Written Assignment

Ethics and Organizational Culture

March 26, 2010

Charles Harrington, Chairman and CEO, Parsons

A major league baseball team is playing its last regular season game of the year: win this game

and they advance to the play-offs; lose, and they watch the play-offs on TV. In the bottom of the

9th, one of its star players steps to the plate, the score tied, a man on first, no outs. The right

thing for him to do is to lay down a sacrifice bunt to move the runner into scoring position. This

player happens to have an incentive clause in his contract, however, that would be triggered if he

gets one more hit for the season, and that incentive clause would bring him a big bonus and a

contract extension. The player lays down the sacrifice bunt, and his team goes on to win the

game and advance to the post season.

After the game, a reporter who was aware of what was at stake for that star player in his last at-

bat asked the team’s manager how he convinced the player “to do what was right.” The manager

replied, “We try to create an atmosphere here where the question doesn’t even arise.”

I heard this true story from one of our executives, and I often use it when talking to our

employees about the way we “play the game” at Parsons. Our strong commitment to our six Core

Values – Safety, Quality, Integrity, Diversity, Innovation and Sustainability – governs everything

we do at Parsons. Our Core Values are the very beliefs that form the culture of our organization,

that make us who we are, that form the basis for all of our decisions. We strive hard to create an

atmosphere where the question of deviating from those Core Values, from doing what is right,

whether for perceived individual or corporate gain, never even gets raised.

Each of our Core Values has a goal, and for Integrity our goal is ZERO deviations from our

Corporate Ethics Policy. We have performance metrics that we have developed to track

composite leading and lagging indicators of our performance against this goal and to report to

management, and to our Board of Directors, on our progress on a quarterly basis.

To achieve this goal requires constant communication. All new employees receive training in

Parsons’ Ethics Policy, including watching a video from me discussing the importance of a

commitment to ethics for our company, our employees, our customers and our suppliers. All

employees are required to be re-trained in our Ethics Policy on a regular basis, and our

employees participate in Ethics Challenges on our internal website several times a year.

Additionally, each of our quarterly Executive Committee meetings addresses an Ethics/Integrity

Moment.

A company should seek constant improvement in the way it conducts business, and commitment

to integrity is no exception. We are always looking for ways to improve our ethics program, both

in terms of the message itself and the way we communicate that message. As an example, in the

past Parsons issued periodic Ethics Bulletins to employees, highlighting particular ethics issues

in each Bulletin, but that was a static communication. Over the past year, we have instituted

Ethics Challenges on our internal website, describing a certain fact scenario in which our

employees could well find themselves, and asking our employees to vote and comment on how

the person in the Challenge should respond. We then compile the responses and publish them on

our internal website, along with a sampling of the comments submitted and with an analysis from

our Ethics Committee.

We’ve gone from a static communication to an interactive dialog, and we’ve had tremendous

responses, both in terms of the number of people who participate and in the depth of the

comments we’ve received. Most importantly, it has our employees talking and debating about

ethics, and that’s really what any company hopes to achieve.

In the short term, a corporation’s commitment to integrity may cost it a project, or result in an

individual employee, or the corporation, missing certain financial targets. Parsons has in the past

walked away from potential projects or teaming partners when questionable ethics issues have

surfaced, and we will continue to do so in the future. The end results of such short-term losses,

however, are virtually always long-term gains: gains in reputation as a company that doesn’t cut

ethical corners; gains in attracting employees who already have their own personal commitment

to integrity and want to work for a company which is similarly committed; and gains in attracting

the right kind of suppliers, subcontractors and teaming partners with

whom to work.

In my baseball example at the beginning of this article, the star player did “what was right,” laid

down a sacrifice bunt, and the team won the game and went to the play-offs. But suppose,

despite the bunt, the team had gone on to lose the game? In my mind, laying down the bunt,

playing the game the right way, was still the right thing to do. And conducting our business with

integrity in everything we do, playing the game “the right way” even if it means losing a

potential project or customer or partner, is always the right way to play the game.