Building Trust: Whistleblowing Systems as a Core Element of a Speak Up Culture
In 2019, Pia Michel co-founded the company LegalTegrity with Dr. Thomas Altenbach and Maraja Fistanic. The company offers a digital whistleblowing system for medium-sized businesses. Previously, Ms. Michel worked as a consultant, gaining insight into numerous companies from the inside and experiencing the full spectrum of different corporate cultures, along with their advantages and disadvantages: from open cultures to cultures of fear. Based on her experience, she is convinced that whistleblowing systems are a relevant tool for promoting a speak-up culture within companies.
A “speak up” culture is a workplace environment in which employees feel safe and encouraged to openly express their thoughts, ideas, concerns, and potential problems without fear of negative consequences. It is an environment in which constructive feedback, dissenting opinions, and warnings are not only accepted but actively encouraged. This may include the following: * **Open communication:** Employees can voice concerns and participate in discussions without fear of retaliation. * **Psychological safety:** They feel safe enough to take risks, show vulnerability, and admit mistakes. * **Feedback:** Regular and constructive feedback is given and received by both managers and colleagues. * **Tolerance for mistakes:** Mistakes are viewed as learning opportunities, not as reasons for punishment. * **Inclusion:** The voices of all employees are heard and valued, regardless of their position. * **Ethical behavior:** Everyone is expected to adhere to ethical standards, and there are clear channels for reporting unethical behavior. * **Sustainability:** A “speak-up culture” often helps identify and resolve problems before they escalate, leading to a healthier and more productive work environment. A well-established “speak up” culture can significantly improve an organization's morale, innovation, problem-solving, and overall performance.
Could you explain to us at the beginning what is actually meant by "speak up culture"?
Pia Michel A speak-up culture refers to employees openly addressing sensitive topics, as well as ideas or suggestions. This is possible when they feel safe and do not have to fear any negative consequences. This subjective feeling is psychological safety referred to. The prerequisite for this feeling is trust in colleagues and superiors, as well as in the company as a whole. Ideally, this is even expressly desired and encouraged by the company.
Relevance of a Speak Up Culture for Companies
Ms Michel, why should companies concern themselves with the topic of a speak-up culture?
Pia Michel Trust builds up very slowly and can be destroyed very quickly. As a business consultant, I have experienced very few teams where real trust and a good speak-up culture existed. It mostly fails because of individuals with big egos who only pursue their own interests. Unfortunately, these people exist in almost every company.
The current labour market particularly offers highly qualified employees a wide choice: if they are not satisfied with the conditions at their current employer, they can quickly find a new job with a new employer. For this reason, some companies tend to avoid addressing uncomfortable topics and even tolerate unacceptable misconduct as a precaution. However, this quickly backfires.
There is no such thing as a „perfect“ speak-up culture throughout a company. I consider that an illusion. However, a company can contribute to fostering a Speak-up culture in a very diverse way. Speak Up Culture Continuously to Promote.
Companies benefit from such a culture of trust because...
- … they Thus to be informed early of relevant developments.
- … their Employeesn To think along and To contribute suggestions for improvement.
- ... their employees emotionally Attached to the company feel.
When a company lacks a "speak up" culture, it manifests in several ways: * **Fear of Retaliation:** Employees are afraid to raise concerns, report wrongdoing, or suggest improvements for fear of negative consequences, such as demotion, being ostracised, or losing their job. * **Lack of Transparency:** Important information is often withheld from employees, or decisions are made behind closed doors without consultation, leading to a sense of distrust. * **Unaddressed Issues:** Problems, misconduct, or inefficiencies are ignored or swept under the rug because no one feels safe or empowered to bring them to light. * **Low Morale and Engagement:** Employees feel undervalued and unheard, which can lead to disinterest, reduced productivity, and a general lack of commitment to the company's goals. * **High Turnover:** Talented and conscientious employees may leave the organisation because they can't tolerate the environment and seek workplaces where their voices are respected. * **Stifled Innovation:** Without the freedom to voice new ideas or challenge the status quo, innovation and creativity are severely hampered. * **"Groupthink":** Employees may conform to the prevailing opinions or decisions without critical evaluation, even if they have reservations, to avoid conflict or disapproval. * **Reporting to External Bodies:** When internal channels are perceived as ineffective or unsafe, employees might resort to reporting issues to regulatory bodies, the media, or legal authorities instead of within the organisation. * **Ethical Lapses:** A lack of a speak-up culture can create an environment where unethical behaviour goes unchecked, potentially leading to serious legal and reputational damage. * **Managers Aren't Challenged:** Leaders may operate without receiving constructive feedback or being held accountable for their actions, as no one dares to challenge them.
Pia Michel Without the subjective feeling of psychological safety, employees hold back from expressing opinions that do not align with the perceived prevailing view. In the worst-case scenario, a company develops a culture of fear with „yes-men“. In such a culture, employees primarily want to go unnoticed. There are no controversial discussions, employees reveal as little about themselves as possible and take no risks: Service according to regulations.
Gallup research shows that this attitude results in high absenteeism and low productivity. The current Gallup Engagement Index shows that every third employee in the past twelve months, towards his superior, at least once, even has not expressed serious concerns. Almost half of employees who are not emotionally attached (45 percent) did not even speak up.
Mrs Michel, could you give a concrete example?
Pia Michel Imagine the following scenario: You are a manager and notice that a lot of material is disappearing from the company. Too much. You negotiate with the works council to temporarily install a camera in one location and actually manage to catch the culprits. You discover that it's systematic theft. Then you have to realise that you were the only person who didn't know about it. All employees knew. But no one dared to say anything to you, because they didn't know how you would react. Sounds unrealistic? One of our customers experienced exactly this and was really frustrated.
Are companies aware of this connection?
Pia Michel Company culture is significantly shaped by the people who work there. As such, the company culture can even differ depending on the department and the people working there. Most entrepreneurs assume that everything runs smoothly within their company: the atmosphere is good, employees address everything openly, and they are not affected by legal violations.
When the Assessment of culture An interesting phenomenon emerges: whilst the Gallup studies do not primarily examine the topic of ‘speak-up’ culture, they do show very clearly that there are significant discrepancies in how this culture is perceived, depending on the group of respondents. For example, it is mathematically impossible for 69 % of employees to state that they have had a poor line manager at least once, whilst at the same time 97 % of line managers consider themselves to be good leaders. Consequently, it can be assumed that senior management generally has little objective insight into the culture that prevails within the company.
Introducing a Speak Up Culture in the Workplace
How can a business owner successfully establish a speak-up culture in their company?
Pia Michel Off at first glance Seems It's easy, a Speak To establish up culture. DIn reality, however, it looks different: Employees have different, sometimes conflicting goals and interests, it arise Dependencies and private matters are mixed with professional ones. Consequently employees tendentially Rather cautious as open. Trust cannot be prescribe. One Speak Up culture only develops when, when employees again and again Positive experiences do, for example: EEmployee wait to a fault in a process and power Suggestions for changes. Does the supervisor deal constructively with the proposal, regardless of its quality? dem Suggestion Um, will rate the experience positivelyt and generates one Feeling of safety. Critical topics., Also Offences against the law, such as theft or corruption, to address, requiredt a very high degree of perceived safety among employees and the conviction that an announcement no disadvantages brings with it.
Welche ersten Schritte empfehlen Sie zur Einführung einer "Speak Up"-Kultur?
Pia Michel In my experience, the basis of a functioning speak-up culture is the empowerment of everyone. Managers and their Awareness for the relevance of their behaviour. The risk of incorrect behaviour on critical topics ultimately increases not only for employees, but also for managers. Therefore, dealing with it must be learned. Training should, for example, equip managers to actively listen, express constructive criticism, but especially to be able to receive feedback and information on unpleasant topics professionally and appreciatively. These competencies contribute to employees experiencing their managers as trustworthy contact persons and as Role models perceive.
Another important point is the appointment neutral confidants within the company. These individuals can be approached by employees if they have problems with their supervisors or are unsure whether these supervisors will respond adequately to their concerns. Such trusted persons could be, for example, ombudspersons, members of the HR department, the works council, or a compliance officer.
Some people prefer not to engage in personal contact on very critical topics. In this case, a Whistleblowing system the ideal communication channel. Employees should be informed about the various communication channels offered and encouraged to use them when necessary.
What else is involved in the strategic introduction of a speak-up culture within a company? How can it be strengthened?
Pia Michel Um outtoto find out how Your own Employees who Companykcultural perception, Can you aAnonymous employee survey carry out. Builds trust when die Results in any event communicated, also if they Not so „rosy“ to fail, as in the Companies themselves would have wanted. On this basis, it is possible to in line with the company's situation a Strategy developed and a multidimensional Catalog of measures for implementation to be defined. Crucially,, that the company relevant messages About different communication channels again and again transported and experienced power. In my many years of consulting experience, I have found that most companies find it difficult, to accept, asThis is a/an Cultural change is a continuous process and not overnight can enter.
Whistleblower system and corporate culture
Ms Michel, you've highlighted whistleblower systems as a tool for a speak-up culture. Why are whistleblower systems so important?
Pia Michel A whistleblower system, particularly when it guarantees anonymity, is a low-threshold communication channel for very critical topics, such as statutory offenses. Employees should not have to struggle with whether a report might pose a personal or professional risk to them. The aim is to be able to submit a tip as quickly and easily as possible.
Breaches of law are a part of reality – in every company. Let's use concrete figures: statistically speaking, theft One in four employees, ...most of which even multiple times. And they are all supposed to be at other companies, but not yours?
Breaches of data protection, IT security, and quality guidelines, theft, price-fixing, and accepting advantages – the list is long. Employees notice such legal violations and perceive them as wrong, but they are very rarely addressed directly. However, through an anonymous whistleblower system, reporters could highlight these violations, without personal risk.
It's not just about the Whistleblower protection. Another important aspect, which is often neglected, is the Liability issue. If, as management, you cannot prove that you have taken all necessary steps to prevent legal violations, you will be personally liable in a serious case. In addition, there is an enormous loss of trust among customers and other stakeholders if such a violation ends up in the press and becomes a high-profile scandal. Accordingly, from a company perspective, it is more sensible to prevent problems rather than to rely on the assumption that „nothing will go wrong.“.
How should the introduction of whistleblower systems be implemented in the context of corporate culture?
Pia Michel It's not enough to „simply“ introduce a system. Successful implementation requires some consciously planned steps. It is recommended – if not already in place – to create a code of conduct that defines how employees should behave. I have seen some codes that were so complex and long they were certainly not read, let alone understood. Therefore, I recommend paying attention to the choice of words and design so that they As simply as possible formulated and reduced to a minimum.
For the successful implementation of a whistleblowing system, a strategy that takes into account the people involved and the timings is recommended.
- Who is involved, when, and how?
- By whom is the communication carried out?
- How, when, and how often does communication take place?
Based on our practical experience, we recommend stakeholders such as Works council and data protection officer to involve early on. On the one hand, this ensures that data protection requirements are fully taken into account, and on the other hand, it ensures acceptance from an early stage.
The topic of whistleblowing unfortunately generally suffers from a rather poor reputation, keyword „snitching“. This makes it all the more important to address and dispel these prejudices from the outset. This also includes communicating the introduction of a whistleblowing system to employees through as many channels as possible. This could include, for example, the notice board, the intranet, a communication from management, and addressing it in regular communications and directly when hiring new employees. Confidence-building measure It is important to explain how the whistleblowing system works, who receives the disclosures and what the process is when a disclosure is submitted through the system. To prevent general complaints about the system, the clearest possible demarcation is recommended:
- What feedback should employees provide about the system?
- What topics, for example, can be addressed via customer service or other complaint management tools?
What else should be taken into account to ensure a whistleblowing system has a positive impact on the speak-up culture?
Pia Michel The effect depends very heavily on how, in particular, the Management and the top management talks about the whistleblower system and whistleblowers. Awareness and training for these responsible individuals is therefore a prerequisite for a positive impact. I will give you two examples:
Under the EU Whistleblowing Directive, companies are required to acknowledge receipt of a report within 7 days. This can be done neutrally with a sentence such as „We hereby confirm receipt of your report.“ or with a positive connotation using the following wording: „Thank you for your report. We will investigate your report and would be grateful if you could log back into the system within the next 2 weeks. This will allow us to ask you further questions about your report if necessary.“
A good example of the Positive evaluation of whistleblower reports This happened a few years ago at an international automotive group, where significant inventory discrepancies were uncovered via a whistleblower. The whistleblower came forward during the investigation. The CFO of the affected division then criticised the whistleblower in front of all colleagues and urged his employees not to submit any further tips via the whistleblower system in future, but instead to address him directly about any issues. This stance did not align with the group's expectations of its leaders. As a consequence, they terminated the CFO's employment with immediate effect. This termination was upheld by the labour court. This quickly became known throughout the scandal-ridden company.
To positively influence a speak-up culture, staff must be able to trust that their report is truly anonymous. This is not a given, depending on the system. There is often a fear: won't there always be a clever IT person who can find out who the tip came from? I once worked for a company where employees were anonymously surveyed on certain topics using an app installed on their company mobile phones. It was stated that the app guaranteed anonymity. In retrospect, it turned out that the survey results could be filtered by age, department, and location. This had a significant impact on trust in the management's promises.
Advantages of digital solutions
You have particularly highlighted digital whistleblower systems. What advantages do digital whistleblower systems offer companies, and how do they strengthen the speak-up culture?
Pia Michel Many people first consider whether they can't simply cobble together a quick, straightforward solution as a whistleblowing system themselves. An email inbox, a phone number, or an internal ombudsman seem like obvious choices. The regulation that has been in effect since December 2021 EU Whistleblower Directive sets very clear requirements for Whistleblower protection and the related Privacy policy. Companies can meet these requirements most safely and easily with a digital solution.
Unlike home-knitted solutions, most digital solutions guarantee the reporting person complete anonymity. If it is a software-as-a-service solution that lies completely independently of the company's IT infrastructure in the cloud, this creates additional trust. It can be particularly advantageous for smaller companies to involve an external body (such as a law firm or ombudsman) as the recipient of tips. This signals to employees that their desire for anonymity is respected, that tips are taken seriously, and not swept under the rug.
Digital solutions are available from anywhere and at any time. Many employees prefer to submit their tips in the evening or at the weekend from home. That is, whenever they are undisturbed and feel safe or unobserved. They cannot be observed or interrupted by colleagues or superiors when submitting a tip. The System access This can be done via a QR code or a link, for example. Companies can also recommend that their employees use their private mobile phones for reporting.
Furthermore, the EU directive also mandates the possibility of telephone reporting. Here too, anonymity can be guaranteed if these reports are not handled by an internal department, but, for example, by the operator of the whistleblowing system and entered into the system. Naturally, the operator must comply with the data protection requirements and be able to prove this.
An unbeatable advantage of a digital whistleblower system is the ability to communicate with the whistleblower to communicate while maintaining anonymity. This greatly simplifies processing a referral, as the recipient of the referral can be asked follow-up questions. A digital system also simplifies legally compliant adherence to deadlines.
Die Nutzung eines digitalen Hinweisgebersystems sollte so simple and intuitive that neither the whistleblower nor the recipient of the disclosure requires training on its use.
My recommendations are cloud-based Whistleblowing solutions hosted in Germany: Hosting by a European cloud service provider, such as Telekom, ensures the maintenance of the highest IT security and data protection requirements. Some of these SaaS solutions require no IT implementation. They are resource-efficient and cost-effective, easy to use and always accessible. With these advantages, they are unbeatable compared to analogue solutions and contribute very positively to a speak-up culture.
Conclusion on the positive impact of whistleblowing systems on your company culture.
Mrs. Michel, could you summarise the key aspects of a speak-up culture for us again?
Pia Michel Employees deal with the company's processes day in and day out, and they know where improvements are needed. You have a speak-up culture in your company if...
- Employees to raise suggestions for improvement regarding weaknesses or ideas for further development and market adaptation, even at a very early stage.
- Seriously consider suggestions regardless of the proposer's position and constructively evaluate their relevance.
- You offer anonymous communication channels such as whistleblower systems.
With the latter, you can also considerably reduce the risk of damage from legal violations and scandals.
The interplay of these behaviours and measures can significantly accelerate your positive company development. A lived speak-up culture is an important signal to your employees that your company is interested in their opinions and ideas, while also valuing adherence to policies and laws. This will retain valuable and, above all, value-oriented employees within your company. If employees don't experience genuine interest, you will quickly lose them, or they will withdraw and become risk-averse „yes-men“. Therefore, I cannot stress enough the importance of employee appreciation within a company.
Find out in our Guide „Implementing the Whistleblower Protection Act in Your Company“ more on introducing a whistleblower system. If you still have questions, Contact You would like to have a personal conversation with one of our experts.
