It is heartbreaking and sometimes catastrophic when a small business owner experiences internal fraud and/or betrayal by employees. It is not always possible to prevent internal theft or employees going rogue if they are on that penchant path. It is possible, however, to limit the damage with the right company platform and reasonable controls. Now let me state up front that our company is not perfect and in fact experienced a betrayal recently. Life in an entrepreneur world can be interesting indeed. In spite of defalcations in our rear view mirror, we choose the high road.
The high road begins with culture. Here are three points to make on this:
1) Hire for culture fit first
How well is your culture defined? You are welcome to view our company purpose and principles as they are posted on our website as well on the wall of my office for the world to see. This is the start. I suspect most companies will include a statement of honesty and integrity as one of the principles (number one in ours).
Writing them is one thing, walking them is another. The employees of the company cannot be expected to live the culture when top leaders demonstrate otherwise. Here is a common example. Will your staff lie on your behalf? Recently I was trying to connect with an individual who seemed interested in our business after meeting at a casual networking event. After assuring me he was in the office, the receptionist came back on the phone saying otherwise and it seemed evident from the tone she was being less than truthful. It was a financial services firm. Would you trust your finances to a company whose front line person is not trustworthy?
Several years ago our main service included lead generation. I was contacted by a well-known and high level management consulting firm for the possibility of augmenting their callers as they were having difficulty keeping up. On my initial (and only) visit to their headquarters the CEO asked me to sit in on some calls made by their lead call manager to get a flavor of their approach. I listened with a dual headset and observed his success in making a few appointments during the few minutes of monitoring. The software was impressive (way ahead of ours at the time) with instant web page popups of the contacts he was speaking to as well as other features. But here is the thing, he lied! He was calling companies in a particular Dallas, Texas zip code using a fictitious name and stating he was going to be in the area the next day visiting the business down the street (another automatic popup) and he just wanted to drop in for a visit. It was a soft casual approach and often the decision maker agreed and the leads were then forwarded to one or more salespeople on the ground there. I congratulated him on his good work (yes, I was also less than truthful because I wanted to puke) as I felt it was inappropriate to criticize during an initial visit. Now here is a management consulting firm requiring an intimate relationship to assist clients with so called best practices lying to get an initial appointment. My attempts for a follow up appointment did not materialize. I knew we were not going to serve the account even if offered but I did want to vent my feelings privately with the CEO. Had this meeting occurred I might not be sharing this story.
One more example I have to share as it just occurred just this week. I received a call from a so-called “ethical organization” of member companies that will remain nameless (their logo includes 3 letters) trying to encourage my company membership as they have been for years. I told the caller I could not see the need. They followed up with an email letter including the words, “Recently, we have received 20 requests for information about your business.” Our Marketing Director contacted them for more specifics which they indicated were unavailable. I shared the letter with the members of the Ethical Business Committee I chair; low and behold another member received the exact same letter including the same ’20 requests’. Coincidence? Perhaps, yet I am guessing the organization is more interested in membership fees than truth.
2) Consider Open-Book Accounting
Jack Stack is the master at this (read his book, “The Great Game of Business”) and built an enormous empire from this approach. Here are some benefits to your company in allowing the numbers away from the breast –
a) It puts many more eyes on the financials other than just you and your CFO. i.e. many more “watch dogs” protecting the field so to speak.
b) It motivates the staff allowing them to feel, act and participate in company affairs more intimately.
c) It teaches the staff entrepreneurship ultimately resulting in “out of the box” creativity and perhaps new business expansion (read Jack’s book!).
d) It forces us (so called) business owners to act more like stewards for best practices as opposed to the desire for a personal piggy bank (who needs a yacht?)
Bo Burlingham (author of “Small Giants” and “Finish Big”) has told me that no other component, in his 30+ year study experience, has had a greater positive impact on a business than this one!
3) Install a Culture of Ethics in the Company
Do you have a written “ethical policy guideline” in your organization? More importantly, can every leader in the company hand a copy of this policy guideline to any employee, put their name to it and look the employee in the eye?
READ MORE: If you like this article, you will want to read: “The Battle of Disruption.”