Can One Employee Take Your Company Down?

Your company is doing great work. It is creating jobs where they didn't exist before... you are contributing to the betterment of society... have you considered whether or not one employee could bring that all to a screeching halt?

Since February of 2017, with the recording of Travis Kalanick's (former CEO of Uber) poor behavior as he berated an Uber driver, displayed all across America, there have been frequent episodes of bad behavior demonstrated by numerous corporate leaders. In just the last month we've seen:

• Adam Neumann, the CEO of WeWork was forced to step down after the filing of the company's pre-IPO paperwork shone a light on suspect financial dealings which ultimately benefitted Mr. Neumann to the tune of millions of dollars. The IPO was withdrawn, the company has laid off over 4000 employees, and its estimated value dropped 40 billion in the blink of an eye. See more here.

• The Houston Astros baseball team fired their assistant General Manager for verbally attacking 3 female reporters after a pennant win in October. In addition to a social media onslaught faulting the organization and how it handled the incident (initially accusing one reporter of fabricating the incident and then taking 3 days to admit to it and holding the AGM accountable), the team will be fined by Major League Baseball, and the way that the incident was handled is now inviting scrutiny of the company's culture, which will result in further public relations embarrassment and could see the departure of many others in leadership positions in the organization. This incident, and the stress it caused the whole organization, may have just cost the team the 2019 World Series. See more here.

• The CEO of McDonald's resigned this past week, saying this: "Given the values of the company, I agree with the board that it is time for me to move on." The values of the company? The values, that as CEO, he was most-responsible for upholding? See more here.

Now, you might argue that these are people in positions of power and it is often the case that with power comes the belief that you are above "following the rules." But a leader is also responsible for the "unwritten rule" that he or she sets the acceptable behaviors and culture of an organization through their example.

When Does It Start?

We cannot assume that only those in the "higher echelon" are behaving badly (and costing their companies money as well as reputation). Think of the myriad of "little" ethical violations that occur in companies daily: taking home office supplies, failing to report a breakdown in product or process because "it's not my job," refusing to cooperate with another department or colleague, giving a customer favorable terms over other customers, the list could go on and on. At what point does a "little" ethical violation bloom into something that is egregious and damaging to your company financially or reputationally?

These types of incidents are precisely the reason why The Training Doctor created its Leadership From Day One development approach. By developing leadership behaviors such as ethics, decision making, and self-management early in one's career, incidents like these should not occur down the line. If all of your employees are immersed in a culture that supports the good of all (the company, its employees and customers), you'll make a bigger impact on the world and sleep better at night.

Are you at risk?

As a business owner, do you presume that your employees are behaving ethically? Do you know your organization's culpability from actions committed by your employees? Especially your senior/leader employees who have more of a "platform" to do harm to the company?

It is never, never too soon to start developing leadership characteristics in your workforce. Don't wait until you've already promoted someone to a leadership role to start to foster the skills they need to lead themselves as well as others; it is harder to rewire behavior than it is to develop it from the start. When you start leadership development early in your employee's careers, it becomes an ingrained and reflexive behavior as they move up through the ranks.

Go to our contact us page if you'd like help establishing a leadership development program that starts with everybody. Today.

Case Study: Wells Fargo - how long can you ignore ethics?

Here are some "interesting" facts as a result of Wells Fargo's abuse of customers:

• Fake accounts: 2 million +

• Fines: $185 Million

• Fired: 5300 managers

• Resigned: Two CEO's, John Stumpf and his successor Tim Sloan

• Legal fees: $40 – $50 million per quarter (gosh, if you only gave us that money for professional development - oh the places we could go!)

• Branch closings: 400 by 2019

So many questions! If you use this case study in a discussion with your leadership tip you'll contemplate questions such as:

Was it fair that 5000+ low-level managers were fired or should only the senior executives have been held accountable?

Warning signs – such as customers failing to fund the accounts they “recently opened” – were evident but ignored. What kinds of early warning systems are in place in your organization? How are they monitored?

You can access the complete case study - suitable for printing, here.

Mea Culpa - Is it really better to ask for forgiveness?

The number of “apology ads” I’ve seen on TV in the last month is astounding. It’s caused me to wonder – as a company, is it really better to ask for forgiveness from your customers than to do the right thing, or behave the right way, to begin with? Is the message we are learning “do your own thing, until you get caught, and then apologize and carry on as usual?”

Wells Fargo is apologizing for violating our trust by opening over 2 million fake accounts in order to hit their sales goals. One of their ads (seen here)   begins by saying “We know the value of trust…” later in the commercial they promise they are “holding ourselves accountable to find and fix issues proactively…” Finally, they declare that they are halting the business process (sales goals for branches) that caused the bad-behavior in the first place.

Facebook apologized for unknowingly allowing the personal information of tens of millions of users to be leaked and/or manipulated by advertising; possibly impacting the 2016 US elections. In their apology ads the company says it will do “more” to make you feel safe and protect your privacy.”

In Uber’s apology ad, the new CEO, Dara Khosrowshahi , looks straight in to the camera and says “we have new leadership and a new culture.” He states that as a company, “one of our values is to always do the right thing.” Is that a new thing, which started with you, Dara? Or was that always in place but now you’ll take it seriously?

Apologies that Miss the Mark

Wells Fargo stating it has ended the business process that caused the “problem” is simply addressing the symptom – what is the root cause of an organization that is unethical, views cheating as necessary to maintain one’s job, and has little regard for its customers?

In the case of Facebook and Uber, their ads don’t even really claim responsibility; they simply say “Oops, something went south. We’ll fix it.” And Uber’s “responsible CEO” made no appearance at all – they sent out the new guy to apologize for past transgressions.

Here’s Rolling Stone’s take on the limp apologies:

Hi, America. We were awesome for a long time. Here are some culturally representative shots of people like you smiling and enjoying our services. After repeated denials, we recently had to admit to violating your trust, but the unelucidated bad thing doesn’t have to come between us. We promise: we fixed [all] that. You will now wake up feeling refreshed in 3,2,1…

The Burning Question

What role did leadership play in creating these damages in the first place? And what role could leadership development play to get these companies back on track? Teaching individuals to be better leaders after the fact is not the best approach; what about the future leaders of these companies? When does their development begin? And more broadly, of course, the future leaders of any company, because a scandal or business transgression could indeed happen to any company.

Go Forward

A multi-faceted leadership development curriculum – offered over the long-term, to everyone in the organization – would benefit from a groundswell of workers who understand ethics, risk, team work, communication, self-management and more. If companies are not solely reliant on leaders to set the course, then everyone is a leader. That’s what we need going forward.

Ethics, Leadership, Volkswagen - case study

Periodically, The Training Doctor releases case studies used in our Teaching Thinking Curriculum.Since we want everyone to improve their thinking skills - not just those who are enabled to do so through their employer-sponsored training - we offer these case studies for use in your personal development, corporate or higher ed classrooms.

In the Volkswagen case study, you'll be able to discuss and dissect concepts around:

• Ethics

• Leadership

• Decision making

• Stakeholders

In September of 2015, the United States Environmental Protection Agency (EPA) accused the automaker of installing engine control unit (ECU) software in its diesel cars (beginning in 2008). The software worked as a "defeat device," allowing VW models to avoid violating the Clean Air Act by sensing when the cars were being subject to emissions testing, enabling emissions controls, and thereby enabling VW brand cars to pass inspection.

However, during normal driving conditions, emission control software was shut off in order to attain greater fuel economy and additional power, resulting in as much as 40 times more pollution than allowed by law. Eventually, VW admitted that the sensing device was installed in approximately 11 million vehicles in both the US and Canada.

Learn more here and develop your thinking skills by using the discussion questions posed at the end of the case study.

Update:  March 2019.  VW has been charged by the Securities and Exchange Commission (SEC) with securities fraud to the tune of $13 billion.