I was on my way to a meeting in another building at Darden. Several colleagues and I were carrying stuff in our arms. Going down stairs outside, I saw a cigar of truly Churchillian proportions stubbed and flattened on one of the steps. The rain overnight had softened it into near mush. In our haste to get to our meeting, all of us hustled around the flattened stogie. Later, we returned from the meeting, arms empty, when we saw the gross item once more. Again, my colleagues gingerly stepped around it. I bent over and picked it up. My pals objected (“leave it for the cleaning crew!”) or joked (“That’s what a Dean does—clean up after others!”) or offered to take it off my hands. But I walked onward several steps and threw it into the trash can. Why?

Through little actions we set a tone for an organization. Think of the ways in which we signal social norms. Conventional thinking is that norms are signaled by some authority or a policies manual: do this, don’t do that.

But norms can be signaled in less obvious ways. Consider the “broken windows” theory of James Q. Wilson and George L. Keiling. They argued that norms of neglect tend to compound:

“Consider a building with a few broken windows. If the windows are not repaired, the tendency is for vandals to break a few more windows. Eventually, they may even break into the building, and if it’s unoccupied, perhaps become squatters or light fires inside. Or consider a sidewalk. Some litter accumulates. Soon, more litter accumulates. Eventually, people even start leaving bags of trash from take-out restaurants there or breaking into cars.”

The authors argued that breaking the cycle of neglect prevents problems from escalating. An orderly environment signals that someone is paying attention—and it encourages others to do so as well. Based on this research, Rudolph Giuliani, the Mayor of New York City in the 1990s, prodded landlords to repair their properties and put more cops on the street in blighted areas. Scholars debate whether the subsequent drop in crime was due to the improvement in appearances, or more police, the combined effect was a greater show of presence. The community knew that the Mayor wouldn’t tolerate disorder. A norm gives a rule of thumb about how others should behave.

The world of business offers numerous examples about the power of norms and culture as drivers of performance. For instance, companies like Johnson & Johnson and Southwest Airlines show that values and norms help to create extraordinary value for customers, suppliers, employees, and stockholders.

Business also offers examples of the other kind. For instance, last year, Oswald Grubel resigned as CEO of UBS, one of the world’s largest financial institutions. His resignation was associated with an apparent breakdown in risk management that allowed a 31-year old trader to amass $2.6 billion in losses on unauthorized trades. Journalist James Stewart argued that the problem wasn’t inadequate risk management systems, but rather, a “rogue culture.” He quoted one UBS employee as saying, “The problem is that there wasn’t any culture. There are silos. Everyone is separate. People cut their own deals, and it’s every man for himself. A lot of people made a lot of money that way, and it fueled jealousies and efforts to get ever better deals. People thought of themselves first, and then maybe the bank, if they thought about it at all.” This reminds one of similar episodes at Societe Generale (2008), Barings Bank (1995), and a host of others. And observers attributed the mother of all corporate collapses, Enron Corporation (2001), to a rogue culture.

How do traders and cultures go “rogue”? Given legal liability and obvious embarrassment, the public may never learn the truth in these cases. Sure, crooks and con artists can rise to the top of corporations. But it seems more reasonable to assume that the directors and CEOs of these organizations did not start out intending to spawn rogue traders or a rogue culture. After the fact, many of the rogues express deep remorse. Kweku Adoboli, the UBS trader, said through his lawyer that he was “sorry beyond words for what has happened here. He went to UBS and told them what he had done and stands appalled at the scale of the consequences of his disastrous miscalculations.” My reading of the various rogue cases is that at first things started to go bad slowly, and then very fast. What interests me is the “slowly” part, when leaders and co-workers might have intervened to prevent the eventual disaster. Why didn’t they?

An excellent book co-edited by my colleague, Ed Hess, and Kim Cameron, Leading with Values: Positivity, Virtue, and High Performance contains a range of essays that illuminate the challenge of creating great cultures. The best organizations are not “anything goes” kinds of places. They promote and police clear standards. My colleague, Jim Clawson, says that what we tolerate tends to be what we teach.

This past spring, Darden adopted a set of professional norms that commit us all as follows:

Darden aspires to provide everyone in our community a world-class experience built on principles of “collaborative excellence.” To that end, we announce and endorse the following principles of behavior within our community:

  • We the members of the Darden Community, across our many roles, treat everyone with courtesy and respect.
  • We act with integrity: we do what we say.
  • We communicate with positive intent and appreciation for what others have contributed to our results.
  • We treat everyone with fairness.
  • We have a joint responsibility to bring suspected incidents of misconduct forward.

Every day, we all face a variety of “flattened stogies:” behavior or conditions in the environment that do not reflect our aspirations for the community in which we live. The strength of our community depends on how we respond. Neglect is not the answer. Gandhi said, “you must live the world you want to see.”

A leader sets a tone for the community. Through small acts such as picking up trash one signals what is important. Do I pick up trash because I’m the Dean? Or am I the Dean because I pick up trash? Think about it.