You don’t have to work hard to find information on scandals from organizations large and small. While hearing about a company’s issues can elicit different emotions, one universal thought is likely “Thank goodness that wasn’t us.” or the variation “Thank goodness that could never happen to us.” Surely, your Middle Market company isn’t doing anything scandalous. However, it’s important to remember no organization is completely bullet-proof.
Overt Scandalous Behavior
Certainly, there are companies throughout history who have been blatantly bending the rules. Or even flagrantly engaging in scandalous behavior. What can you learn from these organizations? First of all, don’t be like them. Next, take the lessons of how they were brought down and learn from them. Most importantly, make sure everyone in your company knows in explicit terms this type of behavior is not tolerated.
Use their examples to show exactly what not to do. Also, use their scandals to help build out your internal checks and balances systems. Next, take their mistakes to heart, to ensure you can’t be found guilty of the same things.
Hidden Scandalous Behavior
Sometimes certain people within the organization are problematic. Think about companies where someone has embezzled funds. It can be done directly from customers or through internal systems that allowed it. Sometimes, firms have employees who participate in nefarious activities outside of work. Or people who use the company in some manner to help a scandalous organization profit.
What can you learn from these examples? First of all, how important it is to fully vet and know your employees. So, make sure you run background checks. Take the time to do employment references. Never just hire someone to fill a position. Therefore, you need to learn trust your gut. Next, get to know your employees. Also, take interest in their outside activities and make sure you have a well-rounded picture of your employees. Obviously, you can’t spy on them, but don’t just assume you are a good judge of character either.
Again, implement measures that keep any one person or group from having unfettered access to tools, technology or finances. Lastly, ensure your internal review processes are updated to prevent someone from taking advantage.
Likely, the first two things we talked about will never really touch most organizations. What is more prolific and just as damaging are the accidental scandals. These can range from anything like someone being caught on camera or audio discussing private company issues. Or, a respected person bad-mouthing leadership or the organization. And, it could be someone just caught behaving poorly. There might be a security breach or inadvertent leaking or posting of customer information somewhere. Lastly, social media can be problematic. Just think of companies where a single employee has posted accidentally to a company page or has participated in unbecoming behavior online.
How does your Middle Market learn from these somewhat unforeseeable issues? First of all, by realizing even good companies with great intentions have suffered from these types of scandals. Next, putting safeguards in place to help prevent them. Also, make sure your security is updated, as robust as possible and customer information is kept separate from other services when possible. Lastly, develop, define and put into place a robust social media policy and monitoring process to help nip online scandals in the bud.
Lastly, remember that when a scandal occurs, some organizations have dealt with it quickly, effectively and have recovered. Others have responded poorly and been even further vilified because of their actions. By thinking of these situations and learning from past mistakes and successes, your Middle Market firm can help prepare for a successful and hopefully scandal free future.
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