Tyco's Ethical Turnaround: Leadership, Communication & Change

Rebuilding Employee Morale and Ethical Vision

The turnaround team needed to address employee frustrations in order to help generate a climate of change. The employees clearly saw the need for change and had motivation, but they were also dealing with low morale. They needed to be given a clear vision — embodied in the ethics letter and website — and an ethical leader they could believe in. This was achieved most visibly through Tyco's new CEO, Ed Breen, whose highly symbolic early decisions signaled a genuine commitment to reform. In general, the turnaround team needed to demonstrate the sincerity of its mission and the depth of transformation that would occur. When employees witnessed this commitment, they would be willing to engage in the transformation themselves.

Training Vignette: Contrasting Ethical and Unethical Behavior

A vignette that could be used in ethics training would show the old standards of behavior contrasted directly with the new ones.

Scene One — Unethical Behavior:

Manager to employee: "We need to show a profit this quarter, but it looks like sales are down."
Employee: "Maybe we can create some sales."
Manager: "That's a good idea. We'll sell that stuff next quarter anyway."

Announcer: "This is unethical behavior. To see how this situation should have been dealt with, keep viewing."

Scene Two — Ethical Behavior:

Manager to employee: "We need to show a profit this quarter, but it looks like sales are down."
Employee: "We should find out why sales are down, so we can present a plan to senior management about how we are going to fix the problem and increase sales next quarter."
Manager: "That's a great idea. Get a team together and put a plan in place — I want results in a week."

International Considerations for Ethics Training

There are a number of international issues to consider when developing such a vignette. First, the dialogue must be adequately translated. Second, the cultural messages must be appropriate for each audience. This includes non-verbal communication and the norms of interaction between employees and managers in different regions. Local settings could also be incorporated to provide a greater sense of relevance for international employees. These adaptations are important because cross-cultural communication norms vary significantly and can affect how ethical messages are received.

The Four Types of Change Conversations

Organizational change requires distinct types of structured conversations, each serving a different purpose in guiding employees through the transformation process.

The first type is the introductory conversation, used to present the idea of change. After years of unethical behavior, Tyco employees had low morale and needed to be introduced to the idea that senior management was now serious about reforming the company's culture and ethics. The second type is the understanding conversation, in which people are helped to understand a new process. In Tyco's case, this meant explaining the specific means by which the company's ethics would be reformed.

The third type is the performance conversation, in which specific results are requested. This conversation takes the idea of ethical reform and attaches concrete desired outcomes and measurable objectives, giving employees clear targets to work toward. The fourth type is the closure conversation, which gives employees a sense of accomplishment. This is particularly important for Tyco employees, who needed affirmation that they were on the right track. The closure conversation also gives management the opportunity to provide feedback on the progress made across the change initiative.

This framework for managing organizational change through structured dialogue ensures that employees are not simply told what to do, but are guided through every phase of transformation with clear communication and purpose.