Tuesday, June 26, 2012

Facebook's obvious disregard for stakeholders

Companies today seek to align their focus on all five of their stakeholders in order to position themselves for long-term competitive advantage.

Facebook, however, appears to be disinterested in stakeholder alignment.

You've already heard about, or have been involved in, Facebook's IPO debacle. Some fault for that fiasco rests outside of Facebook, but much of it rests inside. In mid-May, the stock was expected to trade at $38. It was higher than that for a short time on opening day but has been nowhere near $38 since. The stock has risen in the last two weeks, closing yesterday at $32.06, down 16% from IPO price. However, even as the stock trends upward, Facebook and its investment banks are being sued by dozens of shareholders who allege that financial forecasts for Facebook were cut prior to the IPO but the change was not publicized. 

Facebook contends it did nothing illegal with regard to changing its forecasts or how it announced the changes. Companies truly concerned with stakeholder alignment care when their stakeholders, including shareholders, are angry and feel cheated. Facebook has shown it does not care, as long as what it did was legal. Shareholders don't care much about the touchy-feely side of business, as long as they are making money. However, since they are obviously not making money, they will scrutinize (and sue!) Facebook until they are compensated and do not feel duped.

Duped investors are not the foundation of long-term success. 

On to the next action that shows Facebook's blatant disregard for its stakeholders...

Yesterday, Facebook changed its users/customers' email addresses to the ones Facebook created for them. In 2010, Facebook introduced its own email service but it was not widely used. Yesterday, without any notification to its users, Facebook changed users' profiles to have their Facebook-created-whether-you-want-it-or-not email address as the primary email on the account. They did not change the way they reach users, just the way users could reach each other.

Facebook's customers do not want another email account and they certainly do not want Facebook changing their accounts without notification. In response to the outrage yesterday, Facebook did not explain or even admit to altering the default account settings. Facebook has made similar changes to accounts without notification. They continue to show lack of respect for their customers.

What Facebook should recognize is: they need its stakeholders more than we need Facebook.

Investors can make money elsewhere and users can be in touch with friends on other sites, and most are. If Facebook continues to show disregard for its investors and users, two primary stakeholders, they will erode the trust necessary for long-term sustainability. If Facebook continues to dupe investors and users, another social site can take its place. Get ready, that's what is likely to happen.

Wednesday, June 20, 2012

Nine Nanas give new meaning to the term "drive-by"

It just doesn't get more All-In than this! There's no need for me to rewrite an already lovely story. Please click the link below and enjoy proof that the world is good. When it's more common to hear about crimes and mistakes, this story will remind you of the good business leaders.

It Ain't Over: The Business 9 Women Kept A Secret For Three Decades

How the Nine Nanas are All-In: 
  1. They kept it a secret for more than 30 years--doing good without seeking credit 
  2. Now that the secret is out, they've invited others in, instead of keeping the credit to themselves " 
  3. They seek opportunities to make others happy (All-In strategy #3: Notice Others) 
  4. They trade jobs, depending on who feels like doing what--no egos tied to the jobs! 
  5. They work as a team united in one goal: to make others happy 

How could you bring a little of the Nine Nanas to your workplace? (Well, you could start by ordering their pound cake from the site below. Have it delivered to the office and use the opportunity to tell your team about these remarkable women.)

Imagine a workplace full of selfless people united in one goal. It can be done!

Wednesday, June 13, 2012

Killing your customers is bad for business

Aftermath of the rental car crash in which two sisters died
More than two years ago, a story about two sisters killed because their Enterprise rental car had been recalled but had not been repaired was in the news. A jury awarded the girls' family $15 million. Enterprise, the nation's largest rental car company, suffered a brief blow to their public relations when the award was publicized but the death of the two girls did not prompt changes to rental car company practices.

They still rent and sell cars without fixing safety recalls. 

What kind of corporate culture exists within the rental companies that continue to rent unsafe cars? 

When companies are willing to risk the lives of their customers, the message is clear: your money is more valuable than your life. How long can companies who risk their customers' lives stay in business? How long will people continue doing business with companies that show such disrespect and lack of trustworthiness?

If they are willing to risk the lives of their customers, what do you think their internal corporate culture is like? It would be reasonable to infer lack of respect for employees is inherent in those cultures too.

This is an example of companies putting one stakeholder--investors--above the rest. Customers have died, yet significant changes have not taken place in the industry. 

There is something wrong with an industry that refuses to keep its customers safe. There is something wrong with companies who refuse to honor safety recalls until their customers find out about it. At some point, customer trust will be eroded beyond repair. Where will the industry be then? Which companies will remain?

Senator Boxer is asking the rental car companies to pledge "a permanent commitment to not rent out or sell any vehicles under safety recall until the defect has been remedied." Hertz agreed to sign the Senator's pledge but other companies have not. Enterprise has not, saying they already have such a practice in place (but it allows for the sale of unrepaired cars to be sold wholesale). No word yet on whether Avis or Dollar Thrifty will join the pledge.  (SOURCE: USAToday article)

Senator Boxer is drafting legislation to force the rental car companies to repair cars recalled for safety. That such legislation is needed is pitiful.

Customer lives don't matter to some of the companies, but their wallets do. 

What can you do?
  1. Find out your rental car company's policy on safety recalls. If they do not honor the recalls, switch.
  2. If your employer rents from one that does not honor recalls, switch. 
  3. If you are responsible for your employer's selection of a rental car company, investigate this immediately. You may be inadvertently putting your coworkers at risk, and the company along with it. 
  4. Spread the word about this issue to frequent traveling friends and colleagues. They might assume rental cars are repaired and would appreciate learning the truth.
  5. If you work in one of the companies, address this internally. Assess the culture of distrust created and work to rebuild trust with your customers and employees. Realign the focus on all stakeholders, not just investors. Investors won't be happy when customers refuse to trust you, so realigning focus will benefit all stakeholders.
As an employee and customer, put your money where your trust is by showing the rental car companies that killing customers is bad for business.

If your company needs help with stakeholder alignment, please call Kelly Tyler. She will share a diagnostic tool to aid your effort and could save the company from losing customers, employees, and investors.

Monday, June 11, 2012

Challenges reveal character of individuals and teams

They say challenges build character. I have often said that challenges reveal character too. When faced with a challenge you find out what you're really made of. When a team faces a challenge, it finds out what it's made of too. 

When obstacles are in front of your workplace, department, or teams, what is the response? Do people rally together quickly and vow to beat the barrier to success? Or do you see more time spent on blaming others for causing the obstacles? Or, are there excuses? Blame and excuses keep people and teams stagnant--with no chance of rising above any challenges.

As a teammate or team leader, you play a part in getting the team to beat the challenge.

A terrific example was on Good Morning America early today. Watch how this team, who works closely every day on live television, handled a major life challenge. What does your team have in common with this one? Would your teammates rally like this?

Not many would.

The teams that reach this level of emotional connection, respect, and trust are All-In. They are the ones that will be most successful. What part do you play as the teammate or team leader?