Preventing the Next Scandal

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Wells Fargo Joins Seemingly Endless List of Companies with Chief Executives Involved in Scandal

[September 29, 2016 update – Add Wells Fargo and its chief executive, John Stumph, to the seemingly endless list of scandals that could have been prevented. Read on to learn how to prevent the next scandal.]

Preventing the Next Scandal
German prosecutors raided the offices of Volkswagen AG to secure evidence for the investigation of the company in the emission-cheating scandal. Volkswagen stock has plummeted and the CEO has resigned, maintaining the story that he had no involvement in any wrongdoing. Also, the head of Volkswagen’s U.S. business answered questions from a congressional panel. But, somewhere, deep within the organization, is a person or people who knew exactly the genesis of the software cheat. They also likely know how the cheat has been able to persist through the delivery of 11 millions cars to the marketplace. So, where was the whistleblower?

And the Whistleblower is …
The whistleblower is nonexistent. There isn’t one. And, it really isn’t any surprise. Traditionally, there hasn’t been a safety net for would-be whistleblowers. Their lives are often wrecked by the people in governments, agencies, and corporations whose practices they expose. History reveals it is easier to systematically wreck the lives of the whistleblower and demonize them, than it is to make changes to a system that has run amok to the advantage of some. The list of wrongdoers, both people and organizations is long. View “list of whistleblowers” on Wikipedia and you’ll have days of entertainment, albeit in a dreaded, “watching the aftermath of a train crash”, sort of way. You’ll recognize some high-profile companies and organizations, but you may not know the back stories that led up to the moment the whistle blew. The lead up is the most important and often untold story.

Wasted resources
Imagine all of the resources, human and technological, inside and outside VW, that are focused on the emission cheating scandal. Now add to that, the resources involved in the multitude of other scandals and investigations happening. And to that, imagine further adding the resources yet to be consumed for future scandals that will sadly unfold. It’s abhorrent. Surely we can better make use of those resources, not the least of which would be to spend more time with family and friends and in strengthening our communities. It’s time we stop trashing the human race and the environment in the short run and pretending as though there will be no long-term consequences for generations to come. There always are long term consequences. Short term indulgent thinking is like junk food. It might satisfy our immediate hunger, filling us for the moment. But, it lacks nutritional value and substance. And in the long run, it doesn’t work for your waistline or your health.

Short term indulgent thinking is like junk food. It might satisfy our immediate hunger, filling us for the moment. But, it lacks nutritional value and substance.

You wouldn’t have blown the whistle either
Ask yourself, if you were an employee inside Volkswagen and knew about the emission cheating software, would you have said anything? To whom would you tell? How? When? You probably would not have said anything. Who has the courage to do say or do anything differently than toe the line? After all, if you’re livelihood is dependent upon continued ruinous behavior, whether it is emissions cheating or other nefarious activity, you’re not very motivated to change. Especially if you want to continue eating, paying your bills, and getting about in your life. Why disrupt it, especially for abstract things like other people you don’t know, the climate, or the environment. It’s even easier to justify bad behavior when the results of your actions are “at a distance” or you don’t see the immediate impact in the near term.

The time for change is NOW
As a society, we need a rethink, a re-frame. It’s time we pivot our behavior toward human progress, not away from it. Some of our past behaviors have not been stabilizing for any democracy on earth and they have retarded human progress and harmed the environment. Here are three things we can do to prevent the next Volkswagen emission cheating scandal or Enron debacle or Peanut Corporation of America poisoning or [fill in the blank here].

  1. Create a safety net for would-be whistleblowers
    As I’ve written about previously, we need a culture of care from the board room to the dining room. We also need a safety net for people that can sound the alarm when they see an innovation culture gone awry, whether it is involved in financial engineering, food production, emission scandals, government abuse, healthcare fraud, military wrongdoing, or some other area of society. We need a safety net for the people who have the courage to stand up and declare a system breakdown. But, we know most people won’t tell stories or reveal that bad things are happening unless they feel safe. So, let’s create a safety net for people to tell us when bad things are happening. If a whistleblower advances an accusation and then subsequently gets fired as a result of it, instead of having to crowdfund their way back to financial health they can draw against the safety net aka Whistleblower Insurance Fund. Fund the safety net through fees paid by the perpetrators of past egregious behaviors. In that sense, it is an insurance policy organizations pay into, triggered by their past bad behavior. It could be corrective in that people will feel safer to sound the alarm early, possibly preventing later disastrous and more costly circumstances. So, who would fund such an insurance scheme today? For starters, the banks that engaged in financial engineering that brought about the global financial crisis, automotive makers who delayed recalls that knowingly killed unwitting vehicle occupants, oil companies that have ruined ecosystems, etc.
  2. Create an Early Warning System. Probably the best innovation for policymakers in government and industry would be to collaborate on a system that prevents the need for whistleblowers in the first place. Alongside the notion of “ideas can come from anywhere” organizations also need to instill the notion of warning flags and that anybody can invoke them. As in automotive racing, a black flag means disqualification and a return to the pits. Nobody shoots the messenger, the flagger is safe to be the flagger in future racing events. We need to revere the person that waves the proverbial “unsportsmanlike-conduct” flag. When a rogue engineer, or accountant, or marketer, or whomever, does something that doesn’t appear to advance an agenda that favors humans and the environment or worse outright harms it and subsequently the organization, then we need to make this visible. And, we need this to be made visible long before the train is off the track and things cannot be easily corrected. 11 million cars is the current tally for VW cars affected, along with a 40% slide in stock price, a six billion dollar set aside for fixes (and climbing), halted sales, diminished resale values, and a tarnished brand. An early warning flagging system would be much less expensive.
  3. Declare a Stop. As a species, we originally create industries to do useful things for humanity. It makes us unique from other animals on the planet. And, when industries and institutions stop doing useful things for humanity we need to unwind them, divert them, correct them, check them, and even revoke corporate charters. I’m not suggesting that Volkswagen should go away; I don’t think they should. I think there are many good and innovative people that can do tremendous good for themselves, their country, and for a global community. But, when their culture or leadership prevents them from doing this or their harm exceeds their good, then they need to be stopped.

It is important that preventative measures be taken ahead of more ruin to humans and the environment. Government regulation is necessary but insufficient. We need a more holistic and inclusive system that isn’t reserved for trial lawyers and the judicial system to work on behalf of things already dead or harmed. A free market without any oversight is like the pudgy little kid at mom’s party that takes more cookies when guests are not looking. Pretty soon the cookies are gone and mom’s friend Marge never got one. It’s not immediately obvious why. Thankfully, in our increasingly global community, people are looking. You should be, too.

This article is a call to leadership in all industries, government, and academia to consider that as a human species we ought to be sunsetting wasteful, deceptive, and harmful practices that manufacture financial crises, harm people and the environment, waste human potential, and then remedy it later through courts. Let’s put that nonsense in a museum. But, this article is also a call to action for every member of civil society to engage leadership in that conversation and hold them to a higher account. We can and must do better.

Rather than attack whistleblowers, let’s create a safer environment where we can learn from them, confront our collective reality, correct our behaviors going forward, and move on to creating a better world with more nutritious cookies for mom, Marge, and all. These are conversations worth having inside your organization, with elected officials, among elected officials, and at your dinner table. Or, we can continue to talk about the next scandal over our collective spilled milk.

about the author

Gregory Olson’s latest book is L’ impossi preneurs: A Hopeful Journey Through Tomorrow, a light-hearted and deadly serious book about a brighter future where we live more meaningful lives, governments invest in people and sustainable progress, and technology serves humans. In Chapter 8: Social of the book Gregory provides historical perspective around whistleblowers as well as promotes ideas that would help make society more civil with respect for truth, increased accountability, and transparency. This is good for nations and good for investors in companies who get caught up in scandal.

image of Greg-Olson-Managing Director of Delightability and author of Experience Design BLUEPRINT

Greg also authored The Experience Design Blueprint, a book about designing better experiences and then making them come true. Chapter 8: Promise Delivery System in The Experience Design Blueprint especially pertains to this article. The promise delivery system is a mental model for making and keeping promises to an organization’s various stakeholders. It is technology agnostic. Any organization can operationalize a promise delivery system using whatever technology and personnel it has at its disposal.

Gregory Olson founded strategy and design firm Delightability, LLC. with the belief that if you delight customers then success will follow. He believes that we all have the potential to do better, as individuals, organizations, and communities, but sometimes we need a little help.

A Culture of Care Begins With YOU!

A Culture of Care Begins With YOU!
When I first began writing this post I was targeting leadership, but then I realized many people with titles of leadership have adopted belief filters that will render this message inert. They’ll never see it and if they did, many will think their circumstances so unique the message doesn’t apply to them. But, you are smarter than this, so read on.

sorrow image - culture of care blog post at delightabilityThis week, 3 noteworthy things happened:

  • The CEO of Volkswagen resigned amid the discovery of emission cheating vehicle software and the subsequent battering of the company stock
  • Turing Pharmaceuticals bowed to public pressure and agreed to reverse an abrupt 5000 percent price hike of the life saving drug Daraprim
  • The former owner of the now defunct Peanut Corporation of America was sentenced to 28 years in prison for his role in a salmonella outbreak that killed 9 people and sickened hundreds

Pope Francis addresses the U.S. Congress
Amid these negative developments Pope Francis addressed members of the U.S. Congress.
I want to focus on a few words that Pope Francis shared, namely “culture of care”. Here they are in context.

“In Laudato Si’, I call for a courageous and responsible effort to “redirect our steps” (ibid., 61), and to avert the most serious effects of the environmental deterioration caused by human activity. I am convinced that we can make a difference and I have no doubt that the United States – and this Congress – have an important role to play. Now is the time for courageous actions and strategies, aimed at implementing a “culture of care” (ibid., 231) and “an integrated approach to combating poverty, restoring dignity to the excluded, and at the same time protecting nature” (ibid., 139). “We have the freedom needed to limit and direct technology” (ibid., 112); “to devise intelligent ways of… developing and limiting our power” (ibid., 78); and to put technology “at the service of another type of progress, one which is healthier, more human, more social, more integral” (ibid., 112). In this regard, I am confident that America’s outstanding academic and research institutions can make a vital contribution in the years ahead.”

Think about the possibilities for those words, “A Culture of Care”.

image for reasonable investor test - culture of care blog post at delightabilityReasonable Investor Test
I want to share a personal story. In 1998, I started a software company. As the founding CEO, it didn’t take long to realize I had two jobs, raising capital and building the organization’s operations. We hired an outside CEO to help and I took the reigns as the Chief Operating Officer. As the company grew I couldn’t be party to every decision, nor could I attend every meeting, though employees continued to seek my approval. I invented a test they could employ on their own, without me in the room. I called it the Reasonable Investor Test.

I explained it to them like this. Imagine yourself presenting your decision to a collection of 16 reasonable investors that politely assembled to hear your story.They are sitting across from you at a large table looking you directly in the eye. You are about to explain to them the decision you plan to make or the action you will take. If you can look them in the eye and justify the decision or expenditure, then it passes the test. If you would not be willing to do this then you probably should not make the decision or take the action you are considering.

I concocted this test after our CEO and VP of Sales decided to prematurely celebrate a customer win by indulging in a lavish and expensive meal for themselves. I begrudgingly approved the expense, but I didn’t think reasonable investors would have appreciated their invested money being spent this way. We never did win that customer and the CEO and VP of Sales never understood or embraced the Reasonable Investor Test. But, again you’re smarter than this, so read on.

Life beyond the spreadsheet or whim
A culture of care, like life, is a bit more complicated than what might initially appear favorable on a spreadsheet or what one might feel like doing at the moment. I’m guessing the former CEO of the Peanut Butter Corporation might today consider more stakeholders. I’m also guessing that the former CEO of Volkswagen might employ some sort of Reasonable Stakeholder Test for employees to use in guiding their own work or that of colleagues. Investors are not the only stakeholders just like spreadsheets are not the only tool. There are many other stakeholders to be considered, customers, employees, the environment. And closer to home, stakeholders might include neighbors, the community and even members of your household.

cooperation image - culture of care blog post at delightabilityFreed from the shackles of inaction
Pope Francis shared great words with Congress. I hope members not only listened, but that they heard him. Imagine if Congress freed themselves of their own proverbial mental shackles and focused forward, to a new era, a “people-first” era that confronts reality, embraces science, respects natural resources, and advances prosperity for all households, even the people who don’t currently have one. Imagine possibilities where members act cooperatively, embracing a culture of care, leading the way the for the nation.

penguin image - culture of care blog post at delightabilityBut, even if they don’t, a culture of care can begin with each of us. At home, in school, in our communities, at work, even in the online community. So what about you? How will you create a culture of care, in your home, in your work, in your community? You’ll likely need a test to go with it. What will be your equivalent Reasonable Investor Test? We really can all do better as individuals, organizations, and the world community. I hope you’ll do your part. Onward.

about the author

image of Greg-Olson-Managing Director of Delightability and author of Experience Design BLUEPRINTGregory Olson is a consultant, speaker, and author. His latest book is L’ impossi preneurs: A Hopeful Journey Through Tomorrow.

Greg also authored, The Experience Design Blueprint, a book about designing better experiences and then making them come true. The models in the Experience Design BLUEPRINT are equally relevant to organizations of all types and sizes including start-up entrepreneurs, nonprofits, for-profits, and government.

See a book summary. Read the book reviews on Amazon. Read The Experience Design Blueprint on Kindle or any device using the free Kindle Reader application or read the full-color print edition.

Acceptable Discomfort is Better than None

Acceptable Discomfort is Better than Nonemonster puppet with strings - acceptable discomfort blog post - delightability
Acceptable discomfort is what you tolerate in the spirit of moving forward. In matters of work it might be about a launch, or an initiative. Closer to home it may be about vacationing or home projects on the way to growing old together. Think about the alternative. What if you halted forward progress at each step where you had some discomfort? You would become a puppet master of inaction.

If a particular issue or item is too uncomfortable, then ask yourself why. What does this matter so much to me? Is it so important that you should halt progress? Often, you’ll find that it is more important to move forward than to declare a shutdown. Remember, perfection is the enemy of good enough.

puppet with strings - acceptable discomfort blog post - delightabilityAcceptance does have ramifications, however. It means you might not get to vote on each item, every time. It means you won’t be able to inspect every nail driven, every line of code, every written word. You won’t review every spoken promise and supervise all interactions. It also means that decisions don’t get undecided when somebody on the team voices dissent. It means you’ll move forward even when you don’t have perfect information. And, you’ll likely do so at a pace that is too fast for complete comfort. You’ll trust where previously, you didn’t. But, it’s all going to be OK.

bridge to progress - acceptable discomfort blog post - delightabilityIf we didn’t have acceptable discomfort there would be little progress. Think about the project that never completes, the product that never launches, or the organization that spits and sputters like an old junky engine. Think of the U.S. Congress and the bickering and obstruction that halts human progress and retards the economy.

You’ll get far more done together if you embrace the notion of acceptable discomfort. And, the feelings you’ll share when you reach your destination together will be far better than the feelings you’ll have with inaction.

about the author

image of Greg-Olson-Managing Director of Delightability and author of Experience Design BLUEPRINT

Gregory Olson is a consultant, speaker, and author. His latest book project is l’ impossi preneurs: A Hopeful Journey Through Tomorrow.

Connect with Greg on LinkedIn, Facebook, or Twitter.

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Greg also authored, The Experience Design Blueprint, a book about designing better experiences and then making them come true.  Exercises and mental models in the book will build your confidence in envisioning better possibilities and your competence in making them come true. Chapters in The Experience Design Blueprint, that pertain to this post include:

  • Chapter 7: Improving the Journey
  • Chapter 9: The Neighborhood
  • Chapter 11: Barriers to Innovation and Overcoming the Wall
  • Chapter 13: Taking Flight
  • Chapter 15: From Argh to Aha!

See a book summary. Read the book reviews on Amazon. Read The Experience Design Blueprint on Kindle or any device using the free Kindle Reader application or read the full color print edition.