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Executive

Leadership Isn't a Role, It's a Series of Behaviors

We know there is a deep connection between culture and organizational outcomes. When culture is done right, it unleashes tremendous energy, harnessing a diverse set of talents towards shared organizational goals. But a culture that is hostile and dysfunctional cripples the organization’s capacity and drives away talent.

While each and every employee plays a role in creating an organization’s culture, it’s the leadership that has the power to make or break the workplace culture. Why? Because “leaders bring the weather.” The things leaders say and do signal to the entire organization what behaviors are permitted, and their impact on employees is so great that the behavior of company leaders is often mimicked throughout an organization.

Consider former Uber CEO Travis Kalanick, whose aggressive, win-at-all-costs leadership style created an ethically hazy and toxic culture, resulting in hundreds of complaints and lawsuits against Uber by employees and customers alike. Or the demanding, authoritarian leadership of former Volkswagen CEO, Martin Winterkorn, charged with aggravated fraud by German prosecutors for deceiving regulators about VW’s diesel exhaust levels. Under his reign, the company culture was marked by an extreme deference to authority, intimidation and fear, and a lack of tolerance for dissent.

While the above are flagrant and scandalous examples of leadership gone awry, organizational culture can also be eroded by subtle, seemingly insignificant behaviors, off-the-cuff comments, and even nonverbal behaviors. Leaders don’t have to yell, scream, or engage in unethical behavior to undermine culture. In fact, most of what constitutes culture is tacit and subtle. It comes down to two questions: how does it feel, and how do people relate to each other?

How Online Behaviors Are Impacting Your Bottom Line

Many of us have experienced toxic behavior in the workplace. Though many of us use stories and anecdotes to illustrate and process our experiences, few of us have had access to quantifiable data when attempting to communicate the importance of managing these behaviors at work. What are the full costs of toxic workplace behavior? To help organizations get clarity around the value of reducing toxic behavior in the workplace, we’ve anonymized and aggregated a trove of data around this question, and taken it upon ourselves to use this data to provide meaningful insight for companies around the world.

Last year, we kick-started this conversation by publishing a study called "The Cost of a Toxic Hire.” It was a breakthrough resource showing how much money companies were losing to the turnover and absenteeism caused by toxic employees. While the response was overwhelmingly positive, we recognized that companies were losing far more than $1.2 million per year. We soon found even more information about how much market cap companies were losing to the impacts of toxic behavior, and the measures that boards are now taking to protect their companies from the fallout of insidious workplace events.

Earlier this year, we launched the Toxic Employee Handbook with Dr. John Sullivan, a renowned influencer in the world of talent management. This newly released handbook covered over 40 distinct categories of damage caused by toxic employees and offered new tools to start building a business case for formal toxic behavior reduction efforts. Again, the response was overwhelmingly positive. More and more companies are looking to understand the full extent of damages that toxic employees inflict on our businesses and to discover ways they can identify them before they harm our organizations.

Why Social Media is Healthcare’s Biggest Risk

As of 2019, nurses and doctors have been voted the most trusted professions in the United States. While this is great news for the healthcare industry, there are also good reasons for this designation. We trust nurses and doctors with our health and safety. So when we find a provider that treats us with care, we’re relieved to find they have our best interest in mind. However, trust can be easily broken, and as new technologies transform the profession, we see two forces making that trust harder to regain.

Today, there’s a steady rise in HIPAA violations on social media putting privacy at risk, and a long-standing epidemic of toxic behavior making its way online and threatening the basic safety of patients and staff. In this blog, we’ll explain how these issues play out on social media and the public web, and lay out why these mistakes are costly both for patients and the providers they trust.

The reason we still don’t understand culture risk

Cultural and reputational risks are becoming more and more common for enterprises today. As companies across business sectors find themselves suffering reputational damage over some form of toxic behavior or unethical business decision, a growing number of executives are starting to see culture as a direct contributor to the bottom line. While the increasing awareness around these issues is encouraging from a social standpoint, many executives are still unsure how to tangibly improve their company culture. According to Deloitte’s Human Capital Trends Report, 82% of executives say that culture is a potential competitive advantage, yet only 12% believe they’re driving the “right culture.”

How is it possible that only 12% believe they’re driving the right culture? In part, it’s because the processes that executives and board members have in place aren’t giving them the signals they need. Despite the fact that information is essential to understanding and managing culture risk, especially in a digitized and media-driven business environment, 65% of CEOs and 62% of board members today say they lack a process for identifying signals of potential culture risk. This leaves companies prone to a range of negative consequences ranging from consumer backlash to a spike in turnover.

How can there be such a lack of process for identifying signals of potential culture risk? At its core, the reason we’re not sure whether or not we are driving the ‘right’ culture is because many of the processes that we use to obtain relevant information rely on good intentions. Specifically, many of us rely on self-reporting and the moral character of leadership to improve organizational culture and reduce corporate risk. But as the research around organizational psychology and leadership suggests, neither of these approaches are enough to help businesses get the information they need.

The Millions You're Spending on Marketing Could Be for Nothing

Socially responsible marketing is on the rise. If the recent consumer controversy over Gillette’s ad on masculinity wasn’t enough, everyone in the business world is also talking about the new marketing trend. In the last 12 months alone, Deloitte, McKinsey, and the World Economic Forum in Davos have all noted that more and more consumers are looking to businesses to take stances on important social issues. The numbers are talking as well: 66% of consumers will pay more for products from companies committed to positive social impact. With millennials, this number is even higher. 73% will pay more for sustainable products, and 81% expect companies to take a public stance on social issues.

That means that there is an enormous opportunity at hand. Brands that can properly connect their brand with relevant social causes have grown their audience and revenue by as much as 200%. However, you can spend millions on marketing in hopes of winning favor with the public without realizing that it takes as little as one person to erode the goodwill you’ve built. While socially conscious marketing is helpful and even necessary today, a single revelation of toxic employee behavior can render all of those marketing efforts fruitless. Yes, the numbers suggest that socially conscious marketing pays dividends—but take a closer look and you’ll see the costs of toxic behavior are even greater.

How A Fortune 100 Manager Got Away With Dozens of Sexual Harassment Cases

I am grateful to have had so many positive experiences in the workplace. I worked at my previous company for six and a half years, during a time of tremendous growth in which the company grew from 3,000 to 25,000 employees and became one of the most highly recognized brands in the world. Throughout this time, the focus on culture and community was apparent from the top down and instilled a genuine feeling of family amongst my colleagues and myself. Even after leaving the company a year and a half ago, I still feel it. Four people on my former team became some of my best friends, and I think of my former colleagues as extended family.

So when I discovered that more than a dozen young women – my extended family members – all experienced the predatory behavior of another male colleague through a systematic and premeditated series of inappropriate conversations via an internal company chat tool, I was furious and heartbroken. I discovered this one night at our company’s annual sales conference, where thousands of people in my work family gather each year to connect, learn and grow together. After one of the sessions, I was catching up with friends from other offices when a teammate shared a story about his team dinner from the previous evening.

During that dinner, a manager on another team had reached out to a young woman and innocently begun conversation. The discussion eventually turned to personal stories, gaining trust and testing the waters, and ultimately landed on a hugely inappropriate story of sexual nature. The entire conversation was designed to make this woman feel comfortable and trusting, only to entrap her in a conversation she never intended to have and could not easily escape. It is classic predatory behavior, and it has no place in the workplace–least of which, my workplace.

Online Screening: The Next Frontier of Insider Threat Detection

As more and more of our lives move onto the public web, businesses are becoming aware of the degree to which publicly available online information can help them stay ahead of potential risks. Previously, we discussed how online screening can help organizations manage their mergers and acquisitions. However, as the landscape of risk continues to grow, we’re also seeing companies leverage online screening to prevent insider threats—malicious threats to an organization’s security, data, and computer systems that comes from the people within.

Traditionally, businesses have mitigated insider threats by identifying and troubleshooting technical vulnerabilities in the enterprise or responding after the fact. But as more and more employees collaborate with criminal and activist groups, and the cost of the average insider threats reaches $8.7 million per incident, the success of your business can also hinge upon your ability to catch more emotional and qualitative vulnerabilities. How do these “emotional warning signs” indicate a potential attack, and how do you find them before it’s too late?

In this blog, we’ll discuss how employees’ interactions with social media and the public web can lead to costly data breaches. From there, we’ll break down the difference between negligent and malicious insiders, and why companies need sophisticated online screening solutions to safeguard themselves from the full set of potential vulnerabilities.

Why Mergers & Acquisitions Have Become HR's Worst Nightmare

Mergers and acquisitions are at an all-time high. In the last five years, the total financial value of mergers has increased by 250 percent and there are no signs that things will slow down in the coming year. While this is good news for dealmakers, it puts HR teams in a precarious situation. As an HR leader, you are more likely to deal with an acquisition than ever before. Additionally, you’re also up against the fact that 20 percent of dealmakers cite cultural alignment as the root cause of failed mergers. This means that even though mergers and acquisitions (M&As) are decided largely on financial projections, your department carries a disproportionate amount of responsibility for its ultimate success or failure.

The good news is that a collective 34 percent of dealmakers now consider effective integration and sound due diligence as the most important factors in achieving a successful M&A. But even though study after study shows that success in mergers and acquisitions hinges on people, culture too often gets lost in the shuffle. As an HR leader, what can you do to make a case for an effective cultural audit and steer your company towards success?

In this blog, we’ll break down why culture has historically been an afterthought in M&As, why that can no longer be the case, and how online screening can help ensure cultural fit with the speed and specificity executives rely on at each stage of a merger or acquisition.

The Rise of the Emotionally Intelligent Enterprise

The last 18 months have been transformative for the way companies do business. As people pushed corporations to adopt new policies through movements such as the global walkouts at Google, companies that were once driven purely by sales and revenue are starting to change. They are beginning to realize that they will need to take a stance on issues such as harassment and bigotry to remain in good standing. In an age where authenticity and accountability are key, empathy has become a driving force for business success.

However, as sexual harassment lawsuits and global anger reach record highs, and headline after headline continues to rock corporations across industries, the fact remains that companies must actively prove to consumers and employees that they care.

Today, employees and customers look to companies to understand where they stand on major social issues. Many businesses have responded to this trend with well-intentioned PR statements around their corporate culture and policy. However, the bar today has been set far higher than before. Customers and employees often feel that companies can’t gauge their emotions and are increasingly frustrated by well-meaning statements with little follow through. That means that to assuage consumer anger and combat a growing possibility of reputational loss, companies need to demonstrate emotional intelligence, not just a political stance.

No More Silos: How People Risk Will Change Your Department in 2019

>> Today's blog comes from Fama’s former Head of Product, Jordan Lincenberg, who has managed the development of solutions and products that have helped Fortune 500 enterprises mitigate people, culture, and reputational risks. In this blog, Jordan discusses why companies must adopt new tools and methods of collaboration to solve their challenges around people risk management in 2019.

In the age of social media, anyone can be a journalist. In a recent article about bad employee behaviors gone viral, Erik Deutsch of the LA-based ExcelPR group said that the ability to post anything in real time and make it accessible to the entire world has forced companies to rethink risk management. “If someone was mistreated in a store 15 years ago, they might make a scene and tell their friends, and that would be it,” he says. “Now, they post it online and it can become a sensation.”

As this year’s headlines around workplace harassment, bigotry, and violence suggest, individual departments are struggling to mitigate people-based risk on their own. HR is overwhelmed with paperwork. PR is scrambling to react quickly enough to control the narrative when bad news breaks. Security teams are often ill-prepared to handle allegations that boil down to “he said, she said” disputes. IT is asked to manage a growing set of channels not necessarily optimized for security. The new reality of people risk is exposing major cracks in traditional organizational structures. Unless companies adopt new approaches to people risk management (PRM), it will be increasingly difficult to stay ahead of potential threats.

So what’s on the horizon for people risk management? Moving forward, we will see significant shifts in structure, process, and technology to promote deeper collaboration between HR, risk, digital communications, and IT. While organizations will take a variety of approaches to mitigate these new threats, we predict three general trends: