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.

Photo credit: BIGSTOCK

Where’s the Beef? DC Dumpster Fires Steal Focus from Tainted Meat

The endless reality television drama that is Washington is pushing news headlines alerting us of real danger down below the fold. Lost in the revelation-per-minute scandals recently was news of a major Brazilian federal police investigation into tainted and adulterated meat that was being exported by Brazil’s largest meat processors. While the United States gets only a small fraction of meat imports from Brazil this could have become a widespread human tragedy if it had gone unrecognized. Among the places that purchased this unsanitary product were schools and retail chains including Wal-Mart Stores, Inc.

When dishonest practices happen on such a large scale, I have to wonder what workplace conditions were like that made corruption—in this case bribing government officials to loosen regulations—possible. What was it about the culture of JBS (the world’s largest beef exporter) and BRF (the world’s largest poultry exporter) that would enable such behavior as mixing healthy meat with tainted product, chemicals and/or foreign matter? Clearly there was a culture of fear that kept insiders from revealing what they knew or sharing that information with a superior who would be motivated to stop the practices.

From my experience working with embattled companies, I find when this happens, no amount of classes, awareness seminars, pleas for employee communication or morale building makes any difference. Bad practices are built into this sort of culture and cannot be changed. The only way to save the company is to dismantle it and rebuild it into a culture that has transparency built in from the foundation.

Based on the reported decline in export revenues, it’s all too likely that not just the country’s reputation but the economy of Brazil has been severely damaged. I have to wonder if the beef industry will recover from this scandal.

This is all too reminiscent of the ongoing tragedy in Flint, MI or the banking debacles at Wells Fargo and TD Bank. Leaders need to wake up and realize that they must create a workplace culture that allows employees to report devious and dangerous practices without fear of reprisal. It’s only by enabling workers to resist bad practices that C-suite executives can sleep soundly at night.

Photo credit: Reuters

Bridgewater Associates: Radical Transparency or The Emperor has No Clothes?

Just how radical is the “transparency” at Bridgewater Associates? The huge hedge fund gathered quite a bit of negative press after an employee filed a complaint with the Connecticut Commission on Human Rights and Opportunities about the firm’s culture of constant video surveillance and recording all meetings. Matters were further compounded by a filing by the National Labor Relations Board, which revealed some of the behind-the-scenes workings of the firm, which seemed to include a fair amount of humiliation and occasional harassment.

At the New Work Summit conference sponsored by the New York Times, Bridgewater founder Ray Dalio described the culture of his organization as being like a nudist camp: “…it’s very awkward. There has to be getting over the emotional reaction,” he said.

As an expert in cultural transformations in the workplace, I see a cutthroat culture where employees have license to discredit one another as one is pitted against the other. If the New York Times statement that one-third of their hires leave within two years is accurate, they either do a terrible job of hiring people or it’s a horrible job—or perhaps both.

Adam Grant in his book, The Originals, highlights Bridgewater as having a “commitment” culture where “the secret is promoting original ideas.” This is great in theory but has a dark side when applied without parameters that reinforce civility.  As I discuss in my book, From Bully to Bull’s-Eye: Move Your Organization Out of the Line of Fire, employees’ behavior is rooted in the workplace culture that surrounds them. As Oscar Wilde said, it’s the prisons, not the prisoners, which need reformation.

I’ve written recently about how Uber CEO Travis Kalanick who reeling under allegations needs to change the way he leads. The behavior of his firm reflects the culture he created. This is true of all CEOs, although sadly neither Kalanick nor Dalio seem to grasp this.

Photo credit: Business Insider

Cultural Transformation at the Royal Canadian Mounted Police

The sexual harassment issues with the Royal Canadian Mounted Police have been well documented. However, in the face of the settlement they’ve made to close the class-action lawsuit against them, I wonder how much the RCMP will truly transform its culture to correct the faults that led to this situation in the first place. As I’ve written in my new book (out in January!), sexual harassment in the workplace is often the result of power-dynamic bullying and can often result in retaliation against the employee being harassed. Complete cultural change is needed to root out a harassing culture as extensive as the one at the RCMP – as over 500 current and former employees were part of the sexual harassment lawsuit. While a formal apology to the victims is a good first step, we have yet to see the substantive details for the organizational makeover needed at the RCMP. Read more at The Globe and Mail.

Image: RCMP commissioner Bob Paulson, left, answers a question during a news conference, as plaintiffs Janet Merlo, centr, and Linda Davidson look on in Ottawa on Thursday, Oct. 6, 2016.
Credit: Adrian Wyld/THE CANADIAN PRESS via Globe & Mail.

Actions Speak Louder than Words in Forming Workplace Culture

This article is dead on. Many business leaders think they can lead their companies with words rather than actions – but actions, even the small ones, speak a lot louder than any promises made about customer or employee satisfaction. When a company utilizes ticker-timer on call length, as cited in this NYT article, it has a more substantive impact on the psychology of a workplace than anything the CEO might say about taking the time to truly service clients. These kinds of decisions the things that indicate what an organization truly values – and when what a company’s stated goals are different from the ones in practice, it’s a recipe for potential disaster. And, it now looks like former Wells Fargo CEO John Stumpf is learning that lesson the hard way. 

Photo: John Stumpf testifying before the House Financial Services Committee. Credit: Al Drogo via NYT.

Narcissism Doesn't Help You Retain Employees

This is something that managers should keep in mind. The emotionally intelligent boss will retain top talent, not only through the ability to predict issues before they start, but by being able to inspire the kind of confidence needed to ensure employee retention. Avoiding the flip side of that coin – narcissism – is essential to developing a workplace that is not characterized by high turnover. Just as narcissists tend to have “a lot more churn in their friendships” according to this article, businesses run by narcissists tend to have a lot more “churn” within their office. While oftentimes a person’s temperament is not truly a choice between emotional intelligence and narcissism, having self-awareness about this divide in business can be invaluable in building a workplace oriented for employee longevity. Read more about narcissism and emotional intelligence at the Los Angeles Times. 

Image: Roberto Parada / For The Times via The LA Times

Human Resources: A Dismal Profession?

In all the discussion about Wells Fargo in the wake of their sham accounts scandal, there’s been no real mention of who or what was the direct architect of their corporate culture. In my opinion, human resources should be responsible for the integrity of an organization’s culture just as much as the CFO might be responsible for the integrity of that organization’s numbers. I’ve worked in HR – early in my career, I was an HR professional, and throughout my career, I’ve worked with HR roles within my portfolio of responsibilities – and I think it’s safe to say that HR needs to be held accountable for the cultural makeup of a company. They’re the team that develops incentive programs like the ones that allowed 5,300 employees at Wells Fargo to lose their jobs for following their culture’s status quo. They’re the team responsible for ethics training, handling whistleblowers, and helping employees deal with the strain of impossible sales quotas. In my new book (out in January) and in previous blog posts, I’ve compared workplace cultures to ticking time bombs, which go off when a company’s leadership neglects the reality of a workplace structured for scandal. When a culture is a ticking time bomb, HR is almost always part of that problem, either in the form of discouraging whistleblowers, creating programs that don’t truly address interpersonal conflicts associated with sales goals, or creating a veneer of caring about customers and employees that’s entirely false. I suspect much of this went on at Wells Fargo – just look at the HR gobbledygook on their website (which hasn’t been updated since 2015) for evidence of this. However, as much as HR can be part of the problem with workplace culture, they can also be part of the solutions to fix those problems – if only HR professionals had the courage and honesty to stand up, acknowledge cultural issues, and inform leadership in order to make actionable changes needed to avoid disgraces that harm customers as much as they harm the organization’s reputation. 

Photo: Getty Images via Wall Street Journal 

Being Wells-Fargoed Should Keep Top Executives and Boards of Directors Up at Night

The news broke this morning that Wells Fargo’s board has decided to revoke compensation valued at $41 million from the company’s CEO, John Stumpf, in relation to the sham customer accounts created by employees to fluff sales numbers. Additionally, Wells Fargo’s former head of the community banking division that is the source of the scandal, Carrie Tolstedt, has also been financially penalized. I was surprised to hear that these two were being reprimanded for the scandal by Wells Fargo – but then, it occurred to me just how similar this was to the Volkswagen scandal. As I’ve written about before in Directors & Boards Magazine, both companies initially found that a swath of employees were to blame, before moving up the chain to management-level employees who were turned out only after it became increasingly clear to the public just who was to blame for their respective breaches with the public trust. In short, Wells Fargo is scrambling, just the way VW did when the emissions scandal broke.

I’ve said it before, and I’ll say it again – CEOs need to be aware of what is going on in their businesses. Transparency is the name of the game here – not just with handling scandals in the public eye, but in managing employees in every sector of business. Firing scapegoated lower-level employees and revoking the huge payouts to executives is fundamentally a band-aid approach to fixing the problems that lead to scandals. Firstly, Tolstedt should not have been allowed to retire peacefully with a few penalties imposed on her severance package – Wells Fargo should have made a point of firing her. Additionally, if it is revealed that Stumpf was fully aware of the sham accounts and covered up for them, he should also be dismissed publically. However, before either of those two steps could be taken, the most important course of action for Wells Fargo (and any similarly scandalized corporation) is to conduce a full, comprehensive and objective investigation into the root causes of the wrongdoing that occurred. Having a complete picture is essential to actually curing the problems present in any organization – and it makes a more convincing argument to the public whose trust those organizations are trying to regain.

At the end of the day, Wells Fargo’s behavior is yet another stain on the already-tainted US banking industry. The pervasive nature of short-term goal oriented cultures will almost always result in similar scandals that further erode the public’s trust in those institutions they have no choice but to invest in. It’ll be a long time before those 5,300 employees let go for their “rogue” behavior will be able to get a job again, just like it will be a long time before the employees let go for whistleblowing will feel comfortable standing up for their principles again. Depending on how far this particular scandal goes, perhaps the entire board will need to be replaced before anyone is willing to give Wells Fargo their money again. 

Image: Stumpf on Capitol Hill last week. Image Credit: Gabriella Demczuk for NYT

Post-Industrial Workplace Cultures

There’s a lot of authenticity to this story of a man’s journey through post-industrial America. The reality isn’t those stories of “making your own way;” for the majority of working people, the narrative is filled with tales of coping with big-picture changes in today’s workplace. More respect for the reality of the situation might result in more respect for America’s working class, which has been failed again and again by society at large, in large part contributing to the frustration with authority we’ve seen in modern civic life. You can read this great piece by David Brooks in The New York Times.

Image credit: Luke Sharrett for NYT

Conflating "Happiness" and "Engagement" at Work

I think this article from The Globe and Mail about why it’s okay not to be “happy” at work totally misses the point. Being “happy” at work means different things depending on the work environment itself – it’s not all about being “content” and demanding spiritual and aspirational fulfillment, as this article seems to suggest. For the vast majority of working people today, being “happy” at work means nothing more than operating in a workplace where they’re not being abused or harassed, not living under the threat of layoffs, not being compelled to work unethically (as we’ve recently seen at Wells Fargo), and where they’re not being assessed by a system that’s prone to racial or gendered biases. Many of today’s unengaged workers would be “happy” for a fair shake and a job that values them as people. Conflating psychologically healthy workplaces with lofty and/or unrealistic notions of office “happiness” is not particularly helpful for many of today’s businesses. You can read the article I'm responding to at The Globe and Mail.