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.

A corporate culture founded in doggie doo

If the president of a company is the type of person who would leave a bag of dog poo in his neighbor's mailbox, what kind of leader do you think he is? With a leader like him, what kind of corporate culture do you think he supported?

Bob Furnad, former president of CNN Headline News, was captured on video last weekend leaving a bag of his dog's poo in his neighbors' mail box. Mr. Furnad admitted leaving the bag. "This was an immature act in response to years of malicious rumor mongering that I consider defamation of character," Mr. Furnad told the local Georgia newspaper.

The neighbors have said they haven't even spoken with Mr. Furnad in years and don't know why he would leave the poo in their mailbox. They said there is no feud. 

Mr. Furnad's immature behavior is unacceptable for a 70+ year old man, a corporate executive, a leader of any kind. What are the chances this was a one-time lapse of judgement, a rare lapse of maturity? I bet zero chance.

I wonder if Mr. Furnad was the type of leader who blamed others for his shortcomings, wallowed in mistakes, and failed to build valuable relationships. Would a leader who premeditates putting dog poo in his neighbors' mailbox foster a culture of accountability in which everyone was valued? Not likely.

If he would put poo in his neighbors' mailbox, chances are really good that he slung it around in the office too, although not literally of course. Or, perhaps literally.

Story on GMA

Corporations walk their talk and kick leaders to the curb

Now that Values are openly displayed on web sites, touted in advertisements, and posted on walls throughout corporate America, discrepancies between Values and behavior are noticed. Lately, it seems corporations are taking notice of their values and are trying to behave consistently.

Whether they like it or not, the web sites, advertisements, and posters are prompting many companies to be All-In.

Consider three current examples:

1. JPMorgan Chase admitted late last week that it experienced a $2 billion loss caused by, in its own words, sloppiness and bad judgment.

One PR model often followed in similar embarrassing, costly circumstances is to deny, downplay, then barely acknowledge and reluctantly fire a few people (a la Goldman Sachs). In response to its exorbitant losses, 

JPMorgan Chase went public before news leaked nationwide, started the CEO apology tour quickly, and accepted resignations or fired people involved. Their behavior is interesting because their Values Statement reads:  Our values are reflected in the way that we conduct our business and in the first-class results that we consistently achieve for our clients.

2. Best Buy's CEO, Brian Dunn, resigned in April for undisclosed personal reasons (All-In blog post). The reasons were disclosed yesterday: he had an extremely close relationship with a female coworker, and it affected the workplace. In light of that disclosure, Best Buy's Chairman resigned yesterday because he knew about the relationship. On its web site, one of Best Buy's values is to "Show respect, humility and integrity." At least in the midst of disrespect and lack of integrity, the company is showing some of both this week.

3. Yahoo's CEO, Scott Thompson, was lambasted the ten days, including here, for lying on his resume for years. When the lie became public ten days ago, the former CEO downplayed the lie and only acknowledged the distraction it had become for the employees. However, others took the lie more seriously. The executive who led the hiring process of Thompson, who began work at Yahoo in January, was let go, along with others. Yahoo's values include: We are committed to winning with integrity.The CEO was not committed to the same thing, and he is out.

 Clearly, living by their internal values has been difficult, embarrassing, and humbling for JPMorgan Chase, Best Buy, and Yahoo. Even when they are not perfect, all of their stakeholders can see they are trying to behave the way their values determine. Now when the executives of those companies ask for first-class conduct, respect, and integrity, they are role models for their corporate culture because they are walking the talk, and web sited, advertisements, and posters

A CEO's minor lie is major to employees

Four days ago it became public and blogged about here that Yahoo's new CEO, Scott Thompson, had lied on his resume. He lists an accounting and computer science degree, when he has only an accounting degree.

I blogged about it Friday because of the impact on corporate culture, and several people protested because the lie was so minor and didn't matter. So minor, they insisted, it shouldn't even be called a lie but an oversight.

Late yesterday, the CEO apologized for the distraction the lie had caused. He did not apologize for the lie itself or explain how it had been perpetuated throughout his hiring or previous employers. In the memo obtained by CNN, Thompson says, "I want you to know how deeply I regret how this issue has affected the company and all of you." (Source: cnn.com)

Whether you call it a lie or an inadvertent oversight, or any other name, the issue, its cause, and its management have become major to the employees. 

From cnn.com: A senior Yahoo executive, who spoke to CNN on the condition that his name not be used, said: "Thompson has quickly lost the confidence of many employees, who think he has to go."

Managers and executives often underestimate the impact their actions have on the people around them. When you need your people to unite as a team to move a company forward, they need you to be truthful. They will notice if you're not, and the corporate culture will be impacted.

(Article at cnn.com)

What do you think? 

Would you care if your company leaders lied in a similar way?

UPDATE 
May 13, 2012:
Yahoo confirmed late today that it's CEO, Scott Thompson, left the company as a result of the padded resume.
Article on cnn.com

Sprint's Hesse makes a rare move

This blog called out Sprint's CEO, Dan Hesse, on March 27, 2012 for being overcompensated. As a former employee, current customer, and current stockholder, I was appalled at exorbitant Hesse's salary increase in light of the company's financial losses. Apparently I was not alone.

Yesterday, Mr. Hesse sent a letter to the company detailing that he will forgo $3.25 million over the next two years. In a startling move that made me gasp for air, he also is going to return nearly $350k received last year. The adjustments are related to the accounting of the iPhone. (For specifics, read the article in today's Kansas City Star.)

Congratulations, Mr. Hesse. I applaud you for listening to your shareholders and for doing the right thing for your employees as it relates to their bonuses.