only by its effectiveness in reaching employees, but also by
how positively they respond to it.
In the years since , the ethics awareness program has developed a
rhythm and a routine of its own, and it has developed and matured the-
matically since its first iteration. The program is redesigned each year
with new cases, and every two years or so Sears and his team develop a
new format, to keep it fresh and allow employees to explore new ap-
proaches. Steve Cohen, who found his way into the ethics world by own-
ing the rights to Dilbert, has taken advantage of serendipity to become
an all-seasons corporate ethics consultant as the principal of a new busi-
ness, now called Ethics, Inc. He has remained a key player not only in the
annual awareness training but also in a host of Lockheed Martin ethics
and compliance programs.
Each winter, Sears, Cohen, and members of their respective teams
gather in a series of meetings to map out the themes and process for the
next year’s training. Sears and the Lockheed ethics team identify the key
topics they would like to emphasize, and they generate a list of new
“cases” culled from the company records. Cohen and his team provide
the pizzazz: educational strategies, a new format, some new graphics, a
: Ethics at Work
clever video, and an internal marketing campaign. By March, the mate-
rials are fully in production.
As with the original “Ethics Challenge,” rollout begins with great fan-
fare in late April or early May, in the suite of the chief executive officer
(CEO). The chief executive himself presides over the first formal session
of the program, participating along with the top executives of the com-
pany. Each executive in turn leads the program with his or her senior
staff, so between May and August the program “cascades” down through
the corporation, with employees meeting in groups ranging from four
to twenty-four, in conference rooms and offices in all of Lockheed Mar-
tin’s facilities. Each employee duly signs the attendance sheet, completes
the training, and most fill out an anonymous survey giving feedback to
the designers. By the end of the summer, the bulk of the corporation has
been through the training. Makeup sessions are held for those who
missed out the first time around, and the ethics officers commence the
hunt for the stragglers whom they call “onesies” and “twosies,” especially
Lockheed Martin employees who work off site or as consultants within
other corporate settings. The training is intended for groups, but flexi-
ble enough for people to use it with a single partner, or even in a “soli-
taire” format.
The format has changed since , but the basic principle of group
discussion of real-life cases has remained intact. Dilbert and the “Ethics
Challenge” lasted two years, until it was obvious that changing the color
of the box would no longer make the concept seem fresh and new. The
next format was called “Trust Building,” followed by the “Ethics Daily,”
with a mock newspaper (yes, with a Dilbert strip) and a video featuring
a well-known actor. When Lockheed Martin employees gathered in the
spring and summer of , they opened up a white box with stylized
faces in bright colors adorning its cover. The Lockheed Martin
Ethics Challenge was called “Perspectives.”
With “Perspectives,” the annual awareness training added a new twist:
the idea that different individuals might have different points of view on
a key decision. At the beginning of the training session, the leader di-
vided the work group into three teams, generally with three to six em-
Peeling Back the Onion :
ployees on each team. After the introductory video with the pep talk from
(now retired) CEO Vance Coffman and chief operating officer (COO)
and now CEO Bob Stevens, the leader distributed a set of booklets to
each team. As in previous years, the booklets contained a series of sim-
plified real-life Lockheed Martin ethics situations, but this time each
team’s booklet presented the case from the “perspective” of one of the
fictional characters in the case.
Case , for example, presents a situation where, after years of nego-
tiating a tax dispute, Lockheed Martin receives a tax settlement from the
Internal Revenue Service for $ million. An account named Peter in
Lockheed’s tax office does his own calculation on the interest owed the
corporation, and, lo and behold, he discovers that the IRS overpaid the
company by $ million. Peter tells his boss, Akeem, who notifies Todd,
the corporation’s point of contact at the IRS. Todd insists that the IRS
calculation was correct, that there was no error, that Lockheed Martin
does not have to return any money. What now is the right thing for
Akeem to do?
Armed with their booklets, the teams meet in separate corners of the
room to ponder the case. All three booklets have a general description of
the situation, but Team A’s booklet includes a more detailed version of
Peter’s side of the story.“I used to work for the IRS before I came to Lock-
heed Martin,” Peter says, “so I’m fairly confident that my calculation is
correct. . . . I just have to shake my head and wonder what’s going on.
We want to pay back $ million, but the IRS doesn’t want it?”
Team B looks at the situation from Todd’s point of view.“With all due
respect to Peter,” says Todd, “I’ve been doing my job for fifteen years and
I know how to calculate interest. . . . Even if I’m wrong, and I’m sure I’m
not, the company still makes out. What’s the big deal?”
The third team’s booklet is marked “D” for decision maker, for the
burden of addressing the situation falls upon the beleaguered Akeem,
who is the tax department manager. Todd was “a little defensive,” Akeem
reflects, “and [he] reminded me of his years with the agency. Okay, I
respect that, but I also reviewed the details with Peter, and I believe we
were overpaid by $ million.” Still, he has called the mistake to the at-
tention of the IRS, and he has been rebuffed. Hasn’t he already fulfilled
his ethical obligation?
: Ethics at Work
Teams discuss their cases for six or seven minutes, answering ques-
tions on a worksheet marked “Get in Character!” Employees are told in
boldface to “Answer the questions from your character’s perspective,
not your own.” The groups tackle three questions: “Who are you and
what do you care about or want?”“Which ethics principles are most rel-
evant to this situation and why?”“What to you think the Decision Maker
should do, and why?
These worksheets now serve as the “script” for one bold volunteer
from each team, who must stand in front of the group and role play the
character. The quality and intensity of these performances varies con-
siderably. Some natural hams enjoy the chance to give their parts extra
rhetorical flourishes. Some have a hard time stepping into the part of a
character that they find exceptionally thick headed (“Who in their right
mind would ever offer to give money back to the IRS?”). But most
stumble through the part in an awkward third-person, too shy to play
the role fully, too used to following instructions to abandon the format
altogether. Still staying in character, team members are allowed to ask
one another questions for a minute or two. “After a team presents,” says
the Leader’s Guide, “encourage them with a simple acknowledgment
such as ‘Good job.’”
The idea is to help employees to envision ethics situations as dilem-
mas where two or more people might have conflicting interpretations.
“Our interests influence our perspective,” says the Leader’s Guide, “and
our perspective influences our opinion about what is right. That’s why
individuals may reach different conclusions even when they have con-
sidered the same factors. When confronted with a difficult decision, it’s
important to consider the perspectives of all involved. Your own per-
spective may change.” Without saying so explicitly, the format cleverly
opens up possibilities for conversation about the obstacles to “doing the
right thing” in a competitive environment where ethics may be the num-
ber one “value” but profits are the number one measure of performance.
Tax Refund’s “Peter” cannot be sure that anyone—least of all his boss—
will thank him for uncovering an error that may “cost” the corporation
$ million. For that matter, savvy discussants will point out that Todd’s
job at the IRS may be in jeopardy if he concedes that he has made an
error of this magnitude. Akeem, as decision maker, may consult the
Peeling Back the Onion :
“ethics principles,” but he may also calculate how Peter and Todd’s
knowledge of the situation will affect him, should the facts become
known at a later date.
Having batted things around from their own perspectives, the teams
are finally permitted to step out of character and talk through the decision,
based on the corporation’s ethics principles. Here, however, the open-
endedness of the format comes to an end. The group may come to one
conclusion—or more than one—but the Leader’s Guide finally shows
the corporation’s hand in the form of an “epilogue” in the words of the
decision maker. Unsurprisingly, Akeem’s decision in “Tax Refund” is to
work around Todd and to call the problem to the attention of others at
the IRS until the agency can see the mistake and take back the money.
“The IRS was highly appreciative,” Akeem reports, “and commended us
on our honesty.” In case the point was not clear enough, Akeem goes on
to say that the next time the IRS overbilled the corporation, getting that
problem fixed was a snap. This case was particularly satisfying, because
it involved five of the corporation’s six ethics principles—honesty, in-
tegrity, trust, responsibility, and citizenship—all at once.
The “Perspectives” cases follow this format, presenting characters
who are earnest, dedicated Lockheed Martin employees, opening up
some difficult and possibly even subversive questions, but then using the
epilogues to tidy matters up and provide groups with a clear, company-
approved line of reasoning.
Cases treat serious issues head-on, but in their mildest possible form.
Case is the only case to address the issue of “harassment.” There’s
no physical action or direct pressure from a boss in Case ; the issue, in-
stead, involves a middle manager named Sam, a year from retirement,
who tells Vanessa, a security guard in the lobby of his building, how sexy
she looks in her uniform. “I know you’re supposed to be politically cor-
rect these days, but what do you want from me?” Sam asks in his “per-
spective.” “I’ve got three grandchildren—you think I’m some kind of
harasser? Is she going to make a federal case out of this and screw up
my last year?” Sam’s joking is witnessed by a receptionist named Irene,
who sympathizes with Vanessa, but in this case, the “Decision Maker” is
Vanessa herself, who has to decide how far to take things. “I really don’t
like being teased about my looks every morning by Sam,” she says. “I
: Ethics at Work
know he’s been around a long time, but what gives him the right to say
all that stuff in front of other people?”
In the end, Vanessa’s decision, as presented in the Leader’s Guide, is
no more elaborate than just to talk to Sam. “At first he was really defen-
sive, talking about how people needed to lighten up. But as I explained
how uncomfortable he made me feel with his comments, he apologized.”
Here, as in many of the other cases, the company presents ethics prob-
lems as no more than a matter of miscommunication. As the company’s
“principles” suggest that ethics and openness go hand in hand, the mes-
sage is reinforced in the awareness cases; problems vanish as open dia-
logue leads to mutual understanding.
Most of the cases present low-level, low-stakes situations that average
employees are likely to face on a day-to-day basis. The strategy makes
sense for a corporation-wide program, since cases have to look at least
somewhat familiar to the vast majority of employees, but the overall
effect is also to reduce ethics to a series of modest human relations prob-
lems. In Case , a supervisor named Paul has scruples about signing
expense reports for a staff engineer named Jean, who has to travel fre-
quently; better communication is the answer. In Case , a computer
technician named Jeff decides that he has to warn his coworker Dan
against letting a subcontractor named Aaron pick up the tab at happy
hour. When a manager named Martha in Case asks Roger to work
overtime to meet a deadline on the very night when Roger’s daughter
has a piano recital, the two of them talk and work out a compromise
where Roger can go to the recital and come back to the office and finish
up afterward. While employees are encouraged to work things out among
themselves, the Leader’s Guide also reminds them frequently that the
company resources of the Ethics Office, the General Counsel, and Human
Resources are there to back them up if all else fails.
Very rarely, a case ventures farther afield, touching not only on per-
sonal decision making but also on the larger question of the corpora-
tion’s ethical position in the world. Case addresses the Foreign Cor-
rupt Practices Act (FCPA) by describing the tense political environment
in the fictional country of Asean, where Lockheed Martin’s offices have
been the target of protests by “radical anti-American activists.” An expa-
triate employee named Yung has been offering snacks to the police offi-
Peeling Back the Onion :
cers assigned to guard the building, on the advice of Min, an office man-
ager who is hired locally. Min has also suggested that cash payments to
the higher ranking officers “as a sign of appreciation for service above
and beyond their normal duties” is customary. “We are guests in this
country,” Yung says, “and we should respect local customs.”
The case threatens to open up a host of complicated ethical questions
involving the role of an American corporation in a developing country
and the place of the weapons industry in the global marketplace. What
is the proper relationship between a wealthy American corporation and
an impoverished local population? To what extent does Lockheed Mar-
tin act as an extension of the U.S. government and its interests when op-
erating abroad? What direct and indirect influences does the presence of
the corporation bring to bear on local politics and social change? These
possible “perspectives” however, are neatly sidestepped in Case , to
make room for the narrower and more practical question of whether
providing courtesies to the local constabulary violates U.S. law. “Yes, the
officers are considered ‘foreign officials,’” argues the local office manager,
Min, “but none of them are in a position to influence the government
officials who are involved in purchasing products from Lockheed Mar-
tin. I am worried that if we don’t make these payments the police may
decide not to show up one day when we really need them.” In the end,
Howard, the regional director checks with counsel. The lawyers approve
the snacks and meals, but they nix the cash payments. A coda suggests
that a donation to the police benevolent fund would be allowed under
the FCPA, if given prior approval.
Lockheed Martin’s ethics office prides itself on a spirit of continuous
self-improvement. In , Brian Sears led a thoroughgoing redesign that
reconsidered the basic theme of the awareness training. “Perspectives”
gave way to a program called “The Ethics Effect,” which focuses on the
larger impact of decisions that involve the application of ethical prin-
ciples. An “ethics meter” provides a visual aid for a series of choices that
range from “unethical”and “on thin ice”at one end to “ethically sound”or
“highly ethical” at the positive end of the spectrum. Another innovation
this year involved including cases “pulled from the headlines”—slightly
disguised accounts of national stories like the scandals at Boeing.
I sat in with Brian Sears on one of the first training sessions in ,
for a group of managers in the Integrated Systems & Solutions facility in
: Ethics at Work
Gaithersburg, Maryland. Sears enjoys watching how the case discussions
play out in real life, and he is always surprised by the debates and inter-
pretations that surface. In the session that I attend, a dozen managers
have a lively discussion about Case , in which an acting manager named
Bill has to figure out what to do when he suspects that some of the travel
expenses reported by a coworker named Jim are fictitious. Some of the
choices are easy. “Approved it, but told Jim that he expects a favor in re-
turn” is a slam dunk for “unethical,” and the group agrees that “Waited
for a permanent manager to be announced and let him or her deal with
it” is ducking the issue and thereby skating “on thin ice.” But they debate
over which solution is better: asking Jim directly for an explanation of
the questioned expenses, or simply turning things over to the audit de-
partment. (The approved answer prefers confronting Jim directly and
giving him a chance to explain himself, before turning him over to the
jaws of the bureaucracy.)
Sears fields criticism from some of the members of the training ses-
sion over one of the proposed solutions in Case , which addresses issues
of environment, safety, and health. A manager named Janet discovers
that members of her team have begun to develop severe allergies in their
temporary work space, and she has to figure out how to balance em-
ployee health with company policy. One of the proposed choices is for
Janet to purchase allergy medicine herself and dispense it to her team.
The booklet terms this a “gray area” solution, tending toward the ethical
because it shows Janet’s personal concern for her staff, but tending to-
ward the unethical because it ignores the source of the problem. In the
training session, however, an irate participant complains that this is the
worst solution of all—after all, she complains, Janet is no physician, and
she might well be doing more harm than good to her staff by pushing
over-the-counter medicine on them. Sears takes diligent notes, and then
offers a mea culpa to the group at the end of the session.“You know, all the
hours that we spent working on that case, and we just never thought of it
in that light,” he confesses.“That’s why I love coming to these sessions—
you just learn new things every time.”
Reflecting the language and tone of Setting the Standard, the annual
ethics awareness training makes personal responsibility and open com-
munication its hallmarks. Ethics problems are sliced and shaped into a
series of moments of individual decision making, and problems are re-
Peeling Back the Onion :
solved by bringing the facts and perspectives into the light. The program
is a triumph in its dynamic engagement of thousands of employees. It is
equally ingenious in restricting the scope of ethics problems, and bol-
stering the corporation’s self-image as a collective enterprise of decent,
hard-working folk.
Beyond Awareness
The annual awareness program is the single largest ethics program to
come out of company headquarters over the course of a year, but it is
only the entering wedge of an extensive host of programs intended both
to meet the concerns of federal regulators, and to “market” ethics as a
value more extensively throughout the corporation.
Fundamental to the overall effort is the corporation’s extensive com-
pliance program. “Compliance” in the defense industry environment
means, quite simply, knowing and following the applicable law, usually
the laws and regulations of the U.S. government. The ethics staff likes to
think of compliance as an essential bedrock for a more comprehensive
program:“It is important to train employees on what is required, as it cul-
tivates doing what is right.” Everyone needs to know and understand the
relevant law; from that foundation, you can, they claim, build a values-
based culture where employees not only follow the letter of the law, but
follow a spirit of “doing the right thing” in situations where the law is
vague or unhelpful.
The compliance office develops training modules on thirty different
topics, ranging from antitrust law to insider trading to protecting classi-
fied information. Employees must “pass” the compliance modules in
areas relevant to their work; the most senior executives have to take them
all. Between and , Lockheed Martin employees completed
nearly . million compliance training sessions. By far the bulk of these
sessions are now done online, at the employee’s convenience, in modules
that take less than an hour. Steve Cohen has expanded his repertoire be-
yond the annual ethics awareness program to help develop some of these
modules, which simulate and parody movie genres like horror and mys-
tery to lighten up what could otherwise be a deadly process. Company ex-
ecutives like to zip through the modules on the airplane, punching in the
answers on their Palm Pilots. The compliance office keeps careful track of
: Ethics at Work
the corporation by business area and company, monitoring closely which
units have run their employees through the relevant trainings and which
are lagging behind. The statistics are not just kept from a sense of order;
they are also crucial documentation, in the event that something goes
wrong, for the company to indemnify itself against the charge that it was
negligent in its duty to inform its employees of the contours of the law.
Brian Sears sees compliance and awareness as necessary, but not suffi-
cient. For several years he had been pondering ways to encourage Lock-
heed Martin employees to invest more personally in the idea of ethics in
the corporation. In , he introduced the first annual Lockheed Mar-
tin Ethics Film Festival. Sears put out a call throughout the company for
employees to make short films that would illustrate the importance of
Lockheed Martin’s values in the workplace. The films could take any
form, and address any topic related to company values, but employees
had to make the films on their own time and at their own expense. The
incentive? The makers of the three top entries would be invited to the
ethics officers’ conference in Orlando, where the winning entry would be
announced at the closing banquet.
Somewhat to Sears’s surprise, the first Lockheed Martin Ethics Film
Festival attracted twenty entries, involving the combined efforts of
dozens of employees from coast to coast, with an entry from across the
border in Canada as well. Most of the entries painted tongue-in-cheek
portraits of employee hijinks: back-room poker games; the employee
who coughs into the phone while calling in sick so he can watch a big
football game on television; wads of money changing hands in shady
deals.
At the Orlando banquet, the finalists show up decked out in their
finest. There are the obligatory jokes about the red carpet and the pa-
parazzi, as they work their way through the meal and wait for the big an-
nouncement. After dinner, four fire safety specialists from the Space Sys-
tems operation in Houston sing the barbershop quartet number that
was the centerpiece of their film, “Harmony of Ethics.” (“Speak truth
with Cour-age / Do what you prom-ise / Be-have responsib-ly . . . .” )
Walter Osadciw, an engineer from the Integrated Systems & Solutions
division in Syracuse, New York, attends the conference with his sixth-
grade daughter, who plays a starring role in his film,“Setting the Example.”
Osadciw himself appears in the film as a red-eyed, harassed executive,
Peeling Back the Onion :
working at home on the afternoon before a big presentation, who with
a few taps on the keyboard changes the numbers on his spreadsheet
from losses to profits. Meanwhile, next door at the kitchen table, Walter’s
daughter is busy altering her report card to bring a set of “C” grades into
the “B” range. The message flashes up on the screen at the film’s end: “It’s
not just what you’re doing . . . It’s what you’re teaching.”
James Houghtaling, also from Syracuse, regales his table with the
finer points of claymation, the technique he used in his entry. His “Ethics
Infomercial” features a buyer who snores noisily in his office, where the
walls are emblazoned with posters extolling the Lockheed Martin values.
The buyer wakes up only to accept a gift of cash from a supplier and
check out pornographic web sites (“Clay Girl”!!!). “Ethics: We help you
sleep at night,” is Houghtaling’s tag line. With suitable fanfare, the enve-
lope is produced after dinner. The “Ethics Infomercial” is declared the
winner, and James Houghtaling walks away with Lockheed Martin’s first
ethics “Oscar.”
Brian Sears is thrilled with the results of the film festival.“When I first
proposed this, I really didn’t have any idea whether we’d get any entries
at all,” he confesses later. “But I think this shows how much enthusiasm
there is in the company for the kinds of things we’re trying to do with
our ethics program. People did this on their own time, and look what
they came up with.” The film festival is now enshrined as one of the cor-
porate ethics office’s annual rituals.
In a similar vein, the ethics office has established an annual “Chair-
man’s Award” for a Lockheed Martin employee who has performed
some ethically upright action in the previous year. The first winner,
selected in , was Ron Covais, a vice-president in the business devel-
opment area. Working on a deal with a foreign entity, Covais blew the
whistle on an “inappropriate request for payment by an individual rep-
resenting the customer,” instigating both an internal and a U.S. govern-
ment investigation. The next year, Vic La Rosa in systems integration in-
advertently received an e-mail from a government source with technical
details about a competitor’s product; he deleted the e-mail, and reported
the situation to the sender. The Chairman’s Award sends the message to
employees at large that they will be rewarded for risk-taking conduct
that follows the company’s values.
: Ethics at Work
Measuring Success
“One of the things about the ethics business: you can’t grade people,”
says Phil Tenney, director of ethics operations. “But we’re an engineer-
ing company. We need metrics for everything, to see if things are going
well.” Tenney is the man entrusted with the responsibility of measuring
the success of Lockheed Martin’s ethics program. His principal tool is a
biennial survey of the corporation’s entire workforce, which he puts to-
gether with the help of the Ethics Resource Center, a nonprofit group
based in Washington, D.C., that consults to dozens of corporations.
In , nearly half of Lockheed Martin’s employees returned the sur-
veys, so Phil Tenney had more than , responses to deal with.
(Actually, the surveys were administered by and returned to the Ethics
Resource Center, to assure the integrity of the process. But Tenney spent
a couple of days on a lawn chair in the summer of working his way
through the many thousands of individual comments that supple-
mented the multiple-choice questions.) The vast majority of the surveys
were completed online, although more than , were filled out by
hand. When Lockheed Martin conducted the corporation’s first survey
in , barely a quarter of them were returned.
The trendlines on the survey over the past several years are gratifying
for Tenney and his colleagues in the Office of Ethics and Business Con-
duct. Nearly all employees ( percent) asserted that they know what
ethical business conduct is, and percent were clear about how to find
advice about ethics issues in the workplace. Even better, every time the
survey has been done, a higher percentage of employees believes that
Lockheed’s ethical principles are applied always or often in the everyday
work of the corporation. Seventy-four percent felt that they always or
often felt that “honesty” was evident at Lockheed Martin in ; that
figure had climbed to percent by (and the number that believed
that honesty was “never” in evidence had shrunk to a fraction of per-
cent). The figures for the other ethics principles have showed similar
jumps.
When the survey moves from abstract principles to specific observa-
tions, however, the picture is somewhat less rosy. The percentage that
occasionally or frequently felt pressured by fellow employees or man-
Peeling Back the Onion :
agement to compromise Lockheed Martin’s standards was down in ,
but the figure still stood at percent. Those who felt such pressure cited
aggressive business objectives, schedule pressures, and overbearing
supervisors as the principal causes. The survey does not bother to ask
whether employees have themselves engaged in unethical conduct,
under the sound reasoning that answers to this question might be some-
thing less than reliable.
Most troubling to the corporation’s ethics leadership were results that
showed that misbehavior could be observed but go unreported. Thirty
percent of the company’s employees in said that they occasionally
or frequently observed conduct that they believed violated Lockheed
Martin’s ethics standards. Since, as we have seen, the standards cover a
variety of minor matters as well as major misconduct, this figure alone
is not particularly shocking, given the variety of human experience and
behavior in the workplace. Of more concern, however, was the chart that
shows that of those who saw things amiss, fewer than half ( percent)
reported the conduct.5 Those who failed to report simply did not trust
the Lockheed Martin system; they explained their reluctance by cyni-
cism (more than half simply did not believe that anything would be
done) or by fear of retaliation of management. In a work environment
with tens of thousands of unionized line employees, as well as engineers
and former military personnel, it has proved difficult to persuade Lock-
heed Martin employees that reporting ethics concerns is a higher good
than loyalty to one’s peers. Fear of retaliation by management decreased
(among the whole workforce, from percent in to percent in
), but the figure remained an indicator of a lingering culture of
mistrust.
The Office of Ethics and Business conduct used the results of the
survey to craft new responses to a specific problem: the capacity of
supervisors to address ethics issues. The survey showed a high level of
disappointment among those employees who did report ethics miscon-
duct to their supervisors. The response was often ineffectual; indeed,
some employees felt that their supervisors failed to recognize when an
ethics issue was in front of them. In response, the corporate office
launched a new initiative in called “Ethics Tools for Leaders,” de-
signed to reach the corporation’s , managers and encourage them
to be active participants in the company’s ethics policies and process.
: Ethics at Work
The survey presented an upbeat picture of employee “buy-in” to
the corporation’s abstract ethics principles, somewhat undercut by a
streak of cynicism about Lockheed Martin’s follow-through and ques-
tions about the company’s commitment to its own workforce. More
than one-third of the respondents could not say affirmatively that they
felt valued as an employee of the corporation. The evidence suggests that
the ethics program has, in fact, contributed to employee goodwill, but
that a strong minority of employees still wonder just how deep the cor-
poration’s commitment really goes. 6
On the Front Lines
The people responsible for defining and maintaining that sense of com-
mitment are Lockheed Martin’s sixty-five ethics officers. “You must be
honest, trustworthy, independent, discreet, and responsible,” says the
corporation’s Ethics Officer Resource Manual. “More importantly, you
must be perceived as such by the employee population.”
In an era of intensive scrutiny, the figure of the “ethics officer” has
been an increasingly visible presence in American corporations. Part
counselor, part investigator, part marketer, the ethics officer is intended
to serve as the living emblem of the corporation’s principles.
No one enters Lockheed Martin on the ethics officer job track. It is a
standing principle that ethics officers should be chosen from among the
ranks, by identifying veteran employees who know the company culture
and have demonstrated loyalty over time. There is indeed a national
Ethics Officers Association, based in Massachusetts, with more than ,
members as of .7 But the idea that ethics officers represent a new,
mobile professional group would be anathema to the Lockheed Martin
culture. Ethics in the Lockheed Martin conception is only partly about
universal principles of the right and the good. It is much more about
strengthening commonsense ideas that the corporation likes to think of
as homegrown.
Lockheed Martin employees most typically become ethics officers
through other service offices. Brian Sears at corporate headquarters was
an auditor.Alice Edmonds at Lockheed Martin Space Operations in Crys-
tal City,Virginia, had spent nearly three decades in human resources, be-
fore moving into an ethics officer position. Cathy Harris, in Fairfax, Vir-
Peeling Back the Onion :
ginia, is a relative oddity: An engineer and a program manager by back-
ground, she chose to become an ethics officer because she realized that
“the farther I went up the management chain, the farther I was getting
away from the people issues that I cared about most.” Vice-president
Maryanne Lavan would like to see more employees do a stint as ethics
officers as they rise within the corporate hierarchy: “I’d like the ethics
office to be a place for high-potential employees,” she says. “It’s good
experience for people on the rise. You should know what people are
upset about and complain about, and you can’t know until you’re in the
middle of it.”
“People issues” are obvious drivers for Lockheed Martin ethics offi-
cers. Gregarious, sincere, slightly self-deprecating, they spend a lot of
their time providing informal advice and counseling to employees, as
well as troubleshooting minor problems. Working in relative isolation
from one another, they have considerable opportunity to be responsive
to Lockheed Martin’s rank and file, operating without the stigma that is
sometimes attached to offices like human resources or the general coun-
sel, which are often, fairly or not, perceived as looking after the interests
of management first. Their first job is to be visible: When you walk the
halls of the Integrated Systems & Solutions facility in Gaithersberg, Mary-
land, you cannot avoid Wendy Donaldson’s amiable face, beaming out at
you from every bulletin board. Since Donaldson’s area of responsibility
includes Lockheed Martin units around the country, and as distant as
California, she has established a drop-in program she calls “The Ethics
Officer is ” to highlight her availability whenever she is on site. Ethics
officers are encouraged to “Be Accessible,”“Be Visible,” and “Build Trust
and Communication.” Some conduct informal ethics discussion ses-
sions, but most carry on this part of their work in conversations in cu-
bicles, over coffee, and in any place where employees might sit down for
a break.
While selling the corporation’s values person by person is an important
element of the ethics officer’s job, the most sustained and complex part
of the work is more adversarial: the process of formal ethics investiga-
tions. Since the implementation of the federal sentencing guidelines, a
rock-bottom fundamental aspect of any corporate ethics program has
: Ethics at Work
been the establishment of a confidential “hot line” where employees can
report unethical or illegal behavior that they observe while on the job.
At Lockheed Martin, there are dozens of such hotlines, known as
“Helplines.” Many ethics officers have established one within their busi-
ness areas, so employees feel that they can report their complaints to
someone who has at least some knowledge of local conditions. Often
this line is answered only by the ethics officer. Company policy instructs
the ethics officers to tell callers that they may remain anonymous if they
so choose (caller ID is not permitted on these lines), but it also instructs
them to encourage callers to provide their identity to the ethics officer,
who is pledged not to reveal the identity unless legally bound to do so.
If employees decide, for whatever reason, that they do not wish to call
their local hotline, Lockheed Martin maintains a company-wide ethics
Helpline at –-[LM ETHICS]. The man who usually picks up calls to
that number is Bud Reid, a thirty-year veteran of the U.S. Army who
moved into the private sector in the s, accepting a position with
Martin Marietta. Reid had been in communications and public relations
in the Army, and soon after his arrival at Martin Marietta he was per-
suaded to join the team that was developing the company’s new ethics
program. Reid still believes that some of the best aspects of Lockheed
Martin’s ethics operation—its strong centralization, its innovations in
terms of “marketing” ethics, and its emphasis on networking—grew
more out of the Martin Marietta heritage than the Lockheed side.
Bud Reid estimates that he takes between fifty and sixty calls per week
on the ethics Helpline. Many of the calls are human-resource and bu-
reaucratic matters: An employee feels slighted by his supervisor; an em-
ployee feels that she has not received the appropriate benefits. Some are
calls for advice: Can I take a subcontractor out to dinner? Is it okay if my
daughter’s marketing company solicits business from Lockheed Martin?
Most of these contacts (two-thirds) end up as “memos to file,” simply re-
cording the fact of the call in the database, with no further action re-
quired. Reid takes even the smallest inquiry seriously, even if on the face
of it the query has little to do with ethics. “Employees at the lower end
of the food chain don’t have much power,” he says. “We see ourselves as
advocates for the little guy. We want to work small cases just as hard as we
can, so when the big ticket items come up, everyone has confidence in
the system.”“Memos to file” are a mark of success in the corporate ethics
Peeling Back the Onion :
office; they suggest employee interest in and commitment to ethics, but
at a level of seriousness that does not pose any significant threat.
Those cases that turn into investigations undergo, in theory at least, a
rigorous twenty-one-step process that includes securing evidence, con-
ferring with the legal office, conducting interviews, writing reports, hav-
ing the matter reviewed by a supervisor, and recording every step in a
database called CERTS. The ethics staff takes great pride and pleasure
in this process; it is clear that there are few joys in ethics work that com-
pare to “peeling back the onion,” as Brian Sears and others like to say.
The written procedure is elaborate and thorough, diagrammed with
boxes of different shapes and sizes, arrows guiding the investigator
through various possibilities of the narrative. If all goes well, the process
ends with “Final Report Submitted,” and if the “Decision Maker Accept”
box follows the “” arrow, the satisfying conclusion is given as “Doc-
umentation Retention.” After that, the process is in the hands of Human
Resources or the legal department, which takes the appropriate action if
the investigator has convincingly uncovered misdeeds.
Investigations are sometimes conducted in tandem with other units.
In Gaithersberg, Maryland, I met with Judith Casey, the head of the Com-
puter Incident Response Team (CIRT), and the three young college grad-
uates whom she proudly calls her “boys.” Casey, a twenty-year company
veteran whose specialty used to be disaster recovery, moved into investi-
gations, under the auspices of the company’s security office. Now, she
and “the boys”—Andrew Robbins, Johnny Perera, and Sam Maxwell—
roam through the company’s computer networks, keeping an eye out for
employees who use their machines for personal use, or, more seriously,
violate security or proprietary procedures. They work closely on inves-
tigations with Wendy Donaldson, the ethics officer on site, and they
bring to their work an ambivalent zealousness that reflects the conflict-
ing values of the high-tech world. On the one hand, they are a little
sheepish about their role as company spies—“It’s easy to slip into a God
complex,” says Sam Maxwell. But on the other hand, they feel themselves
working at ground zero of corporate reform, and they take employee
misdeeds personally. Andrew Robbins was studying computer science at
the University of Virginia when the corporate scandals broke in
and ; now he says that “the best neighbor is a nosy neighbor,” some-
thing he remembers as he snoops through suspicious files. After all, says
: Ethics at Work
Johnny Perera,“The monitoring is open. It’s very clear from day one that
your privacy is not protected on the Lockheed Martin computer net-
work.” In an average year, Wendy Donaldson works a dozen or more
cases with the CIRT, with the majority ending in some sort of conse-
quence for one or more employees.
Lockheed Martin’s ethics officers cheerfully acknowledge that minor,
even trivial cases are a large part of their caseload.“We’re something like
an internal affairs division in a police department,” ethics officer Roger
Kingman explains to me. “We don’t frequently deal with the kinds of
things that bring down an Enron.” He agrees to walk me through a typ-
ical investigation, as long as I do not mention his real name or location,
and as long as I change some of the details about the case: Protection, as
far as possible, for both the accuser and the accused in an investigation
is a fundamental principle.
Roger Kingman generally conducts only three or four investigations
each year himself. More often, he will refer cases that require investiga-
tion to the security department, or to Human Resources, or to the gen-
eral counsel; he will then monitor those cases, and advise on particular
aspects, but he will not play a leading role. He is not prepared to handle
what he calls “cloak-and-dagger” stuff (for example, surreptitiously
trailing an employee who is alleged to be conducting an outside business
on company time), nor can he pursue arcane questions of financial or
technical misdoing. But certain situations are a match for his skills and
his schedule, or else they involve suspicions about the performance of
one of the other investigating offices themselves, so he will take a more
prominent role.
One day in the winter of , an employee named Anne came to visit
Roger. On the job for less than a year, Anne felt that she was under-
utilized and badly treated by her supervisor, Beth. Anne had previously
complained up the ladder to Beth’s manager, to Human Resources, and
even to the company president, but she had received no satisfaction. A
coworker had suggested that she take her complaint to the ethics officer,
so that is why she appeared one day in Kingman’s office. Anne asked
Kingman to help her out, and she asked him, incidentally, whether he
was aware that Beth had the good fortune of having her own mother,
Carol, as her supervisor, even though they did not work at the same lo-
cation. Is that kind of thing allowed at Lockheed Martin? Anne asked.
Peeling Back the Onion :
Kingman started nosing around, trying to find out what he could
about Anne’s assertions without confronting Beth and Carol directly.
“You’d be surprised,” he told me, “how difficult it is to get information
in a company this big, with all the changes in organizational structure
and management.” He found out that few people had much sympathy
for Anne, who was not considered an outstanding worker and had a rep-
utation for being a bit of a whiner. His inquiries about Beth and Carol,
however, turned up some surprises. The two women had different last
names, but indeed, Carol was Beth’s mother. It turned out that Carol,
who was responsible for helping the communications division hire con-
tract employees, had shoehorned Beth into her first job at Lockheed
Martin, and then had maneuvered things so that Beth received a hefty
raise in her first year. Carol did not exactly hide the fact that Beth was her
daughter, but she implied to everyone who asked that the arrangement
had been approved by someone higher up the chain. Kingman learned
that within a few months, Carol was even the person who was formally
approving her daughter’s time sheets.
Now Anne’s original complaint was somewhat beside the point. King-
man confronted Carol about the situation, and discovered that she did
not believe that she had done anything wrong. Her daughter Beth, after
all, was widely acknowledged as an excellent employee, and she felt that
she had been sufficiently open about her relationship with others in the
corporation. Carol admitted that there were elements of the situation
(Beth’s spiraling salary, Carol’s oversight of Beth’s time sheets) that per-
haps “didn’t look good,” but she viewed these as superficial problems.
“Towards the end of the conversation I spotted some crocodile tears,”
Kingman says, but by that point he did not have a great deal of confi-
dence in Carol’s sincerity. He brought the facts of the case to a commit-
tee of senior executives; in short order, Beth was terminated because her
hiring was tainted from the beginning, and Carol, a thirty-year Lock-
heed Martin employee, was also let go. “When I tell people what I do for
a living, they think I’m helping people deal with ethical dilemmas all day
long,” Kingman says. “In fact, a lot of what I do is to figure out whether
what people did was or was not in violation of company policy.”
Indeed, the ethics officers view the fact that so many cases are trivial
as a sign of success—like the small-town cop who can give more traffic
tickets because no dead bodies ever turn up on Main Street. Many calls
: Ethics at Work
like the one to Kingman reflect human resource problems—an em-
ployee claims that she has been passed up for promotion, or her super-
visor is spending too much time on the golf course. One of Brian Sears’s
favorite cases involves the employee who called the ethics hotline to com-
plain that “I ain’t dead.” Sears’s investigation revealed that the woman’s
benefits had been cut off, because she had been mixed up with another
employee by the same name who had indeed died in the previous month.
As Bud Reid says, any complaint that an employee believes is an ethics
issue should be treated as an ethics issue. This is the way that ethics be-
comes instilled and trusted throughout the company culture.
Ethics officers are particularly concerned, they say, about the vulner-
ability of Lockheed Martin’s newest employees to misdeeds. Some of
this is a matter of opportunity; in many Lockheed Martin facilities, new
employees must wait for months with little to do before receiving their
security clearances to work on sensitive projects. In the meantime, bore-
dom provides the temptation to stray, especially with regard to computer
use. Some of this vulnerability is ascribed to generational change—a
perceived lack of moral fiber in younger people, and the lack of a clear
moral framework for the Internet and other aspects of the high-tech
world of the twenty-first century. The ethics office assumes some of the
responsibility itself. Noting that survey results showed that new em-
ployees were frequently confused and underinformed about the cor-
poration’s values, they created a new “ethics orientation” to bring new
hires up to speed. Ethics officers are quite open about the continuing
problems with the newest members of the Lockheed Martin family, but
new employees, with restricted access to information and equipment,
are seldom in a position to cause deep and lasting harm through their
peccadilloes.
It is much more difficult, however, to persuade the ethics staff to talk
about more serious cases. When I ask about investigations of significant
breaches, I hear stories like the one about the former employee in Fair-
fax, Virginia, who managed to run up thousands of dollars in personal
travel and other expenses on a corporate credit card, before he was
caught through a routine company-wide audit. Brian Sears does not
pretend that Lockheed Martin is spotless at the upper end of the “food
chain,” but he is unwilling to give me a sense of the scope and frequency
of investigations of senior management. In the absence of more specific
Peeling Back the Onion :
data, it is difficult to escape the suspicion that a very great amount of the
corporation’s ethics assets are devoted to the mundane. It is difficult to
see how investigations of golf games and performance reviews can gen-
uinely put a stop to the kinds of high-level corporate scandals that have
infected some of the biggest names of industry in recent years.
Cooperation Among Competitors
Lockheed Martin’s ethics program does not operate in a vacuum. Indeed,
it is part of an unusually active and cooperative arrangement between
other defense contractors that aims to establish ethics as firmly as pos-
sible through the industry. The Defense Industry Initiative on Ethics and
Business Conduct (DII) is an unusual consortium. It has no dedicated
staff and no office. What it has instead is a set of principles, and a steer-
ing committee composed of leading executives from the more than fifty
defense contractors who have pledged to abide by those principles. The
DII’s principal activity is an annual conference in Washington, D.C.,
where companies share “best practices” in ethics. Its programs are coor-
dinated by Richard Bednar, an attorney at the Washington, D.C., law
firm of Crowell and Moring. Bednar serves not only as a hub of the net-
work, but also as an active advocate for the member corporations in as-
suring the Department of Defense that its suppliers are maintaining
high standards of integrity.
“In another milieu, these companies are vigorous competitors,” Bed-
nar says,“but in our milieu they cooperate in a way that is not replicated
anywhere else.” Bednar cites Lockheed Martin as a leader in the DII—
both Lockheed and Martin Marietta were among the original signato-
ries in —but he is also quick to point out what he considers the
wealth of creativity and sincerity throughout the industry. “This is a
consortium that is populated with realists,” he says. “These people know
that trouble and unwanted conduct is going to come to any large corpo-
ration. The real question is: What are you going to do about it? Our
members are willing to deal with root causes.”
Like Lockheed Martin, other corporations in the industry have
moved to “market” ethics more effectively within their organizations.
Public relations campaigns, web-based modules, leveraging of company
resources, widespread training sessions—the DII forum has helped
: Ethics at Work
companies build programs that make ethics highly visible within the
corporation. Most observers agree that, largely because of the existence
of the DII since the s, many defense contractors had already created
programs to address most of the recently enacted standards, even before
the requirements of recent federal legislation.
Yet despite the success of the DII and the widespread adoption of
ethics programs in the industry, one of its most important members was
rocked by two enormous scandals in . These incidents, involving the
Boeing Corporation, left ethics officers across the defense industry won-
dering what went wrong, and just how vulnerable their own organiza-
tions might be to similar problems.
The two scandals at Boeing involved very different types of incidents.
The first, coincidentally, involved Lockheed Martin. In , Boeing was
bidding for a new Air Force contract to build an “Evolved Expendable
Launch Vehicle” (EELV), a launcher for military payloads. Lockheed
Martin was bidding for the contract as well, but Boeing had an advantage:
A former employee of Lockheed Martin had been hired by McDonnell-
Douglas just prior to its merger with Boeing, and the employee had
brought with him boxloads of documents related to Lockheed Martin’s
bid. The transfer of these technical and financial materials, proprietary
information that belonged legally to Lockheed Martin, could have given
Boeing a substantial advantage in framing a competitive bid for the con-
tract. Boeing was in fact awarded the lion’s share of the EELV business in
, but information about the existence of the proprietary informa-
tion began to leak out the next year. Boeing tried to contain the damage
by acknowledging the existence of a small number of documents in
, and by subsequently firing three of the employees involved. But
wider allegations continued to surface, and by April , under pres-
sure of a grand jury subpoena and a federal investigation, Boeing had re-
turned more than , pages of documents to Lockheed Martin. The
EELV incident, in combination with two other documented incidents
where Boeing illegally obtained proprietary information in connection
with other contracts, prompted the Air Force to disqualify Boeing in July
from three major projects, costing the corporation an estimated $
billion in new business.
The second incident, which came to light later in , was no less
dramatic. In January , Boeing hired Darleen Druyun as vice-president
Peeling Back the Onion :
and deputy general manager of its Missile Defense Systems unit. Ms.
Druyun had retired just two months earlier from a senior position in the
U.S. Air Force, where her principal responsibilities were in the area of
procurement. Following allegations by watchdog groups, the Depart-
ment of Defense launched an investigation into the circumstances re-
garding Ms. Druyun’s employment at Boeing, and the corporation sub-
sequently undertook its own investigation. The company’s investigation
revealed that Boeing chief financial officer (CFO) Michael Sears had
begun employment negotiations with Darleen Druyun not only while
she was still with the Air Force, but at a time when she had responsibil-
ity for procurement matters in which Boeing was directly involved. On
November , , Boeing announced that both Sears and Druyun had
been fired. A week later, to the consternation of the industry, Boeing
CEO Philip Condit abruptly resigned. Within a year, two major scandals
had cost a founding member of the DII not only billions of dollars of
business, but also the jobs of its top leadership.
What went wrong? As at Lockheed Martin, Boeing had invested a
great deal of time and money since in developing an extensive
ethics and business conduct program. (Indeed, Nancy Higgins, who
headed Lockheed Martin’s program from to , had previously
led the Boeing operation for several years.) So how had such dramatic
and costly incidents happened? In the aftermath of each scandal, Boeing
sought outside help to answer these questions. Former U.S. Senator
Warren Rudman and a team from the New York law firm of Paul, Weiss,
Rifkind, Wharton & Garrison prepared extensive reports on each situa-
tion.8 Rudman’s reports were generally positive about the extent and se-
riousness of Boeing’s ethics program, applauding the corporation for its
long-standing commitment and for its allocation of resources. The re-
ports called both the EELV and Druyun incidents isolated events. Never-
theless, the reports made a series of recommendations, including more
direct involvement by senior management, more resources for the ethics
program, and more training on specific topics. The reports also high-
lighted the relatively decentralized structure of Boeing’s ethics program.
Boeing’s program left considerable autonomy to the individual business
units, creating inconsistencies and variations across the larger corpora-
tion. The corporation’s “Ethics Advisors” reported directly to their com-
pany presidents, with only a “dotted-line” report to the vice-president
: Ethics at Work
for business ethics, thereby creating questions about their genuine inde-
pendence.
Lockheed Martin could take some comfort in the Rudman reports’
argument about centralization. Its own ethics program clearly has a
strong foundation at corporate headquarters; while it also wrestles with
the complexities of units with dozens of different “heritages,” creating
consistency across the corporation has been a significant element of the
program for many years. Yet despite the reassurances of the Rudman re-
ports, the scandals at Boeing are deeply troubling. While there are im-
portant variations, the DII has helped assure that there are a great many
similarities between the ethics programs of the major defense contrac-
tors. If two scandals with such major consequences could emerge in a
single year in a corporation where ethics had been on the agenda for
some time, then perhaps the weaknesses are more significant than they
first appear. It is possible that Boeing’s troubles stemmed from a combi-
nation of bad luck and a few small defects in an otherwise healthy struc-
ture. But it is also possible that the very extensiveness of the ethics pro-
grams offered by DII signatories masks some serious vulnerabilities that
have not yet been fully confronted.
Accomplishments
“One Company, One Team”: This is the mantra that I hear at the ethics
officers’ conference, and after a while, I come to realize that corporate
harmonization may be the single most important function of Lockheed
Martin’s ethics operation. The top executives have begun to understand
that diversity—defined in a peculiarly broad way—is one of the most
significant challenges facing the corporation in the coming years. The
ethics program aspires to create a shared rhetoric that binds a far-flung
set of employees into a loyal and coherent body.
At the Orlando conference, Kimberly Galavetz, a vice-president
in the audit division, shows up to speak on this topic. Galavetz is part of
a leadership group that is tackling a company-wide initiative on diver-
sity. The presenting problem, she explains, is the aging employee base of
the company. More than percent of Lockheed Martin’s workforce is
over forty, and with the prospect of a continuing buildup of the defense
industry in the post-/ world, the corporation is likely to be doing a
Peeling Back the Onion :
great deal of hiring in the coming decade. Lockheed Martin will need
engineers and supporting staff by the thousands, and the next genera-
tion is not going to look like the current workforce. “Do we have a di-
verse enough employee population to think about the defense needs of
this country in the years to come?” Galavetz asks rhetorically. “We have
to admit that our customers in most cases are more diverse than we are.”
The message, as Galavetz expounds it, is clear. If ethics has been a suc-
cess as a corporation-wide effort, then “diversity is the next foundational
thing that we need to get baked in” to the corporate culture.
But what does diversity mean in the Lockheed Martin context? Gala-
vetz is eager to expand the definition as broadly as possible, in order to
avoid talking about any specific effort or problem. She manages to speak
on diversity for nearly an hour without uttering the word “race.” She
mentions no specific racial, religious, or ethnic group. The words “affir-
mative action” and “multiculturalism” never cross her lips. Instead, di-
versity in Galavetz’s exposition is a matter of style, of civility, of corpo-
rate identity. “Diversity at Lockheed Martin,” she tells the group,“means
creating an inclusive team that values and leverages each person’s indi-
viduality.” This means things like creating a “welcoming environment,”
promoting the idea that “we value each other across the corporation,”
and developing “good listening” and “flexible attitudes.” Later, over
lunch, she explains to me that not mentioning race is precisely the point.
“We’re trying to focus on diversity in all of its senses,” she tells me, “not
just focus on one aspect of it.” Diversity at Lockheed Martin, in other
words, means promoting a generalized aura of goodwill, and avoiding
direct confrontation with any specific issues that might be threatening
or divisive.
It is no coincidence that Galavetz is making her pitch before the ethics
officers, because promoting that generalized aura of goodwill is an inte-
gral part of the “One Company, One Team” mission of the ethics pro-
gram. Indeed, when people at Lockheed Martin talk about diversity, they
are most likely referring in the first instance to the variety of products,
ways of doing business, and cultures of the many “heritage companies”
that make up the corporation. The differences between African Ameri-
cans and Latinos seem trivial when weighed in corporate terms against
the difference between a former division of IBM in Pennsylvania that
makes systems software and a former plant of General Dynamics in
: Ethics at Work
Texas that manufactures F- fighter jets. Each of the units that have
been swallowed up by the new Lockheed Martin has its own practices,
culture, and history, sometimes stretching back half a century or more.
Creating “synergy” among these diverse units is one of the most press-
ing concerns of senior management.
The code of conduct, the annual ethics awareness program, a corpo-
ration-wide “ethics help line”—these are intended to reach every
single member of the Lockheed Martin corporation. They represent an
attempt to recreate the sense of “family” for which the Lockheed part of
its heritage was known, back when its operations were based principally
in California. The omnipresence of the six company “values” constitutes
a genuine commitment to promoting the idea of good business practice,
a genuine fear of public exposure and federal investigations, and a gen-
uine expectation that a more unified corporation will be a more profit-
able corporation.
The Orlando conference is a celebration of the accomplishments of
the ethics operation, and a four-day pep talk for the ethics officers. The
corporation’s investment in ethics is substantial, and the operation’s
success in winning a majority of the corporation’s employees over to its
theme is tangible. Yet underlying the upbeat rhetoric of “mission suc-
cess” and “one company, one team,” there is a nagging sense of doubt. If
ethics is so important to the company’s mission, why does the career
path of an ethics officer seem so marginal in the corporation structure?
If the corporation’s values are implanted so firmly, why does the
prospect of the “bad apple” strike so much fear? Ethics seems easy when
times are good, and when the corporation is showing its public face. But
what happens under the pressures of the deadline, of the bottom line?
Like “diversity,”“ethics” at Lockheed Martin means something broad,
blandly acceptable, unarguable. Yet the very breadth of the definition
(anything that an employee thinks is an ethics problem is an ethics prob-
lem) conceals the strict boundaries that the corporation erects around the
field. Diversity in the Lockheed Martin context embraces words like “tol-
erance” and “respect,” but avoids difficult engagements with race, ethnic-
ity, and other sensitive areas of human difference. Ethics in the Lockheed
Martin context embraces generalized concepts like honesty and integrity,
but evades difficult engagements with issues that go to the very core of the
corporation’s business and mission. The boundaries in Lockheed Martin’s
Peeling Back the Onion :
ethics program create its coherence, its strength, and its esprit de corps.
But the boundaries also threaten the corporation’s credibility—first to the
outside world, and eventually, perhaps to its own employee community.
Before exploring the vulnerabilities, however, it is important to recog-
nize how much Lockheed Martin’s current ethics and business program
has already accomplished. At least five major factors plant that program
on a firm foundation:
• Breadth. Lockheed Martin’s program reaches every corner of
the corporation, actively engaging employees at every level, and
creating a strong consciousness about at least the rhetorical im-
portance of ethics and values. The sustained commitment of time,
personnel, money, and other resources to the program is genuine
and impressive.
• Creativity. The corporation discovered early on that ethics needed
not just to be discussed, but to be “marketed” if it was going to
have a genuine impact. The ethics program has succeeded in
arousing interest in, even passion about, issues of values, by cre-
ating formats that engage employees, rather than simply “teach-
ing” them. The gamelike format of the awareness program, com-
bined with innovations like the film festival, has helped to create
an atmosphere where ethics is debated, not simply tolerated.
• Values, not just compliance. Lockheed Martin has been a leader
in understanding that its programs need to do more than just tell
people how to follow the rules. Following the rules is important,
especially in an industry where the rules are so complex and often
contradictory. But key principles of Lockheed Martin’s program
are that the rules do not cover every imaginable situation, that
individuals need to be empowered to make good decisions, and
that an internalization of values is one important factor in good
decision making.
• Strong endorsement from leadership. The direct involvement
of the senior leadership of the corporation has been crucial to the
development of Lockheed Martin’s program. Norm Augustine’s
stint in the first Dilbert video is legendary throughout the cor-
: Ethics at Work
porate ethics world, and the continuing support for the ethics
program through changes in leadership since has enabled
the program to thrive.
• Continuous evaluation and improvement. The ethics office’s
employee surveys are at the forefront of a steady process of inter-
nal examination of the strengths and weaknesses of the corpora-
tion’s ethics program. The capacity to build on strengths and face
shortcomings honestly gives the program a suppleness that has
served it well in the past, and is the best protection against stale-
ness and complacency in the future. Through sharing with the
DII, publishing the results of internal evaluations, and even al-
lowing a researcher access to materials and programs, Lockheed
Martin has also shown an admirable commitment to making its
ethics program visible and open to criticism—another crucial
element in allowing for continuous improvement.
Lockheed Martin has applied its “can-do,” engineering culture to de-
veloping its ethics program. A problem was identified. A team of people
was created to tackle the problem. The team experimented with various
methods, working within a specific set of parameters: The program had
to reach everyone in the corporation, it had to be clear and comprehen-
sible, and it had to be measurable. With those parameters in mind, the
corporation created from scratch a new and dynamic unit, and empow-
ered that organization through committing money, time, and the public
backing of senior management. Surveys, online databases, and ethics
officer records document hundreds of thousands of ethics interactions
each year. The ethics program may not break any flight speed records, nor
will its firepower threaten the enemies of liberty, but it nevertheless rep-
resents a triumph of an engineering culture: a clean, elegant structure to
contain the inherent messiness of nature and the human experience.
The ethics officers do not pretend that they have created an airtight
system. Indeed, the Lockheed Martin ethics officers see every scandal in
their industry as a cautionary tale, and they recognize that a single rene-
gade employee could bring down the whole careful structure that they
have built. The corporation is not a family, or even a village, but a far-
flung metropolis, and the ethics officers expect to find, among the ma-
jority of good-hearted citizens, a tiny minority of workers who flout the
Peeling Back the Onion :
company’s ethics standards. But they believe that these individuals can
be contained and identified if the message on values and ethics echoes
loudly and persistently enough throughout the corporation.
Furthermore, the Lockheed Martin ethics leadership has understood
that the message cannot echo loudly and persistently unless it is not only
important but interesting. Beginning with Dilbert and the “Ethics Chal-
lenge” board game, the corporation has sought to build confidence in
the program through strategic entertainment. The more recent ethics
film festival has continued this spirit. The company’s internal surveys,
and my own observations, suggest that the corporation has had wide-
spread success in sustaining interest and confidence—broadly, if not
universally.
For its pains, Lockheed Martin has been widely hailed within the
greater “ethics community” for its programs. Its activities meet and
often exceed the experts’ benchmarks. How-to books on business ethics
cite the corporation’s programs frequently, and Lockheed Martin has
been honored with industry awards. In , for example, a magazine
called Workforce Management named Lockheed Martin the winner of its
Optimas award for ethics, citing the company’s commitment to the idea
that “Good ethics is good business.”9 Since , Lockheed Martin has
been widely hailed as a leader this area, responding to historical chal-
lenges vigorously and effectively to develop a program that represents
American business ethics at its best. As I have noted before, few other
American institutions—in either the for-profit or the nonprofit world—
have made so concerted and sustained an effort.
: Ethics at Work
