Frustrated Board and Shareholders Put Cash Flows Before Bros -- Finally!

Activist board members and shareholders can be a last line of defense when a CEO is bullying his entire company, which is why Uber CEO Travis Kalanick resigned today.  According to reports, investors demanded that he step down, in what New York Times reporter Mike Isaac described as an “outright rebellion.”

Some news sources were more cynical about the departure. The tech news site Pando said that Silicon Valley puts “cash flows before bros,” but whatever you believe, it’s about time. I’ve been calling for Kalanick’s resignation for months as this textbook case of a Silicon Valley “bro” who mismanaged the company he founded and allowed the regular abuse of his employees has dominated business headlines. It’s amazing how motivated people can be to stop abuse when their investment is at risk.

According to Adrienne LaFrance at the Atlantic, “It was ultimately concerns over the bottom line—not merely the toxic culture, or Kalanick’s trademark hubris, or explosive allegations of sexual harassment, or revelations about Uber’s secret software to evade of law enforcement—that forced Kalanick out. Well, out of his job as CEO, that is. He’ll still be on Uber’s board of directors, and he will retain his control of a majority of Uber’s voting shares.”

This doesn’t sit well with Benjamin Edelman at Harvard Business Review. He sees Uber’s troubles as deep and systemic: “I suggest that the problem at Uber goes beyond a culture created by toxic leadership. The company’s cultural dysfunction, it seems to me, stems from the very nature of the company’s competitive advantage: Uber’s business model is predicated on lawbreaking. And having grown through intentional illegality, Uber can’t easily pivot toward following the rules.” For this reason, Edelman is calling for regulators to shut down the company.

I’ve discussed all of these issues at length in my book, From Bully to Bull’s-Eye: Move Your Organization Out of the Line of Fire, and dedicated the entire first third of the book to the critical question—“Is Your Workplace Culture a Ticking Time Bomb?” The bottom line is that Uber was a ticking time bomb, but shareholders finally got it right. Investors and boards have a responsibility to employees to be responsible for a psychologically healthy, safe and fair workplace. I’m glad to see that they’ve stepped up at last. Maybe now we can have a news cycle without Uber dominating the business headlines.

Illustration credit: Jack Ohman/Sacramento Bee

When Workers Sign Non-Compete Agreements, No One Benefits

On the surface, it seems like common sense: keep your employees from taking what you’ve taught them and bringing it to your competition by making them sign non-compete agreements. Logical, right?

Not so fast.

Every analysis of this burgeoning practice is showing that not only is this a terrible thing to inflict on workers—who are ensnared in a kind of servitude where they must stay with a bad job or risk leaving their profession entirely—but it destroys innovation, economic growth and entrepreneurship.

Employment and labor law Professor Orly Lobel of the University of San Diego School of Law wrote in today’s New York Times just what non-compete clauses really mean to the burgeoning ranks of the 30 million employees who have signed them. According to Lobel, instead of just requiring non-competes from the top echelon of employees, now one in six workers without a college degree are also forced to sign them. “By including them in employee contracts, employers can use the threat of litigation to constrict wages and employee mobility,” she says.

The effect this has on the workplace can’t be underestimated. Psychologically healthy, safe and fair workplaces don’t shackle employees’ ability to freely leave their jobs for better wages and benefits, to advance a career, or to accrue working capital. Parents are especially penalized when they can’t move to a state that doesn’t enforce non-competes because of the need to live near family, their children’s education or their spouse’s employment.

For the clearest proof as to how non-competes hurt industry, Sobel cites the example of California and Massachusetts, both of which benefited from an early boom in high-technology. California, which does not enforce non-competes, is now a thriving hub of tech innovation. Massachusetts on the other hand, which enforces them, had its tech boom die out. If employees wanted to stay in the industry they had to leave the state—much to the state’s detriment.

In From Bully to Bull’s-Eye: Move Your Organization Out of the Line of Fire I discuss how psychologically healthy, safe and fair workplaces are fertile breeding grounds for creativity, innovation and productivity. If you want the exact opposite of all these things, introduce a non-compete agreement. But beware. The employee you exploit the most may wind up being yourself.

Photo credit: BIGSTOCK

Some Companies Forget the Employees are also Customers

It has always amazed me how tone deaf some leaders of organizations are about the obvious. While this article in the Wall Street Journal deals with job seekers as customers, the more important question is do they consider employees as customers? According to Gallop polling, only 30 percent of employees are engaged—so it is safe to assume that the 70 percent don't speak well of their employer.

In my many years in retail I made it a point as a senior executive to treat every employee the way I wanted them to treat customers. Doing so engages employees as ambassadors for the company and your brand and helps create a psychologically healthy, safe and fair workplace. You need to look no further than the recent fiascoes with United Airlines to know how forgetting to treat employees like customers impacts your brand and reputation. On the other hand, a positive work culture creates an outreach and representation by employees that is more valuable than any other form of promotion.

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If United Treats Their Passengers This Way, How are They Treating Employees?

United Airlines has a lot to learn about customer service. They have long been under scrutiny—a 2016 report in BloombergBusinessweek stated that United received 43 percent of all customer complaints filed against U.S. airlines and finished last among the non-discount airlines in the 2015 JD Power & Associates satisfaction survey.  In October 2016 their failure to provide a wheelchair for a man with cerebral palsy resulted in the passenger having to crawl off the plane.

This week they added physical assault to the list of offenses when security was called to yank a Kentucky doctor off the plane after he refused to give up his seat to an airline employee. The video of the doctor being physically dragged and bloodied has gone viral around the world and created a public relations nightmare for the company. The doctor, who just wanted to return home with his wife from Chicago, was left with a broken nose, concussion and two missing teeth. He is suing the airline, which shouldn’t be allowed to treat anyone this way.

I spent a large portion of my career in the retail sector and as a senior executive always advocated a customer-centric approach. Our goal was to have every point of contact with our customers to be a pleasant and positive experience. The best way to achieve this was to treat our employees the way we wanted them to treat customers.

I have no idea why this simple rule of retail has been forgotten by United, but as Helaine Olen discusses in the New York Times, the airline isn’t alone. The trend of treating middle-class customers shabbily while catering to the 1 percent has been increasing in recent years. But the situation at United goes far beyond the consumer. My experience and research has shown a company like United that mistreat customers also abuses employees. Psychologically healthy, safe and fair workplaces don’t encourage workers to have a passenger who isn’t a threat dragged off a plane. What kind of working conditions would make such a thing possible?  It’s time we find out.

Andrew Faas is the author of From Bully to Bull’s-Eye: Move Your Organization Out of the Line of Fire.

Photo credit: The Red Dress/BloombergBusinessweek

The Silent Workplace Epidemic that Endangers Millennials

Millennial employees get a bad rap—often chastised as being lazy and self-involved, they are actually the largest current generation and swiftly eclipsing baby boomers in the workforce. While they bring plenty to the table—innovation, creativity, technological know-how, inclusiveness—they are also vulnerable to toxic workplaces. The medical journal Pediatrics reports that not only are they more likely to become clinically depressed than any other generation, more young women are struggling with the disease. Clearly they need psychologically healthy, safe and fair workplaces to make the most of their potential and maintain their physical and mental health.

Not meeting this standard has dire consequences for individuals as well as the nation. This is why I’m working with Mental Health America (MHA) to improve psychological health in America’s workplaces. MHA has studied this problem and found that mental health issues cost $51 billion per year in absenteeism and lost productivity and $26 billion in direct treatment costs.

My fear is that the current atmosphere of divisiveness, bigotry and bullying promoted by the current administration will compound the problem of mental health in the workplace. Adult bullying in the workplace can cause even more havoc on a person’s well-being than school bullying—many adults need their jobs so they and their families can survive. In a tough economy they may have no other option, so they are forced to endure negative treatment, which gone unchecked can lead to physical and mental illness and even suicide. With one in five Americans afflicted with a mental health issue at any given time, this is a serious consequence. For more information on how to create psychologically healthy, safe and fair workplaces and maximize the potential of millennials—and all employees—see my book, From Bully to Bull’s-Eye: Move Your Organization Out of the Line of Fire.

If you have coworkers—especially millennials—who are suffering, I urge you to reach out to them. As I indicated in recent articles about suicide resulting from workplace bullying and living with a person with mental illness, no one has to go this alone. There are resources for help. Choose to be an ally and advocate instead of a bystander. You can make a difference in someone’s life.

Credit: BIGSTOCK

Don’t Miss the Message Behind Employees’ Obsession with Political Chatter

The current presidential administration has employees glued to social media even during working hours. While productivity is always important this Wall Street Journal article totally misses a dynamic that is occurring in the workplace. The reason employees are spending time on social media and debating in person about what is going on is because they are experiencing democracy being dismantled, in real time on prime time. For many, what they are seeing on the news parallels what they are experiencing at work. Most have not witnessed the rise of totalitarianism in their lifetime and are completely consumed and confused by it—and at the same time unsure of what they can do to prevent it.

While my new book From Bully to Bull's Eye: Move Your Organization Out of the Line of Fire centers around workplace dynamics, it is equally applicable to society in general. Bosses, rather than bemoan this distraction, should tap into how employees feel about what is going on and create cultures where democracy thrives to the benefit of the individual and the organization. When employees experience this at work, they will be more secure in their own ability and more likely demand the same from government. 

Credit: BIGSTOCK

The Secret Weapon Against Bullies: Humor

Anyone who has witnessed one of Donald Trump’s fits on Twitter after Alec Baldwin portrays him on Saturday Night Live knows the man hates being laughed at. This is quite true for bullies across the board—humor at their expense makes them quiver. Not only do they not have a sense of humor, but they are incapable of understanding how humor humanizes someone in leadership. Instead, they just attack.

One of the most well known cases of a bully taking on someone with a superb and self-deprecating sense of humor took place between former Daily Show host Jon Stewart and Donald Trump in 2013. Trump had tweeted, “I promise you I’m much smarter than Jonathan Leibowitz, I mean Jon Stewart, who by the way is totally overrated.” Stewart wasn’t sure if Trump was trying to “out” him as a Jew—“Doesn’t my face do that?” Stewart said—or insinuate something more sinister, but he was quick on the retort. It took Trump a full four days to come up with his lame response.

The bully’s thin skin is also why Trump hates cartoonist Gary Trudeau who is fond of portraying the current president warts and all. Trudeau isn’t the only comic strip artist who gets under Trump’s skin; he’s joined by cartoonists around the world. However, the image that for my money best captured Trump’s persona was posted yesterday by cartoonist DWITT who inked the strip at the top of this page. It’s the artist’s depiction of Trump’s gag order to government science agencies and the rebellion begun by the National Park Service.  Clearly he struck a nerve—now most of the agencies have an alternative, non-governmental Twitter account and a science march on Washington is being planned.

Employees who are working for bully bosses much like Trump can take this comedic energy to help them cope and combat their negative working conditions. But please don’t put your position at risk—take a page from the rogue scientists and do it anonymously and not during working hours. A healthy dose of humor can keep toxic environments from becoming normalized and help activists in the workplace, and in society, fight for psychologically healthy, safe and fair conditions. 

Credit: DWITT

Cabinet Nominees Need to Pass a Psychological Evaluation

During my years as a senior executive I found that one of the most important tools we had for hiring the right managers and avoiding bullies was a psychological assessment. The results spoke for themselves and most went on to be outstanding leaders. Should the top jobs in the United States government be held to no less a standard?

As excellent as some of the questions have been during the cabinet nominee confirmation hearings —kudos to Sen. Elizabeth Warren for being extremely well prepared—what is not being assessed is psychological and emotional stability. In my new book, From Bully to Bull’s-Eye: Move Your Organization Out of the Line of Fire I have devoted an entire chapter to understanding a candidate’s emotional and psychological fitness. The congressional committees currently questioning Donald Trump’s nominees need this information in order to do their jobs properly.

What seems clear is that Trump is populating his cabinet with people who because of wealth or temperament are used to getting their own way and don’t factor in the information they need to make informed decisions. In this recent article in POLITICO, Trump’s biographers discussed how his competitive personality and fragile ego has created someone who prefers to pick fights and game the system for his own profit. The people he’s assembled (with perhaps the exception of Marine General James Mattis) seem to be cut from the same cloth. They are clearly lacking in inclusiveness, sensitivity and temperament. Sadly, the same can be said for the man who will be inaugurated tomorrow. His lack of psychological suitability is no surprise—The Atlantic wrote about it back in June—but a law requiring an assessment for these top jobs would go a long way to protecting the country, and the world, from unsuitable leaders. 

Credit: Washington Post

Job Seekers: Check Out the Company While They Check You Out

I’ve read a few different articles lately about what people should look for in a new job, and I thought I would chime in. In much of the material I’ve been reading the emphasis seems to be on workplace culture, but only in a shallow sense: Does it seem like the sort of place you can see yourself? Do the people there seem like the kinds of people you would want to spend your days with? And so on. However, something that I really encourage anyone fresh to the job market to do is full due-diligence on whatever organization they’re thinking about joining.

In addition to checking up on the business online, either in the news or on sites like Glassdoor, feel out the contacts you have at the organization about how the culture really is. Instead of just speaking to your prospective new boss during the interview (which is still really important), try to get some time with the person you’re replacing at the organization. If you don’t have any existing contacts at the organization, ask if you can have some time with a few employees who will give you candid answers about how the organization runs. Don’t be afraid to ask what the turnover rate is, or what exit interviews for the company found as have employees left.

Additionally, be sure to ask about the performance management system in place at the organization, as that can give you a real clue as to what’s valued in practice at the business, in addition to helping you understand opportunities for advancement. I go into this in depth in From Bully to Bull’s-Eye  (RCJ Press; January 10, 2017), but I sincerely believe that our workforce has the tools to see a toxic workplace coming. Many of the people I’ve worked with in toxic work environments could have saved a lot of heartache if they understood that when you go in for a job interview, you need to evaluate the organization as much as they evaluate you.

Credit: BIGSTOCK

Has Walmart Discovered the Key to Happier Employees and Higher Sales?

Can the answer to what ails the global economy be found in the people in blue vests at your neighborhood Walmart? When sales went down for the first time in Walmart history they tried something new—paying workers a better wage, giving them better training and more opportunities for advancement. And guess what happened? Being valued and given opportunities are part of creating a psychologically healthy, safe and fair workplace. Looks like Walmart is getting it! Neil Irwin reports in The New York Times: How Did Walmart Get Cleaner Stores and Higher Sales? 

Photo: Melissa Lukenbaugh for The New York Times