A company doesn't have to do anything wrong to pay dearly for a disgruntled employee.
It costs about the same, or more, if the company actually does something wrong and gets called out by a disgruntled employee.
This week a disgruntled former executive director at Goldman Sachs submitted an op-ed piece to the New York Times....claiming the "environment" at Goldman Sachs is as "toxic and destructive as I have ever seen it." Greg Smith (no relation) joined GS right out of college and most recently was responsible for the company's U.S. equity derivatives business in Europe, the Middle East and Africa.
Diane Schwartz, my friend and PRNews Publisher and Blogger wrote yesterday, "what a 'get" for the New York Times, what a forum for Smith and what a HR and PR nightmare for Goldman Sachs."
Couldn't have summoned it up any better.
Except today, we now know that in just over 24-hours one disgruntled, former employee has cost Goldman Sachs about $2-billion in market value. The bank's shares plummeted 3.3 percent in trading Wednesday in the wake of the NYT's op ed article.
Now, it is important to remember that Goldman is not a "bank" the 99% keep their savings and checking accounts in. It is an investment bank that offers services to its clients that most of us could never afford nor understand.
There are some crisis management steps the company should be taking to reassure internal and external audiences that the former director was just an unhappy former employee -- if that is all there is to it.
However, the former banker and his venue, the New York Times, have left some bruises. He talked about the "decline in the firms moral fiber" and claims bank officials referred to their clients as "Muppet's"
Every organization, even mom and pop businesses, are subject to an unhappy employee now and then. The first thing good leaders must do is keep their door and ears open to those unhappy workers BEFORE they go public and try to fix the problems rather than force a potential trouble-maker out.
Thursday, March 15, 2012
A Bizarre Crisis
At the Institute for Crisis Management we maintain there are four types of crises you will experience at some time in your career.
1. Sudden Crises -- fires, explosions, natural disasters and workplace violence
2. Smoldering Crises -- two thirds of all crises are the smoldering type -- they start out small, usually internal, but not always, and they are the kind of things someone should recognize as a potential problem and either fix them or report it to someone who can. You can plan for both of these types and even if you can't prevent them, you can be prepared to minimize the damage of each type.
3. Perceptual Crises -- the classic example is the old Proctor & Gamble corporate logo that included a half-moon and some stars. Every few years someone would look at that logo and declare it was a symbol of devil worship and try to organize a boycott of P & G products.
4. The fourth crisis type we call the Bizarre Crisis. You cannot plan for nor anticipate a perceptual or bizarre crisis but you still have to manage them when they rear their ugly heads.
Today, there is a report from New York City about a bizarre crisis.
An 88-year-old woman was on her way to visit her daughter in another part of the city, and was on the escalator at the Long Island Railroad Lindenhurst Station when she fell and her clothes became entangled in the escalator mechanism and asphyxiated her.
You might argue that the Railroad should have anticipated such an accident, but it is still an unusual disruption and has already triggered negative national media attention and most certainly will result in a lawsuit.
1. Sudden Crises -- fires, explosions, natural disasters and workplace violence
2. Smoldering Crises -- two thirds of all crises are the smoldering type -- they start out small, usually internal, but not always, and they are the kind of things someone should recognize as a potential problem and either fix them or report it to someone who can. You can plan for both of these types and even if you can't prevent them, you can be prepared to minimize the damage of each type.
3. Perceptual Crises -- the classic example is the old Proctor & Gamble corporate logo that included a half-moon and some stars. Every few years someone would look at that logo and declare it was a symbol of devil worship and try to organize a boycott of P & G products.
4. The fourth crisis type we call the Bizarre Crisis. You cannot plan for nor anticipate a perceptual or bizarre crisis but you still have to manage them when they rear their ugly heads.
Today, there is a report from New York City about a bizarre crisis.
An 88-year-old woman was on her way to visit her daughter in another part of the city, and was on the escalator at the Long Island Railroad Lindenhurst Station when she fell and her clothes became entangled in the escalator mechanism and asphyxiated her.
You might argue that the Railroad should have anticipated such an accident, but it is still an unusual disruption and has already triggered negative national media attention and most certainly will result in a lawsuit.
Monday, March 12, 2012
It's Never Over 'til the Judge Sings
It's been five years since Seung-Hui Cho went on a killing rampage shooting 32 Virginia Tech students and faculty before killing himself.
And last week a jury was impaneled to hear testimony in a civil trial brought by parents of two victims. The two families allege in their "wrongful death" lawsuit that Tech administrators were slow to alert students of the first killing on campus and their lawyers painted a picture of campus police as "plodding" and inexperienced.
In their opening statements the plaintiffs' attorneys criticized school administrators for waiting more than two hours before warning the campus a gunman had already killed two women and was thought to be still on campus.
I can't think of a better example of how a mismanaged "crisis" can haunt an organization and its leadership for years.
Doing the right things from the beginning is often difficult, but failing to do the right things from the beginning costs more and costs more for a long time.
If Tech had an operational crisis plan in place, and had practiced with it, and also had a communication plan and practiced with it, this month's lawsuits might never have been filed, and some if not most of the victims would not have died that day.
And last week a jury was impaneled to hear testimony in a civil trial brought by parents of two victims. The two families allege in their "wrongful death" lawsuit that Tech administrators were slow to alert students of the first killing on campus and their lawyers painted a picture of campus police as "plodding" and inexperienced.
In their opening statements the plaintiffs' attorneys criticized school administrators for waiting more than two hours before warning the campus a gunman had already killed two women and was thought to be still on campus.
I can't think of a better example of how a mismanaged "crisis" can haunt an organization and its leadership for years.
Doing the right things from the beginning is often difficult, but failing to do the right things from the beginning costs more and costs more for a long time.
If Tech had an operational crisis plan in place, and had practiced with it, and also had a communication plan and practiced with it, this month's lawsuits might never have been filed, and some if not most of the victims would not have died that day.
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