The Cycle of Corporate Culture

The Cycle of Corporate Culture

Culture can be the beginning and end of your company. Many executives and other members of leadership simply think of corporate culture as what the company stands for. This can be expressed through a corporation’s mission statement, their reported “vision,” or their promise to deliver their customers with the best products and services available. Corporate culture actually goes much deeper, beneath the surface to which the consumer public is privy. The MISTI Training Institute actually defines corporate culture as “the set of enduring and underlying assumptions and norms that determine how things are actually done in the organization.” It is not enough for leadership to state that they have inspiring beliefs and mission statements, if they do not run corporations to reflect those beliefs.

Even after hearing a more definitive explanation of corporate culture, many executives may still shrug their shoulders and insist that they have a great corporate culture. They think operations are streamlined, employees are engaged, and there are no weak links in the chain. They take solace in the fact that they have things like Taco Tuesdays, or Casual Fridays that improve the work environment and keep employees happy. While these are great ways to foster comradery within the workforce, they are band aid solutions to happy employees. The bottom line is: Healthy corporate culture begins with happy employees.

A recent study conducted by Glassdoor indicates that a majority of working individuals in the United States would prefer a healthy corporate culture to a higher salary or rate of pay. Their day-to-day becomes manageable when they feel as if they are part of a larger team. This graphic displays the cyclical nature of healthy corporate culture in motion. The cycle begins with happy employees. When trying to improve employee morale, leadership should strongly consider an internal audit of their company’s culture to identify pervasive issues within their corporation’s operating structure. Events like birthday parties for employees, or buying lunch for the office every few weeks are nice gestures by leadership, but they cannot act as solutions to repetitive issues. When these issues are not addressed within the corporation, employees often feel as if their value begins and ends with their productivity, as if they are cogs in a larger machine they cannot control. When leadership actively engages with employee concern on operation issues and makes dedicated and focused attempts to fix them, employees feel as if their voices are heard and their input is valued within the organization.

This leads to improved engagement on behalf of those valued employees. They are prompt to work, freshly-groomed and instilled with a sense of purpose as their co-workers progress with them towards the organization’s goal. The level of communication between employees will not only improve in quality, but the rate of response to correspondence also has the potential to increase dramatically, because the employees are engaged in the process and are eager to complete tasks on time—possibly even early.

Once employee engagement is up, leadership can expect to see an increase in the productivity of the workforce as a whole. Engaged employees approach their task with the confidence of a professional, and the confidence that comes from the feeling of support within the organization. Studies have shown that productivity can increase by as much as 28% when a corporation’s culture is given a major overhaul.

When productivity increases, everybody in the company benefits. Having their requisites satisfied, leadership can let their focus extend beyond daily operations. This expanded scope of supervision leads to higher engagement on behalf of leadership, which feeds back into a healthy work environment in which they are happy to reward the stellar performance of their employees. When employees feel their work is valued, the cycle begins anew.

This shared body of beliefs that the company claims to have in the public eye should go all the way to the CEO and be directly reflected in the day to day operations of the company. When leadership remains plugged in and continues to expand the scope of their supervision, internal issues cannot pervade within the workplace. In healthy work environments, the level of improvement that can occur week to week will only serve the company’s larger goals.

Investigating Executives & White Collar Crime

Investigating Executives & White Collar Crime

Don’t let executive misconduct ruin your corporation…

When it comes to running a business, the executives who are the visionaries and decision-makers that shape a company should always remain above reproach. White collar crimes have the potential to pull a business up from the root with devastating consequences. Unfortunately, Americans know from media coverage and social media that there’s few things we are more attracted to than stories about high-ranking officials and the misconduct that negatively impacts their businesses—both in profits and in public relations.

Many will be familiar with the recent news of Amazon CEO Jeff Bezos’ high-profile divorce following allegations of infidelity, in which his ex-wife became the richest individual in history by virtue of divorce proceedings. The fallout from executive misconduct can leave a trail of legal fees, government sanctions, violations, and public relations-related crises that can devastate a company from the top down.

Thought to be coined in 1932, the phrase “white collar crime” now refers to a spectrum of frauds and other crimes committed by high-ranking executives and officials. The most common characteristics of white collar crime contain aspects of deceit, concealment, or violation of company policies and/or state and federal law. The motive is financial, with executives skimming off the top of a company’s profits for their own use. These crimes are sometimes thought of as “victimless crimes,” with no regard to how the fallout from a fraud or scheme can impact the company, and therefore the families of its employees. The types of fraud include, but are not limited to:

  • Bank fraud
  • Blackmail
  • Bribery
  • Cellular phone fraud
  • Computer fraud
  • Counterfeiting
  • Credit card fraud
  • Currency scheme
  • Environmental schemes
  • Extortion
  • Forgery
  • Health Care Fraud
  • Insider trading
  • Insurance fraud
  • Investment schemes
  • Kickbacks
  • Larceny/theft
  • Money laundering
  • Racketeering
  • Securities fraud
  • Tax evasion
  • Telemarketing fraud
  • Welfare fraud
  • Weights and measures

Corporate fraud and white collar crime of this nature remain one of the Federal Bureau of Investigation’s top priorities when it comes to identifying and indicating perpetrators. While involvement by government agencies may seem like the end of the line, there are ways companies can get out in front of executive misconduct by hiring a private investigator to investigate these matters.

Private investigators have a unique reputation as slick operators who fly under the radar, but they are invaluable professionals to companies in the throes of a corporate crisis because they are independent and objective. Objectivity is the priority when dealing with executive misconduct and white collar crime, as any allegations or evidence presented against the executive must be presented by an individual with no stake in the outcome of the investigation. Private investigators are independently contacted by a business or corporation to investigate the alleged executive misconduct, and can gather evidence and collect witness statements without the air of bias. Because private investigators are independent contractors, there is no fear of reprisal on behalf of coworkers and other employees at the company. This leaves no lead discounted or ignored. They can investigate employees at all levels, and determine how (if at all) the executive is receiving assistance in their fraud from subordinates. One of the most attractive qualities in a private investigator is that their objectivity makes them crucial witnesses in any legal proceedings that may result from the investigation.

Businesses and corporations should never be beholden to CEOs, presidents, and other high-ranking executives who behave badly. Executive misconduct and corruption are like aggressive weeds that must be pulled from the root in order for businesses to flourish. When it comes to rooting out bad leadership, consider hiring a private investigator to navigate a tricky investigative path that can end in quality operations and peace of mind for businesses large and small.

If you have a corporate crisis like executive misconduct, we can help. Call Lauth Investigations International, a family-owned-and-operated investigative firm with over 30 years of providing successful solutions to clients in Indianapolis and throughout the nation. Call 317-951-1100 for a free consultation, or to learn more about our services, please visit our website.

Investigating Non-Compete Violations

Investigating Non-Compete Violations

non-compete violationWhen growing a business, executives and owners have to go the extra mile when it comes to protecting trade secrets. In the pursuit of their company’s business, a common practice for corporations of all sizes is implementing non-compete clauses in their employees’ contracts. This ensures, should an employee leave the company for any reason, they cannot utilize trade secrets for the purpose of building a similar business of their own. It’s in a business owner’s best interest to be preemptive in protecting themselves from client poaching, theft of company secrets, and possibly even slander when it comes to current and former employees who violate their non-compete agreements.

Though they go by several names and the laws concerning them vary state to state, non-compete agreements are generally a legally-binding contract between an employer and an employee, whereupon acceptance of a job offer by a company, an individual agrees during their employment and following their termination they will not enter into any competing business for a predetermined period of time. Whether it’s working for a company’s top competitor, or striking out in their own business, non-compete agreements protect trade secrets, sensitive company information, and prevent competing businesses from poaching successful employees with promises of a handsome pay-raise in exchange for the expertise they might have gleaned from their time at their previous position. This kind of information can range from client bases to business operations to future products and services. The duration of the non-compete agreement following an employee’s termination have to be well within reason, as no employer can permanently preclude a former employee from any line of work.

Not every company experiences difficulties by virtue of a former employee violating their non-compete agreement, and some companies do not see the need for non-compete agreements at all, but the consequences of trade secrets being used to steal a company’s business can have devastating effects, ending in the worst possible circumstances with a business closing and an owner in debt. Even if a company is able to quash a non-compete violation in court, the cost to the company in legal fees can be astronomical, especially for smaller businesses. That’s why it’s important for owners and executives to be preemptive and proactive when it comes to potential violators. Luckily, a private investigator can help at all stages of a non-compete violation investigation.

Human resource employees are the salt of the earth, and can have a great influence on how a company develops based on the individuals they select for their workforce. However, human resource employees are not lie detectors, and do not always have access to legitimate, comprehensive background screening tools. Background screenings and checks are among the most common service associated with private investigators. If there is something suspect in a candidate’s past, licensed private investigators have the tools and experience to find it out. Private investigators can pull a candidate’s criminal history, financial history, and interview persons in their lives who can speak to character and work ethic. They can also spot patterns in a person’s work history or lifestyle that could be high-risk factors in a hypothetical non-compete violation—things like transience, long periods between positions, or financial destitution.

Some malingering employees can’t wait to be terminated before violating their non-compete agreements. It’s not uncommon for these individuals to exploit trade secrets for their businesses own gain while on company time and dime. While on a business trip, an individual might use company per diem to buy drinks for a person who could be a potential investor in their new business. Employees might use company supplies to supplement their project, such as printers, fax machines, computers, and other equipment. Private investigators can conduct diligent investigations within a company’s workforce to root out the source of the theft. Private investigators can interview witnesses, including upper management and other staff, review vital documents like bank records, and conduct surveillance of the company’s operations as needed to expose the perpetrator. Their objectivity makes them an ideal candidate to conduct such an investigation because they do not have a stake in the outcome.

There are many circumstances under which a business owner might come to suspect a former employee has violated their non-compete agreement. Word might have traveled through business circles that a similar business is starting up. Employees might start disappearing in clusters. Clients may suddenly decide to sever business ties in favor of a new contender in the competition. Whatever transpires, one thing is certain—documenting and exposing this exploitation is imperative, because the consequences can be costly. Retaining a qualified private investigator who specializes in corporate crises is crucial to resolving non-compete violations quickly, before the exponential costs begin to erode profits. Private investigators can perform surveillance on suspected former employees to document their movements, record with whom they met, and collect evidence such as pictures of a brick and mortar establishment, marketing materials, vital documents, and filings with the Secretary of State. Private investigators can send undercover operatives to infiltrate a workforce to get information the business privy only to employees. They can also enlist the aid of a confidential informant—an individual already within the company to provide information. This requires quality interviewing skills and developing a natural rapport with potential witnesses, both important qualities in a qualified investigator.

When non-compete violations are at their ugliest, not only do violators seek to siphon off their former employer’s business by exploiting trade secrets and knowledge of their operations, but they can also play dirty by exposing this information publicly. Another method involves deliberately spreading lies about the competition in order to drive business towards the former employee’s company. That’s known as slander and it’s legally actionable. Documenting the perpetuation of these lies and proving they are in fact false are crucial in these cases. Diligent fact-finding is the cornerstone of any private investigator’s expertise. Private investigators can conduct cyber investigations to track down the users behind profiles that post false negative reviews, follow rumors back to their roots, and forensically track how information left the competition and made its way into the former employee’s business nucleus. They can implement many of the strategies aforementioned: surveillance, interviewing witnesses, documenting evidence. Slander cases tend to have a divisive they-said, they-said narrative, which is where a private investigator’s objectivity becomes invaluable once more. Private investigators have no stake in the solution of an investigation. Their independence coupled with their expertise and resume make them spectacular witnesses in any subsequent litigation.

When a company has a non-compete agreement in place, it’s important that executives and owners are proactive when performing a risk assessment on a potential employee. It’s important that a healthy company culture fosters good comradery, honesty, and a policy of “if you see something, say something.” Building a case against a former employee who violated their agreement can be time consuming at the expense of company resources. Dealing with the fallout from litigation can bring a reliable business to its knees. Private investigators can assist in all phases of any non-compete agreement violation, and retaining their services will go a long way towards a body of objective evidence and testimony that can resolve a company’s crisis.

If you have suspicions that a current or former employee has violated their non-compete agreement, contact Lauth Investigations International today for a free consultation on how we can help you! Call 317-955-1100 or find us online at www.lauthinvestigations.com. 

Carie McMichael is the Media and Communication Specialist for Lauth Investigations International. She regularly writes on investigations, missing person, and other topics in the criminal justice system. 

5 Ways Private Investigators Benefit Human Resources

5 Ways Private Investigators Benefit Human Resources

5 Ways Private Investigators Benefit Human Resources

Our brains are one of the defining parts of our anatomy that makes up who we are as humans, but without vital organs such as the heart, we cannot live to become who we were meant to be. The brain sends signals to the heart to pump vital fluids and maintain the health and fitness of the body in order to grow and develop. In a capitalist world of business and commerce, if a CEO is the brains of a company, certainly Human Resources is the heart. Before any employee can enter a company, they must go through HR, just as vital fluids must pass through the heart before reaching their destination. It is important for Human Resource representatives to be armed with knowledge to allow them to bring in the best and the brightest to contribute to their company. One of the ways HR can rest easy in their hires is by retaining the services of a private investigator to voire dire the candidate base, maintain a healthy work environment, and prevent employee fraud that would damage the company. 

Hiring the Right People 

If proper precautions are not taken, hiring a candidate who might soon be terminated can be very costly to a company. Even if the employee is making minimum wage at the time of their termination, a study from the Society for Human Resource Management estimated it can cost as much as $3500 to replace that employee. The higher the level of employment, the costs exponentially increase, with other estimates claiming that it could cost as much as 150% for middle-level employees and 400% for high-level. Therefore, hiring the correct employee on the first attempt can be critical. As the heart of the company, Human Resources are often overwhelmed with a myriad of tasks, which can make the vetting of potential employees fall lower and lower on the list of priorities. This is where the services of a private investigator will prove prudent. Private investigators can use their time and skills to perform background checks on employees, painting a clearer picture for HR representatives. This helps ensure the hiring of proper employees, which minimizes turnover, and greases the wheels of progress within a company.

Exposing Workplace Theft

A report by CBS News estimated that a typical business will lose 5% of annual revenue to employee theft. Employee Theft Solutions, a division of the Shulman Center for Compulsive Theft and Spending, has estimated that nearly one third of all corporate bankruptcies were the result of unfettered employee theft. Even more alarming, the U.S. Chamber of Commerce estimated that 75% of employed persons will steal from their workplace or employer and will continue to steal if not exposed. It is a staggering statistic that should garner scrutiny from the Human Resources department with regards to their own workforce. Bearing in mind that investigating the behavior of a single prospective employee could be very time consuming, imagine having to vet an entire staff in order to uncover a source of theft. With an average of 3-5 cases at any given time, private investigators have the time and access to resources that can help expose the perpetrator of theft in a company. In addition to checking security systems and interviewing witnesses, private investigators also have the advantage of being able to conduct undercover investigations in order to squeeze out the source of theft. These investigative services can help reinforce the wall that prevents employees from devastating a company with fraud. 

Fraudulent Compensation Claims

A significant portion of the costs incurred annually by employees is attributed to worker’s compensation claims. As a member of Human Resources, it might be easy to trust every single worker compensation claim that comes through the pipeline. After all, yourself or a former superior may have hired the employee, and you trust one another’s respective judgement. However, it is naïve to assume every claim will be legitimate. Worker compensation claims can cost companies hundreds of thousands of dollars per fiscal year depending on the volume of claims. A recent statistic by the Employee Benefit Research Institute in 2014 estimated that it can cost companies as much as a $1.00 per every $100 of employee wages, which can add up very quickly. This is where a private investigator can be a godsend amidst pending litigation. Often in worker compensation claims, interviews are required with the claimant to get their version of events that led up to their injury. While members of Human Resources have many gifts, they may not be skilled in extracting the truth from an employee who might be committing a fraud. Private investigators work to get to the truth every day and can assist the HR department in protecting themselves within the letter of the law. With the resources and due-diligence of a PI vetting the claim, businesses can rest easy knowing that the claims coming through the Human Resources department have merit. 

HR Investigation Integrity 

With the growing problem of drugs in the workplace and the rise of the #MeToo movement, businesses are having more use for private investigators than ever before. A recent article by CNBC details how a rising number of businesses are hiring private investigators in order to identify predators in their workforce before an employee comes forward with claims of sexual harassment, discrimination, or threats. 

“An ounce of prevention is really worth a pound of cure here, because the cost of potential drop in stock price, legal and PR cost — the possibility of regulators getting involved and regulating industries — they are enormous compared with the relatively modest expenditure in hiring folks like us in order to rule out this behavior,” said Nardello, CEO of Nardello & Co.

In addition to identifying these problems to save a business money, it is also imperative that any internal Human Resources department conducts a thorough, prompt, and lawful investigation. Just as private investigators can use their skills to identify predators, they can also protect any HR personnel from compromising the integrity of an investigation, protecting them from legal liability. 

An Objective Eye 

Human Resources: It’s in the name. Whenever there is a problem between coworkers, a discrepancy in payroll, or simple maintenance of a healthy work environment, the human resources department is where employees will turn to address issues in their job. And while members of HR do their best to solve these problems from an administrating and mediating position, they cannot always be objective. After all, HR is just as much a part of the workforce as any other employee, and all of the same implications of camaraderie and friendship can apply. By the same token, HR can also have negative relationships with the subjects of their investigations, which can influence their judgement. These biases can have a toxic effect on office morale, and employees might not feel as though they can trust Human Resources to be fair and impartial when addressing workplace issues. When there is no trust, the important relationship between HR and other departments breaks down. As is the case with many investigative scenarios, a private investigator is always the perfect second set of eyes to have when examining these issues. Without a stake in the outcome of any internal investigation, private investigators can remain unbiased as they conduct interviews, collect evidence, and reach a conclusion in regards to the veracity of any claim. 

It is important for any Human Resources department to safeguard themselves against the many challenges—both internal and external—they encounter on a daily basis in their company. Retaining the services of a private investigator can go a long way to taking pressure off an already busy department, as well as providing an objective third-party perspective that will positively benefit companies as they grow and develop. If CEOs are the brains of a company and the Human Resources department is the heart, certainly a private investigator would be the immune system; identifying problems and staving off possible infection in order to maintain the health and productivity of any work environment. 

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When Hiring a CEO Goes Wrong

When Hiring a CEO Goes Wrong

Hiring a CEO is a long and arduous process. Companies can’t afford to waste time and money on the wrong candidates. It’s bad enough when someone gets a CEO position and isn’t good at their job. It’s even worse when they have to resign in embarrassment.

More frequently than you might suspect, companies hire someone for a top executive position without doing a thorough background check. Instances like these not only waste company resources, but they hurt the company’s image and make securing top talent in the future harder. Here are a few times a more thorough vetting process could’ve protected a company’s resources and reputation.

 

Monica Crowley

Monica Crowley was a research assistant to Richard Nixon in the 1990s. She received a PhD from Columbia University in 2000 and was a political commentator for The Wall Street Journal, Fox News and MSNBC, among others. She has published multiple books as well.

When Donald Trump won the presidency he initially nominated Crowley to be the Senior Director of Strategic Communications for the National Security Council. Quickly after her nomination reports began circulating that Crowley had plagiarized large portions of the books she had written.

Initially the Tump administration said they stood by Crowley and that the attacks on her were politically motivated. However more and more evidence of Crowley’s plagiarism began to mount.

Crowley was found to have not only plagiarize portions of her books, but also her PhD dissertation for Columbia University. Harper Collins, Crowley’s book publisher, withdrew her books from being sold and Columbia said they were reviewing their records.

Crowley’s plagiarism went from minor footnote to national spectacle overnight. After standing by Crowley during the initial accusations, the Tump administration ended up withdrawing her nomination. This whole scandal could’ve been avoided with basic cross referencing and data mining.

 

Gustavo Martinez

Gustavo Martinez was the CEO of J. Watler Thompson, a major company in the advertising industry. JWT has over 10,00 employees working in more than 200 offices across 90 countries.

Martinez is originally from Argentina and became Global President of JWT in 2014. In January of 2015 Martinez was named CEO. Within a year of his promotion, Martinez was named in a lawsuit alleging discrimination by a female employee.

The lawsuit claimed Martinez had made numerous racist remarks during a company meeting. Martinez is said to have told employees to double check their bags and belongings since the hotel where they were staying  had so many black people. Martinez is also accused of making comments about raping female employees.

One of the more shocking aspects of this case is the brazenness of Martinez. All of these comments were made in front of large groups of people. His comments about black people potentially stealing employees belongings are even on video. In fact, Martinez had been known to discuss his distaste for Jewish people.

Martinez’s willingness to speak this way publicly surely could have been discovered before he was made CEO. Instead J. Walter Thompson is now engaged in a high profile lawsuit and lost their CEO. Extensive background investigations can protect your company from embarrassing headlines and wasting money fighting lawsuits that should never have happened in the first place.

 

Scott Thompson

Scott Thompson is an American businessman with an impressive resume. Thompson had a long career in technology before becoming the CEO of Yahoo in 2012. He had been the Executive Vice President of Technology Solutions for Inovant, Chief Information Officer for Barclays Global Investors, Chief Technology Officer and then President of Paypal.

Thompson’s work history made him appear to be the perfect candidate for almost any job in technology. How could he have gotten so many high level technology jobs without any skeletons being rousted from his closet?

Despite his exceptional work history it turns out that Thompson had been falsifying his resume. After six months as the CEO of Yahoo, Thompson was forced to resign after it was discovered he lied about his college education. Thompson claimed to have received bachelor’s degrees in computer science and accounting from Stonehill College.

When Stonehill College was contacted about potential discrepancies on Thompson’s resume, they would only confirm he had received a degree in accounting. Thompson blamed a headhunting firm for the false information, but the firm strongly denied the allegation. Yahoo has been struggling to find stead leadership ever since.

 

All of these cases share a common theme; they were all 100% avoidable. There is no excuse for hiring a CEO who has to resign in disgrace with a year of employment or even before they begin the job. Private investigation firms like Lauth Investigations International can identity these issues before your company makes a move.

Companies aren’t just wasting time and money on unqualified candidates, but they’re risking their reputations. Appearing dysfunctional is bad for investors and makes it more difficult to secure qualified candidates in the future. Lauth Investigations International has the investigatory skills to protect your business from self-inflicted wounds.

 

David Schroeder, Blog Writer, Lauth Investigations International