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Meanwhile over at MCI

March 1, 2004
Related Topics: Ethics, Featured Article, HR & Business Administration

Nancy Higgins, the new chief ethics officer at the telecom company formerly known as WorldCom, was ready to deal with horrors from the recent past when she started work last October. Instead, she spent much of her time reading love notes. On her first day at MCI, CEO Michael Capellas sent a note to all employees announcing her appointment and listing her credentials. "And I got e-mail messages from 20 different employees at all different parts of the company saying, ‘Oh, we’re so glad you’re here. We really need this.’ "

    Subsequent weeks brought hundreds of urgent inquiries, most from employees who were in effect turning themselves in. "They said, ‘I just did X,’" says Terry Thomas, former chief ethics officer for the city of Seattle, whom Higgins brought in as her top lieutenant. " ‘Was that the right thing to do? I’m concerned about my behavior in this situation being the best it can possibly be.’ And so on and so on."

    For shell-shocked employees, the good-humored Higgins is less a law enforcement officer than a heartening symbol of MCI’s potential revival. She is not only a vital member of the team of top executives trying to nurse a once-strong company back to health, she represents much of what was missing at WorldCom. For everyone working at a company struggling to emerge from bankruptcy, she is a light at the end of a very dark tunnel. The 52-year-old executive vice president, an alumna of Boeing and Lockheed Martin and one of the most respected and experienced ethics officers in corporate America, is happy to fill that feel-good role.

    During the six-and-a-half-year reign of exiled WorldCom CEO Bernard Ebbers, whose company gobbled up MCI in 1997, top management was too busy cooking up ill-considered financial maneuvers to pay much attention to the people actually keeping the phone calls and data flowing. Now that Capellas has changed its name back, longtime MCI employees call the WorldCom era "The Occupation" or "the time the company was abducted by aliens."

    After WorldCom declared bankruptcy as a consequence of an $11 billion accounting scandal allegedly masterminded by Ebbers and his CFO Scott Sullivan, the General Services Administration prohibited the company, which currently conducts $400 billion worth of business with the federal government, from competing for new contracts. Higgins’s hiring by Capellas was a vital factor in the U.S. government’s decision to remove the freeze in January. "If it weren’t for the fact that Capellas commissioned a world-class ethics program, the company wouldn’t have had a chance," says Jeff Kagan, an independent telecommunications industry analyst in Atlanta.

    Before her arrival at the 55,000-employee firm, Capellas had already done what she would no doubt have recommended. "In some ways I feel guilty," Higgins says a bit sheepishly. He forced out the entire front office and board of directors, instituted a company-wide code of ethics, which includes setting up an anonymous ethics hotline and establishing the corporate-governance program, and scheduled a one-day ethics course given to all MCI employees by professors from New York University and the University of Virginia. All of these functions are now Higgins’s responsibility.

    In this post-apocalyptic environment, Higgins has also concentrated her efforts on highly visible actions such as printing up ID badges and posters emblazoned with MCI’s Guiding Principles--"Build Trust and Credibility," "Uphold the Law" and "Be Loyal," for example--and posting ethics-oriented quotations from Chairman Capellas such as "Do the right thing. Because it’s the right thing to do." Some outside observers might consider this corny, unsophisticated or even insulting, but Linda Treviño, director of the Shoemaker Program in Business Ethics at Penn State University, sees it differently. "People welcome this kind of thing. I suspect that at a place like MCI that’s been through what it’s been through, it’s almost a cleansing. They want to feel good about themselves. Now they can puff up and say, ‘Only the good guys are left.’"

    If that’s not quite the case, Treviño adds, Higgins is well equipped to handle it. A self-described "recovering lawyer," Higgins left Boeing’s legal department in 1994 to head the aerospace giant’s company-wide ethics and business conduct program, which she had helped to create during the previous two years. In 2000, partly so that her son could attend Gallaudet University, an institution that serves the needs of deaf students, she moved to the Washington, D.C., area, where she served as vice president of ethics and business conduct at Lockheed Martin. She supervised the company’s compliance with Sarbanes-Oxley. Brian Sears, Lockheed Martin's director of ethics awareness created the annual Ethics Film Festival.

    Higgins plans on cloning the do-it-yourself filmfest at MCI, as well as redesigning the company’s ethics course to include case studies of ethical gray areas that employees encounter daily. And although she doesn’t bring it up until prompted, she’s in charge of advising management on disciplinary matters. "We’re here to make sure the appropriate action is taken," she says in a serious tone. "That’s my ultimate power and responsibility."

Workforce Management, March 2004, pp. 32-33 -- Subscribe Now!

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