We live and work in a brand economy, where marketing messages wrapped in ribbons of rhetoric blast the benefits of a product or service to fulfill alleged emotional but not necessarily physical needs.
As consumers, we want to be WOW-ed by service, price and value. As shareholders, we want to see returns on our investments, deep double digits preferred. And thus as employees, we get squeezed in the middle when senior management tap dances on Wall Street and on Main Street to serve the other two constituent audiences.
That squeeze gets even tighter when the tapping turns into tripping, and the big boys find themselves stumbling to sign off on corporate governance abuses that protect and defend the public side of the brand. Recent examples include Shell's little white lie to U.S. regulators about its big fat overbooking of oil reserves, the painful accounting probe of the assets of Computer Associates and, my personal favorite, the sexual discrimination pox at Merrill Lynch. The names of all of these multinational corporations are known around the world, and thus the scope of the public shaming becomes global in nature. The same media outlets that advertise these brands to the handpicked masses that make up their target audience now report on their scandalous, perhaps even criminal, ways.
Operational risk experts define these incidents as breaches of reputation as well as regulatory and legal risk. This rupture isn't a leaky faucet in the downstairs powder room, it's a tidal wave with hurricane force winds flooding the global marketplace with doubts instead of delight.
That's why the life preservers come out. When the C-level execs and board members resign in disgrace, they whisk their heavily padded severance packages to a palm-treed paradise ripe with private golf courses and a celebrity chef or two. Meanwhile, the teams of regular employees who executed and validated, often under pressure, the alleged misconduct are shorn of their professional and personal brands.
That's because when the rank-and-file folks are forced out because of the conduct of the corporate regime, they crawl to the workplace equivalent of a deserted island. Unemployed, they may find themselves stripped of professional certifications, licenses and other formal validations. The severance package, if it exists, is paltry compared to the cushions feathering the senior management exit. And everybody, including potential future employers, knows that they were part of a very stinky screw-up.
All this because he or she found himself gripped by orders from the powers that pretended to be. In some cases, the employee may have known the altered workflow was damaging. In others, accountability may not have been as transparent. Regardless, mistakes get made, hence organizational controls and audit systems that track people and processes to catch these errors. Once discovered, these errors may be nullified to prevent a more broad release but not corrected or reversed. That's because the top guns become desperate to prevent the erosion of brand equity that is sure to occur when the mistakes are made public. They start a furtive game of delusion and deceit that, when the mistakes are finally found, muddy the waters even further.
In the end, such behavior dilutes the brand even more. Enter the salvage hunters (Hello, MCI!) and the beginning of the end (Good-bye, Worldcom!).
The brand economy does not tolerate the basic tenets of Management 101: Say what you are going to do, and then do it. The spin doctors behind the market-research curtain add layers of magic to whatever no-frills product or service is on hand to whip up a marketplace frenzy of demand. That magic is sustained internally by limiting employee access to the control panel and forcing personnel to behave in manners that support the myths that arise in the consumer-facing outlets. To keep that customer satisfied, something's gotta give. And all too often, the sacrifice comes from the employee side of the equation.
Instead of covering up, management should just let loose. Admit there's a problem, solve the problem, and learn how to prevent the problem from happening again. Tell everyone who needs to know the problem is over. Take the one-day hit in today's 24-hour news cycle that will be over by the next morning. And move on.
Otherwise (gulp) it's a tight squeeze indeed.
