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.

Our National Conversation Surrounding Employment is Chicken Feed

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Yes, chicken feed, as in a meaningless pittance. The conversation about employment falls short of what is needed.

This blog post is actually inspired by a friend of mine. She is a smart, educated science teacher that in spite the cries for more women needed in STEM jobs she remains among those experiencing long-term unemployment. In response to a recent article about how states are confronting high long-term unemployment (original article here ) she shared this comment.

“My state has decided to sweep us all under the rug and pretend we do not exist. SO much easier that way!! You do not HAVE to deal with it then, as long as you can hide all of us in plain site.”

image of make believe fairy tale house for blog post about employment conversation- delightabilityWe live in an era of make-believe.

It is a bit reminiscent of another time in recent history when officials banned the word tornado. They didn’t want to cause panic. The result was tornadoes still happened and in the absence of warnings, more people and property were unnecessarily harmed, or worse. See related article here.

When we make things visible we can then actually decide to act differently. If we don’t believe in the viruses and bacteria that are invisible to the naked eye then the conversations about preventing infectious diseases are pretty short. We accept germ theory as reality today, but that was not always the case. Before 1880 physicians and scientists believed that diseases such as cholera, chlamydia or the Black Death were caused by bad air. This was referred to as Miasma theory and was in place since ancient times. Learn more here.

Today, we are still lingering in the aftereffects of a global economic meltdown. Some are working too much; others not enough. Save for the extremely wealthy, many have had their fortunes trimmed and debts amassed. The American [insert country here] Dream has been scaled down for many. This seems to be part of the new normal, at least for now.

The World of Work Has Changed.

There are many things that have contributed to a structurally changed world of work. We have witnessed the flight of capital to low cost regions, the shuttering of businesses old and new, the avoidance of taxes by large corporations, increased consolidation in many industries, the resulting financial hardship of municipalities, the creation of exponential organizations that employ a disproportionately small number of people compared to the large number of people they serve (see WhatsApp as a classic example – 55 employees, $19 billion purchase price, 100’s of millions of customers), a gig economy where workers’ rights have largely evaporated, an anti-labor movement by many politicians (some even repealing the weekend), the financial engineering that manipulates markets and even the books of entire economies as we recently learned about Goldman Sachs and Greece. What country or state will pop up next as problematic?

Add to this, an increasing world population and technology that continues to advance and the world might arguably need fewer workers today and in the future. There is too little discussion and proposed solutions in the crossover from the old economy that is still shedding jobs and the new economy that doesn’t create them fast enough. With the most recent announcement Microsoft will have now shed 1/5 of its workforce in recent years. What if our thinking and conversations about the economy and jobs are antiquated. When our ready made patterned solutions don’t seem to be working maybe it is time for change, time to invent new patterns. Making things visible and having a different conversation would be a great start.

Confronting reality is also needed. If we aren’t looking at real employment numbers for the unemployed, under-employed, and those that are super-employed working too many hours, then we really can’t have an meaningful adult conversation about what might be required to improve the plight for the residents of a nation.

Imagine if the U.S. census utilized the same land-line telephone survey methods that the BLS uses for arriving at unemployment numbers. It would be wholly inadequate and it would actually violate the constitution that requires an accurate census every 10 years. See how the census works. I would not be shocked if the many cogs in the BLS machine felt this inadequacy, but lack the courage to sound the alarm, for fear they too, will join the ranks of those they presume to measure.

If, as a nation, we can include all people in a census, file taxes electronically, manage social security and a host of other big government data challenges, then can’t we also design and implement a meaningful index to measure the prosperity of a nation’s inhabitants. Of course we can. This is a solvable problem; it isn’t the equivalent of “jumping to the moon under your own power.”

GDP and corporate profits can be up and to the right, while at the same time, those that helped it get that way may experience personal decline in terms of real wages, household wealth, and overall prosperity.

Aggregate GDP and UI numbers roll up from individual human inhabitants that reside within a nations borders. Local governments and state governments have a easier problem to solve – the borders are simply smaller. A sorely needed innovation in government is the roll-up of meaningful numbers from households, to neighborhoods, to cities, to states, to regions, to countries. This isn’t unique to the United States.

The Legatum Index is a move in the correct direction. The Legatum Institute’s signature annual publication is the Legatum Prosperity Index™, a unique global assessment of national prosperity based on both wealth and well being. This Index is the main vehicle through which the foundations of prosperity are explored. The Index ranks countries based on their performance in eight sub‐indices, including Entrepreneurship & Opportunity, Governance, Personal Freedom, Health, and Social Capital. While not working from the individual level, it does at least take into account a multitude of factors when looking at the comparative prosperity of populations. Learn more about their fine work here or watch the video.

With respect to jobs, the jobless recovery, and all things employment, we’ve returned to an era of noxious air. But, the bad air in play today isn’t from rotting organic matter as it was in Miasma theory.

Rather, it is from politicians and economic royalists that have much to protect by ignoring our current collective reality and instead protecting a system that primarily benefits them at all costs.

When we start measuring human prosperity we can then put in place policies that help increase that prosperity. It is a bit reminiscent of the Declaration of Independence and the “people first” reforms of the Roosevelt era.

In the current political climate I wouldn’t hold your breath for such change, but meanwhile you might want to cover your nose. If this article resonates with you, please share it with other on behalf of the many that remain silent and invisible.

about the author

Gregory Olson is the author of The Experience Design Blueprint, a book about designing better experiences and then making them come true.  As discussed in Chapter 14 of The Experience Design Blueprint, the world of work has changed. And, it is not coming back as we knew it. In this chapter, there is prescriptive guidance for:

  • large businesses
  • established small businesses
  • retirees and volunteers
  • underemployed
  • unemployed
  • Congress and other policy makers
  • and co-working spaces everywhere.

His 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 image of Greg-Olson-Managing Director of Delightability and author of Experience Design BLUEPRINThumans. Chapters in L’ impossipreneurs that pertain to this article include Ch 5: Wealth and Economy and Ch 12: World of Work.

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.