Organizational Behavior

Predicting company misconduct before it even happens … really?

Phillip Nones Business, Employment, Government, Human Resources, Social Commentary , , , , ,

Researchers from the Harvard and Tilburg Business Schools think they’ve found a method to do just that.

One of the research techniques that has sprung up in the era of online engagement and interactivity is “mining” reader comments — then analyzing the granular data to discern their wider implications for companies and brands.

One way this happens is by analyzing the words that employees use to describe their own companies on review sites. Doing so can provide clues as to what’s going on inside these companies that others can’t discovers based on forward-facing reporting about the organizations in the business or news press.

Underscoring this point, a study conducted jointly by researchers at Harvard Business School and the Tilburg School of Economics and Management in The Netherlands has found that such information extracted from employee-review websites like Glassdoor.com is helpful in being able to predict potential misconduct beyond other observable factors such as a firm’s financial performance and  industry risk analysis.

The correlating factors revolve around employee observations concerning the environments in which they work – factors like:

  • Company culture
  • Company operations
  • Control practices
  • Performance pressures

Negative or critical comments made within these broad categories contribute to weighing the risk for corporate misconduct.  Business management professor Dennis Campbell of the Harvard Business School notes that the “tone at the bottom” revealed by such comments can be a good early-warning signal of potential misconduct.

“Our theory is that what leads people to commit misconduct is actually the environment they are in,” adds Ruidi Shang, the Tilburg professor heading up the research team.

The Harvard/Tilburg study sifted through information from anonymous reviews of publicly traded U.S. companies that had been posted on Glassdoor.com over a nine-year period between 2008 and 2017.  Focusing on nearly 1,500 companies that had been the subject of ten or more review entries each over the period, by comparing keywords in the comments to actual corporate misconduct cases brought against public U.S. firms over the same period, direct correlations were found between the statements and the companies that were later found guilty of misconduct.

The researchers discovered that certain terms and phrases used by employees in their comments correlate highly to misconduct cases – terms like bureaucracy, compliance, favoritism, harassment, hostile and strict.  Such terms came up disproportionately more frequently in the discussions and comments.

Of course, such analyses are rough measures at best.  Because the researchers drew comparisons between the comments and the corporate misconduct based only on cases that the U.S. government pursued, the methodology would have missed misconduct wasn’t known (or pursued) by the government.  But as for providing “directional indicators,” the methodology seems to be a valid approach. I think we could see it being employed by Wall Street analysts as part of efforts to predict threats to future financial performance – and other potential problems — based on what the granular data reveals.

More details on the study and its findings can be read in this report.

Re-imagining the rules for company leadership: Rajeev Peshawaria’s prescriptions.

Phillip Nones Business, Employment, Human Resources, Social Commentary , , , , ,

As the nature of how companies do business changes, what about time-honored managerial styles? Do they need to change as well?

Open Source Leadership is a newly published book by business author former Coca-Cola and Morgan Stanley executive and Rajeev Peshawaria.  Published by McGraw-Hill, Peshawaria’s book contends that many of the many management practices that persist today are no longer well-aligned with the reality of current workplaces, current employees … or even society in general.

One fundamental change that has happened just in the past generation is what Preshawaria labels “uber-connectivity.” Thanks to the Internet, mobile phones and other communication technologies, people are able to access information on nearly any topic and obtain answers to any question — wherever they are and whenever they want.

According to the author, this near-limitless access to information empowers people to an unprecedented degree – and it narrows the gulf between “experts” and “regular folks.”

As for “guru-worship” – the inclination of at least some people to seek out and learn from the soothsayers in the business world … that’s yesterday’s bread.

Lest Peshawaria be accused of being what he himself declares irrelevant, he remarks, “The guru is dead. Long live the Google.”

Rajeev Peshawaria

Couple uber-connectivity with increasing world population plus the concentration of that population in urban areas, and the result is companies that are now able to source talent and knowledge from wherever they exist.

How do these changes affect the theory and practice of business management?

In Peshawaria’s view, company leaders are still called upon to provide steadfast leadership about “purpose and values,” while at the same time acting with “compassion, humility and respect for people.”

Some of this may sound something like the “autocratic” management style that was prevalent in business until the 1980s – but not exactly. At the same time, it’s different from the “all-inclusive” democratic style that became ascendant in the world of business during the past three decades.  Let’s call it a hybrid.

One other important factor addressed by Peshawaria in his book is that employee motivation remains a nettlesome issue for companies – and far more complex than most management theories and stratagems account for.

One prescription from Peshawaria is for managers to dump the notion of giving “stretch goals” to all employees in an attempt to foster high performance. He argues that stretch goals work only for “the small percentage of employees [who] have the creativity, innovation and drive to truly relish and achieve stretch goals at any one point in time.”

According to Peshawaria, for the majority of employees stretch goals end up “causing stress, anxiety, or poorly thought-out behavior.”

Open Source Leadership is a book that’s worth a read – and it’s readily available from Amazon and other online retailers.  For those who have read about Rajeev Peshawaria’s theories in this new book or in his earlier volume Too Many Bosses, Too Few Leaders – or if you have years of experience working in business organizations, what do you think about the author’s perspectives and prescriptions?  Are they on point … or off-base?  Please share your views with other readers.

What Social Media is Teaching Us (Again)

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Social MediaSocial media – Facebook, Twitter, LinkedIn, blogs and all that – burst onto the scene only a few years ago. Because of this, we’re still learning daily how these tools are impacting and influencing attitudes about companies and brands … as well as the propensity for people to buy products and services as a result.

But some aspects are coming into pretty strong focus now. One of the interesting insights I’ve drawn from social media is that it spotlights the “disconnect” that exists between marketing and sales personnel.

This disconnect has existed for decades, of course. In my nearly 35 years in business, I’ve heard a common refrain from sales folks. It goes something like this: “I have no idea what those people in marketing do all day long!”

On the flip side, the marketing pros have a few choice words for the sales personnel as well: “All they ever think about is the next order. Unless it delivers instant hot prospects who are ready to buy immediately, they’re not interested in any of our marketing programs.”

This is why so many B-to-B companies have tried to cross-pollinate between marketing and sales by moving staff back and forth between the two areas.

But what company is inclined to gives up its star sales performers to marketing? What happens more often is that the underperforming sales people are the ones who end up in marketing … where they then achieve only middling success there as well.

Conversely, so many of the best sales performers aren’t “God’s gift to strategic thinking” at all … while the marketing people who are so creative and insightful when thinking about markets are woefully inadequate when it comes to keeping up with a Rolodex® full of dozens of sales contacts.

Another part of the problem is the approach to metrics. Marketing personnel have historically been focused on reaching wider audiences. To a salesperson, things like “creating awareness” and “building a brand” are frustratingly fuzzy. Instead, salespeople focus on individual customers, sales quotas and other quantifiable information – real “bottom line” figures.

Today, social media is bringing all of this into sharper relief. To be most effective, social media demand that marketing and sales personnel work together. It’s no longer possible for the two groups to employ different approaches, different interactions and different metrics for success.

To my view, it’s going to be harder for marketing and communications personnel to get their heads around new expectations for metrics and analyses when compared to the sales folks. There are many new analytical tools to be mastered – and that’s probably a source of fear for many a marketer.

For salespeople, who live and die by facts and figures, this is duck soup by comparison.

And if you really think about social media, it’s about audience (customer) engagement in a direct and personal manner. Who’s been doing that for years? The sales force, of course.

So does it make any sense to “silo” social media activity and content development within the marketing department? Generally speaking, no.

In fact, many sales personnel have already embraced social media activities because they see it as another useful tool to leverage customer engagement. This is an environment they already know well, because they’ve always been in the business of building relationships.

So the times demand that marketing and sales team up as never before. For marketers, that means opening up the social media initiative and structuring it to include sales personnel as well the marketing staff. Redlining these tasks won’t work.

And here’s another idea: Have the marketing staff hang around with the sales force. Put them out there at trade shows and other industry events where they are forced interact with customers and behave like … salespeople!

[This is especially true if a company’s marketing staff comes from collegiate or administrative backgrounds – a common weakness in many mid-sized B-to-B firms where the most lucrative upward career paths take employees through engineering, R&D or sales, not through marketing and communications.]

Social media reminds us, once again, that the key to success in business is “mixing it up” with customers and prospects. We need to make sure we do the same inside our own companies.

This just in: The organization stinks. Now, what are you going to do about it?

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I Hate People BookI’m in the midst of reading an interesting book with a provocative title: “I Hate People!: Kick Loose from the Overbearing and Underhanded Jerks at Work and Get What You Want Out of Your Job.” (Little, Brown Publishing, ISBN-10: 0316032298 … also available in a Kindle edition.)

I think this book takes some risks. It certainly bursts a few bubbles in the conventional thinking about organizations and how they work. If you read it, be prepared to discard some of those platitudinous notions about shared mission and vision, organizational behavior, teamwork, matrix management and all the rest.

Coauthored by Jonathan Littman and Marc Hershon, this book fearlessly tackles the thing many workers know but are afraid to say out loud: Every day they come in the office, people have to deal with colleagues who exhibit a host of traits they frankly can’t stand.

We’re well familiar with the types … and Littman and Hershon give us catchy names to describe them, such as:

“Stop Sign” — the person who always finds something wrong or unworkable with the latest idea/product/strategy/solution being proposed. (And isn’t it interesting how many of those issues would entail that person having to contribute a bit more time and effort of his or her own?)

“Switchblade” — be very careful of these people … they’re highly dangerous when you’re not looking!

“Happy Face” — you know, the folks who approach their work at the office the same way they circulate at a cocktail party or spend an evening at the country club.

Or “Time Waster” — there’s no explanation at all needed for this common specimen!

The idea of “teamwork” comes in for pointed criticism by the authors as well. In theory, teams are all about working together to achieve consensus and implement better programs or initiatives that everyone can support. Littman and Hershon remind us that too often, teams produce nothing more than mushy “group think.”

And the bigger the team, the more tepid the results. The authors contend that only a few team members carry their own weight; the others can get away easily with little more than just showing up at meetings. For this reason, we’re advised to join teams of no more than four or five people, where “hiding in plain sight” is far more difficult to pull off.

A good thing about this book is that instead of presenting a litany of problems and then just leaving the entrails on the floor, Littman and Hershon provide ideas for how to work around all of the mediocrity and the frustration. They sugggest practicing “solo-crafting.” What’s that? Basically, it’s taking it upon yourself to “just do it” rather than passing the buck or relying on others. Or, as the authors put it: Stop talking, stop acting, start doing.

The book is quick to point out that solo-crafting doesn’t mean becoming a loner or maverick. It also doesn’t mean becoming a peacock, screaming “Look at me, I’m so great!” — just the kind of person everyone loves to hate.

Instead, by accomplishing more while working within the orgnizational structure, Littman and Hershon contend that you’ll find yourself being recognized for your ability to actually accomplish what others simply give lip service to. And that will result in being asked to perform more key tasks, with more opportunity to be recognized and rewarded for a job well done. Solo, of course.