Values Do Not Govern Organizations. Systems Do.
- Karlene A. Millwood, MBA
- Aug 10
- 8 min read
Updated: Aug 12
A PRISM™ examination of what happens when ethical leadership exposes the system beneath the culture
Leadership Insight Series | Part One of Three
A few years ago, I became a fan of the television series New Amsterdam. Its lead physician, Dr. Max Goodwin, was known for asking one disarmingly simple question:
How can I help?
The question resonated with me because it reflected how I approached leadership. Whether I was teaching, consulting or leading a project, I began with curiosity. I wanted to understand what people needed, what stood in their way and what conditions would help them do their best work.
So, while leading a strategy-execution initiative inside a large organization, I began walking through the office each afternoon to check in with my team of approximately eight people.
I was not monitoring their performance. I was not micromanaging. I simply wanted to know:
How are things going?
Do you have what you need to do your job well?
Are there obstacles I can help remove?
I expected conversation.
Instead, I encountered suspicion.
People were guarded. Their answers were careful. Routine exchanges carried a tension that seemed disproportionate to the questions being asked.
Then, one afternoon, I invited an experienced team member into my office for a status update. As she answered basic questions about her work, she became visibly anxious and defensive.
I was not criticizing her.
I was not interrogating her.
I was simply asking questions.
And I remember wondering: What has happened in this environment that a capable professional experiences an ordinary conversation with a leader as a threat?
That was the first clue. The organization had policies, procedures, reporting structures and stated values. What it did not have was a system employees trusted.
The Trust Leaders Believe They Have
At our next team meeting, I addressed what I had observed.
“I don’t think of myself as your superior,” I told them. “I have never liked that term in an organizational context. To be superior suggests that someone else must be inferior. I see myself as a team member with a different level of responsibility. We are all working toward the same goal.”
The room became very quiet.
Then the same woman spoke.
“I’ve never had a manager ask about my well-being before.”
Heads nodded around the table.
Her response revealed more than an individual experience. It exposed a gap between how leadership may have perceived the workplace and how employees were actually experiencing it. That gap is not unusual.
PwC’s 2024 Trust in US Business Survey found that 86% of executives said they highly trusted their employees, while only 60% of employees felt highly trusted.
A twenty-six-point perception gap is not a communication inconvenience. It is a governance warning. When leaders assume trust exists, they interpret silence as agreement. Employees may be making an entirely different calculation:
Is it safe to speak?
Will honesty be used against me?
Is anything likely to change?
Trust cannot be measured solely by leadership intention. It must be examined through employee experience and organizational response.
What Silence Was Costing the Organization
Once people believed they could speak honestly, the operational picture changed.
They were unclear about strategy, processes, roles and responsibilities. Teams were not communicating effectively. Strained relationships among leaders were spilling into the work. Managers were spending their days putting out fires instead of addressing root problems. Accountability was inconsistent.
The organization did not lack talent. It lacked the conditions that allowed talented people to contribute fully. This distinction matters.
Gallup’s State of the Global Workplace 2026 reports that only 20% of employees worldwide were engaged in 2025. Gallup estimates that low engagement cost the global economy approximately US$10 trillion in lost productivity, about 9% of global GDP.
Figures of that scale can feel abstract. Inside an organization, disengagement looks much more ordinary:
The employee who knows where the process is breaking but decides not to say anything.
The manager who keeps compensating for a structural problem rather than challenging it.
The teams solving the same problem separately because information is not moving across boundaries.
The leader who mistakes compliance for commitment.
By the time disengagement appears in a survey, exit interview or performance report, the organization may have been absorbing its cost for years.
The Meeting That Changed the Work
I began visiting other teams, introducing myself, listening and observing. What I found confirmed that the strain was not confined to one group. The system itself needed attention.
I proposed bringing multiple teams and leaders into one room. Some colleagues agreed. Others were skeptical. I scheduled the meeting.
At the beginning, I made a clear promise: people could speak candidly, and nothing shared in that room would later be weaponized against them. If retaliation followed, they were to come directly to me. I was making leadership accountable for the conditions of the conversation.
Then I asked four questions:
How well do you understand our operational processes?
How clearly do you understand your role within the structure?
What is working—and what is not?
Where are breakdowns affecting your work, your team or the organization?
People spoke.
Teams discovered they had been solving the same problems separately. Employees began to understand how their work connected across the organization. Leaders heard what stalled reports and carefully managed conversations had concealed.
A colleague with more than twenty years in the organization said, “Never in my career here have we had a meeting like this. It was needed.”
Then, shortly after the meeting, a director knocked on my office door.
“Karlene, I resigned a few weeks ago,” he told me. “I couldn’t take the toxicity anymore. After today’s meeting, I’m rescinding my resignation. For the first time, I feel understood.”
I had not known he had resigned.
One meeting did not repair the entire organization, but it demonstrated how quickly behaviour can change when people experience clarity, dignity and credible protection.
Communication improved.
Leaders who had rarely interacted began sharing information.
Teams understood their interdependencies.
A critical operational process was revamped, and the strategy-execution initiative gained momentum.
The results confirmed the problem was never a shortage of capable people.
The system had been suppressing their capacity.
Then Progress Disturbed the Power Structure
Not everyone welcomed what the meeting revealed. One leader was deeply displeased that it had taken place without their involvement. Yet their involvement had repeatedly created a decision bottleneck. Progress required action, and the intervention was producing results. Shortly afterwards, my contract was terminated.
The explanation was that my work was not up to standard. I asked for examples. None were provided. There had been no performance appraisal documenting concerns. Even HR appeared surprised. What followed was a lengthy process that eventually resolved itself. The contradiction was difficult to ignore:
The work improved.
People re-engaged.
A valued leader withdrew his resignation.
A stalled initiative moved forward.
And the person who helped create those outcomes was removed.
This is the moment at which an organization’s ethics become visible, not when values are announced, but when those values become inconvenient to existing authority.
The risk is not limited to formal whistle-blowing. Yet the wider evidence about speaking up is instructive. EY’s 2024 Global Integrity Report found that 17% of employees who reported wrongdoing experienced retaliation.
Organizations may tell people to speak candidly while simultaneously teaching them—through what they reward, ignore or punish—that candour carries a cost.
What PRISM™ Reveals
PRISM™ treats ethics as organizational infrastructure: the interconnected conditions through which purpose, authority, inclusion, integrity, leadership discipline and accountability shape daily conduct.
Viewed through that lens, my experience was not simply a conflict between two leadership styles. It revealed five structural questions.
1. Purpose & Ethics: What was leadership there to serve?
If the purpose of leadership was to enable people and strategy to succeed, the meeting advanced that purpose. If the operating priority was to preserve hierarchy and control, the meeting disrupted it. The organization’s response revealed which purpose held greater power.
2. Regeneration & Principled Inclusion: Whose knowledge was allowed to shape the work?
Employees closest to the processes possessed information the organization needed. Yet fear and fragmentation had kept that knowledge from influencing decisions.
Inclusion becomes operationally meaningful when people can affect the systems in which they work—not merely attend meetings inside them.
3. Integrity & Sustainability: Could the organization support its claims with evidence?
The stated reason for my termination was poor performance. There was no appraisal, documentation or specific example to support the claim.
Integrity requires consistency between assertion, evidence and action. Without that discipline, authority can convert preference into an organizational verdict.
4. Strategic Self-Mastery: Could leaders tolerate clarity they did not control?
Leadership is tested when useful information challenges status, habits or authority. Self-mastery allows a leader to examine the truth without treating exposure as insubordination. Without it, control becomes a substitute for stewardship.
5. Mindfulness & Accountability: What happened after the system was exposed?
The organization had an opportunity to examine why employees were guarded, why decisions stalled, why teams were fragmented and why a director had reached the point of resignation. Instead, attention shifted towards the person who had made those conditions harder to ignore. Accountability fails when organizations punish the signal while preserving the source of the problem.
Ethics Is Not What an Organization Says
That experience left me with three enduring lessons:
Leadership that creates clarity often exposes problems others have learned to tolerate.
Leadership that encourages truth can feel threatening where silence has become normal.
Leadership that puts people first will sometimes challenge systems organized around control.
The most revealing question is therefore not, “What are our values?”
It is: What does our system teach people will happen when they live them?
Do leaders welcome information that complicates the prevailing narrative?
Are performance claims supported by evidence?
Can employees challenge a failing process without becoming the problem?
Does authority serve organizational purpose, or protect itself from scrutiny?
Values may describe what an organization admires.
Systems determine what the organization permits.
That is why ethics cannot remain a statement, annual training exercise or compliance obligation. It must be built into decision rights, information flow, performance management, leadership conduct, protection from retaliation and the consequences attached to behaviour.
Ethics is not an initiative. It is infrastructure.
And when that infrastructure is weak, talented people learn to protect themselves before they contribute fully. Strategy slows. Trust erodes. Leaders leave. Eventually, customers and stakeholders experience what employees have known for years.
The values on the wall matter far less than the values embedded in the workflow.
Continue the Leadership Insight Series
This is the first in a three-part Leadership Insight Series examining the same organizational experience through KMI’s three proprietary frameworks.
Part Two — The IMPACT™ Lens: The Initiative Was Not Stalled by Strategy. It Was Stalled by the System. We will examine why execution improved when roles, information and interdependencies became clear—and why those gains could not be separated from the operating conditions surrounding them.
Part Three — The EMERGE™ Lens: When Leadership Capability Exceeds the System’s Willingness to Recognize It. We will explore what happens when a high-capacity woman demonstrates the courage, judgment and influence an organization claims to value—but her leadership disrupts patterns the system has learned to protect.
Look out for Parts Two and Three as we continue to look beneath the visible events and examine the systems shaping leadership, execution and advancement.
A KMI Strategic Diagnostic examines leadership, governance, culture and execution as an integrated system—identifying the organizational conditions affecting trust, accountability and performance.
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