Organizational Development

What Contingent Liabilities are Your Employees Causing

What Contingent Liabilities are Your Employees Causing?

Rogue behavior costing $36 billion in legal bills since the financial crisis should give every Board member and Executive sleepless nights. Then add the cost to hire significant compliance and security management and staff to curb rogue behavior, and some serious questions need to be asked!

  1. What part does pressure to chase profitability encourage a greater level of risk to be taken?
  2. How much risk is the business willing to take? And at what level does risk become reckless?
  3. Is the level of inter-staff competitiveness so great that irresponsible risk is encouraged?
  4. How vigilant are those in leadership to the impact of pressure on employees?

Working in an environment pressurized to succeed at all costs, tends to be the norm, especially in the Financial Sector. Just look at Wells Fargo. Whilst taking risk is a legitimate part of building a successful business and keeping ahead of the competition, when pressure and risk collide it can quickly become a weapon in the wrong hands. Unable to balance risk under pressure to achieve results, the line becomes blurred between acceptable business practices and legal or moral improprieties.

Even more alarming, is when Boards and senior executives fail to acknowledge the environments that promote rogue behavior simply to increase profits. It could be argued that they are as culpable as the rogue employee. Daniel Kahneman, in his book Thinking Fast and Slow, says “we can be blind to the obvious, and we are also blind to our blindness.”

Prosecutions and regulatory enforcement stemming from noncompliance related to employee behavior such as corruption, bribery, rogue trading and insider trading are on the rise around the world. In fiscal 2015, the SEC filed nearly 7% more cases over the prior year, meting out $4.2 billion in sanctions.

People are hired for their talent but little attention is paid to their inherent personality. So when an individual is placed under significant pressure or pushed to take excessive risks, their behavior can turn rogue. The good news? When pressure and risk collide can now be predicted.

Using behavioral insights, management can dynamically match employees with specific environmental conditions to determine their potential response to risk and pressure. They can also discern the degree to which such responses could create rogue behavior and negative actions towards the business.

It is no longer enough to simply look at emails, computer keystrokes, outside influences, sick records etc. – the old hat of international espionage and anti-terrorist tools. What should be clearly understood is that the rogue employee is a human being, that when placed under significant pressure to achieve, will take risks.

The question to Boards and Executives is – do you know your employees?

What corporate entities have in their corner is direct and immediate access to their own personnel from top to bottom and every department – including even outside partners and vendors. So the solution is the deployment of a validated personality discovery process, providing hidden insights and a reliable prediction of where security or compliance risks exist.
Based on external research, employees with the following measurable behavioral traits are more likely to engage in rogue behavior when emotionally triggered

  1. An inventive mind, full of ground-breaking ideas turns their thoughts to curious and devious thinking when, as an example; many of their ideas are rejected.
  2. A go-getting, determined person, driven to success at any cost; begins to cut corners, as a toxic competitive streak takes over.
  3. A reticent, uncommunicative, taciturn minded person normally just seen as the quiet one’ begins to hold onto key information that others need, simply because they have taken offense over something trivial.
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DNA Behavior International’s validated system gets below the surface to reveal behaviors that, if not managed, can lead to ruinous behavior.
The Unique DNA Behavior Approach is able to Score, Filter, and Prioritize Employee Personality Insights.

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Which Employee is Your Molotov Cocktail

Which Employee is Your Molotov Cocktail?

Potentially 5% of your workforce includes employees that are a high-security risk. The cost of all types of fraud is a staggering 5% of turnover, per the 2014 Global Fraud Study by the Association of Certified Fraud Examiners (ACFE.) So, what’s the cost of rogue employee behavior to your business? Simply identifying the personality type most likely to cross the line and the triggers that push them there could save you big dollars and your reputation. Or better yet, how do you help an employee to align their strengths to a given role and avoid rogue behavior altogether?

While larger businesses are investing more in cyber security and other monitoring programs, virtually nothing is being put towards identifying and monitoring costly employee behavior risks. The problem is that many of these insider threats are already in your business and the situation is gaining momentum without anyone being the wiser. The Global State of Information Security Survey 2015 recommends that 23% of the annual spend on business security should be directed to behavioral profiling and monitoring of employees.

Research shows that the following problems are caused by human behavior:

  • Combinations of human behavioral factor outliers and external environmental factors (e.g. financial difficulty) trigger emotions causing negative behavior toward the company.
  • Combinations of employees with too similar or too different styles working in a high-risk environment cause internal control issues.

Which Employee is Your Molotov Cocktail

The solution is the deployment of a validated personality discovery process, providing insights to hidden, hard-wired traits and a reliable prediction of where security or compliance risks exist. Based on external research, employees with the following measurable behavioral traits are more likely to engage in rogue behavior when emotionally triggered:

  1. Innovative – bright mind, which turns into curious and devious thinking
  2. Ambitious – desire for success, leading to cutting corners
  3. Secretive – working under cover and not revealing key information

The reality is that any person with a weak or temporarily broken character in the wrong team or facing external pressure can make flawed decisions and therefore, become the source of costly negative behavior. The employee behavior review using personality assessment methodologies should be uniformly applied to every employee in the business from the top down to distill the “hot spot” areas. The high performing leaders down through the sales and operations teams to the disgruntled bookkeeper are not exempt – New hires, or old guard, every last one. You only have to look at the recent headlines regarding Wells Fargo, Volkswagen, and JP Morgan. I am regularly seeing it in the financial services industry and the privately held businesses with whom we partner.

Which Employee is Your Molotov Cocktail2

Using behavioral insights, management can dynamically match employees with specific environmental conditions to determine their potential response. They can also discern the degree to which such responses could create rogue behavior and negative actions towards the business. Lastly, management can apply these insights towards talent re-allocation, employee evaluation, team development and improved hiring processes.

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Dysfunctional Boardroom Behavior – 5 Steps to Manage

A dysfunctional board of directors can cause multiple challenges for any organization.
Industry leaders, celebrities, and subject experts often make up Boards. Many of these individuals are not accustomed to having their opinions challenged. So while they may add credibility, there’re not always a mutual fit.

Dysfunction arises when:

  • Individual behaviors, cognitive biases, decision-making styles and communication styles are not in sync.
  • Decisions are inconsistent or simply not made.
  • Board members have conflicting agendas.
  • There is lack of leadership from the Chair, no mutual respect and lack of trust.
  • Individuals react inappropriately under pressure.
  • Boardroom bullies are not managed or members just sit back and watch.

A 2009 Gallup Research paper revealed a 70% productivity gain when groups of people working together understood and were able to close the behavior performance gap. This study holds true today.

Every board plays an integral role in the success of the organization. When Board members are dysfunctional and not engaged, the flow on to the organization can be significant.

5 Steps to managing boardroom behavior.

  1. Commit to being behaviorally smart in the boardroom.
  2. Use a validated natural discovery process to assess key personality traits.
  3. Use the outcomes to build a balanced relationship between all players.
  4. Appoint a highly skilled facilitator to work with individual directors to understand communication and behavioral styles.
  5. Commit to building a culture of understanding, acceptance, and respect.

Understanding different personalities can lead to better decision-making. Directors cannot fulfill their responsibilities in a boardroom where a few dysfunctional members are allowed to control the meeting or obstruct board decision-making.

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Maximizing Organizational Potential Through Learning

In his 1990 book The Fifth Discipline, Peter Senge coined the term learning organization: “Organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free and where people are continually learning to see the whole together.”

Today, building a learning culture seems to be a greater organizational requirement than ever, yet most are not prepared for their learning and development needs. PwCs 2015 Global CEO Survey of 1,409 CEOs in 83 countries found that 75% felt a skilled, educated and adaptable workforce should be a priority, but 72% were concerned about the availability of the key skills their companies needed. Furthermore, Deloittes 2015 Global Human Capital Trends, incorporating data from 3,300 business and HR leaders in 106 countries, reported that 85% thought learning was “important” or “very important”, yet only 40% were “ready” or “very ready” to build a learning culture.

How then does an organization build learning into its culture? It starts with CEO commitment. And CEOs, in turn empower CHROs and Chief Learning Officers, who become key leaders for fostering learning at all organizational levels. As Senge observed: “Organizations learn only through individuals who learn. Individual learning does not guarantee organizational learning. But without it no organizational learning occurs.”

CHROs and CLOs implement procedures, platforms and products to create an organizational learning ecosystem. The most common form of learning is “on-the-job” and generally means solving problems associated with work. Good leaders promote on-the-job learning opportunities and make time in employees schedules for them. They provide readily available tools. Research shows that “formalized informal” learning programs like on-demand training, coaching and performance support tools, including digital courses and mobile apps, outperform more “formal” learning like lectures. In this ecosystem, content, programs and experts are easily accessible to guide employees to quickly learn. Training often succeeds best in small, easy-to-use and easy to find chunks of content.

Learning is a strategic lever that can change how employees think and act. One of our clients illustrates how well this can work. Our client found that time spent in meetings was significantly reducing productivity. Meetings accounted for 40% of time at work, but 28% were deemed not really necessary, start and stop times were not well managed (55%), and the goal often not achieved (47%).

The identified problem of meeting inefficiency led to a targeted learning approach. All employees, including the CEO and division heads, learned best practices for meetings through an intranet based digital course, comprised of three 30-minute sessions. The results were dramatic, with a very significant improvement in the organizations meeting culture. More impressively, the results continued to improve and were greater a year later. Compared to pre-course levels, 45% increased their usage of agendas, 41% increased their attendance of meeting that were absolutely necessary, 38% more started and ending on time and 29% increased their achievement of meeting objectives. The culture shifted because senior management engaged with employees; they identified a problem, and addressed it through learning.

The meeting management program utilized an external expert solution. Internal sources are also critical. For example, a directory of internal “experts” enables the organization to deploy employee skills and experience in person-to-person learning. Systems can efficiently match the organizations experts with those needing expertise. Additional learning tools are made readily available, such as digital courses, apps and internal social networks. Operating procedures are designed to encourage and reward the interactions.

Measurement assures that learning resources are targeted and effective. In our meeting management example, survey data identified an efficiency waiting to happen. The learning program unleashed this opportunity. Its efficacy was measured shortly afterwards and then in a year, proving the programs value.

The U.S. military, the largest learning organization on Earth, teaches us that the best organizational and individual learning often occurs following mistakes. After every maneuver, there is an “after-action review”. This formal process made the team understand what worked, what didnt and what needed to change in order to improve.

Company-specific learning is one of the strongest contributors to employee engagement and retention, as described in a “Journal of Applied Psychology” 2013 study and related data from Deloitte University. Those companies that committed more training hours and funds per employee become more efficient and effective, delivering significantly higher customer service, innovation and alignment with business strategy. As Senge understood, when your company is a learning organization you expand your capacity to create the results you desire.

Are You Killing Productivity And Creativity

Are You Killing Productivity And Creativity?

I work with and coach many leaders and teams. Although each team is unique, there are some common themes I see as performance and productivity blockages.

Are you suffering from one of these?

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1. You have to be good at everything. There are many smart, good people I talk with, who can’t admit that they aren’t perfect, or still believe they should be. Perfection is outdated and unattainable. Trying to be good at everything should be too. Plus, it will only highlight and put focus on tasks and skills where you are NOT so good. As a leader, stop expecting people to be good at everything. For example, few people walk the earth who are great at being both detail/task-oriented and engaging with people. Consider realigning tasks to people based upon their natural strengths. In the end, the team will get more done with less stress.

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2. Your way is the best way. If everyone was like you, your value would be diminished and the team would suffer from a huge blind spot. Instead, focus more on the goal and you’ll realize that the team will accomplish more. You’ll also look smarter and increase your influence by being able to see your teammates as valuable assets, even if they think and act differently, than your way of operating.

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3. You’re constantly aware of teammate’s imperfections and wish they would change their ways. Stop thinking that the other person is who needs to change. You can positively influence behavior by trying to understand the other person’s point of view, their strengths and how they are motivated.

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Want to learn more about how to identify and capitalize on the different strengths of your team members? Check out our Business DNA Website or contact us at inquires@dnabehavior.com.

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Who’s Currently Atlanta’s Greatest Business Leader?

There are not many business leaders out there who are truly great – leaders that inspire, you can look up to, and immediately trust.

It is not easy to discover your purpose in life, and then, at all times, live it. Today, I was fortunate to meet Dan Cathy, the CEO of Chick-fil-A, an iconic Georgia headquartered business. I fully admire Dan because for his defined life of meaning, and who lives it authentically, every day – a rarity in our age. Not just lip service; he lives it in a very real way.

Dan Cathy

When asked how Dan defines success, his response was, “being the best you can be as a person.” He continued by articulating how every aspect of what he does is measurable, whether it is from how Chick-fil-A is run, to community giving, his family and health. To lead others successfully not only do you emotionally engage them but you must be centered and balanced yourself. This is very important in order for others to trust you. So many leaders fail because they live in a falsehood and are not trustworthy.
A key dimension I see in Dan is his commitment to the development of Atlanta’s community, particularly the Westside area. While central to Atlanta, it is one of the poorest. And while there is a celebration of the great wealth being created in Atlanta, Dan is determined to use it to remove social inequity. The development of the Westside area will be a symbol of this change. Otherwise, Atlanta could become more like a Baltimore.

I have learned my leadership lessons from Lee Ellis, another great Atlanta leader in the same level of authenticity as Dan Cathy. The principles I look for in a leader I learned by reading Lee’s book “Leading with Honor“.

Lee Ellis

I would be interested in your views of great leaders anywhere in the world and why.