Escaping a Culture of Fraud: An Insider’s View
July 31, 2020
by Thea Jo Buell, student, Weber State executive MBA program
I have a fish tank in my front room. Every month or so, the tank and filtration system must be thoroughly cleaned, leaving the water beautifully clear. But inevitably, I will walk into the room and wonder how the water ever got so orange. Business culture is like that fish tank. It has to be regularly monitored. Small contaminants can grow out of control if the water is not maintained properly. Ultimately, if left on its own, the tank will become toxic.
Like it or not, business executives create and control company culture. We must accept this, take it seriously, and embrace it as a critical element of our jobs. The behaviors, habits, and attitudes of top executives directly influence employee behaviors, habits, and attitudes.
From my experience there are three critical things executives can do to keep their “tank” sparkling and wholesome.
BE THE MODEL FOR YOUR EMPLOYEES
First, be the model for what you expect your employees to be. Proactively decide what you want your company (or department) culture to be, and then behave in a manner that fits that culture. If you want employees to be on time, then you have to be the model of punctuality. Never let culture just take its course. Employees will see this as a cue that you don’t really care what they do, and you will end up with the classic “inmates running the asylum” scenario. I’ve seen it happen.
BE ACTIVE IN YOUR COMPANY
Second, be active in your company. Get to know people by name at all levels of the company. Know what they do. Listen to honest complaints. Your time and effort will be repaid handsomely in employee loyalty.
GIVE EVERYONE THE BENEFIT OF THE DOUBT
Third, give everyone the benefit of the doubt. Remember that bullies are generally likeable and that their victims are often socially awkward. I watched a company culture devastated by a group of congenial, dishonest bullies who curried favor with executives through their confident demeanors and outgoing personalities. They used this power to belittle and undermine employees who got too close to their dishonest activities. The victims’ allegations were dismissed, since they had already been painted as disgruntled or incompetent employees. Most of them were fired. Ultimately, the bullies' actions resulted in $180,000 in losses, with untold additional losses in future contracts and lost consumer confidence. Yet surprisingly, even after their plot was discovered, none of the perpetrators were fired. They were simply split up—assigned to different departments—so they couldn’t continue with their fraud.
As executives, we must be objective in our responses to employee complaints and allegations. We cannot be swayed by personality or likeability. If we can’t do that, then we have to hire someone who can.
What if you find yourself, as I did, swimming in a toxic fish tank, surrounded by a poisonous culture? Advice from outsiders can be distilled as “quit and go to work somewhere else.” They’re right, but they don’t really understand how incredibly difficult that advice is to follow. Quite frankly, these people are either clueless or they have never lived a day in their lives without a yacht. Stop for a moment and pretend that you are living paycheck to paycheck. Then imagine that at least one person is absolutely, totally dependent on you for their survival. Then consider what quitting your job today—with no prospects for another job and no references—would cost you. If you can do that, you just might begin to understand.
Oliver G. Halle, an FBI fraud investigator, gets it. His advice? It (leaving a job) might be the hardest decision one ever makes in life, but “no matter how hard things are, they can be a lot harder.”
I attest that it is the hardest decision I have ever had to make. But if I were faced with the same choice today: I would do it again. In the end, all I have, all I really own, is who I am.
Corporate fraud is not a problem we can fight with better security, more money, stricter rules, or better enforcement. Fraud is the result of conduct, which is the result of attitudes. Change those attitudes, and we change the behaviors. Whether we want the responsibility or not, we at the top are ultimately the protectors, cultivators, and exemplars for good conduct. Like toxic algae, we cannot afford to tolerate fraudulent conduct in ourselves or in those we lead. We eliminate fraud by becoming the best selves we can be.
ABOUT THE AUTHOR
Thea Jo Buell entered the wild and wacky world of independent telephone book publishing at its inception, when yellow pages' revenues were akin to a "gold" rush after the court-ordered breakup of the longtime AT&T monopoly. She witnessed--in true gold rush style--the boom and bust of the industry, watching the rise and fall of both bandits and benefactors, opportunists and entrepreneurs. It was a true "Wild West" industry, and there are a lot of tales to tell. Thea is now in her final semester of the MBA program at Weber State University and looking forward to a great opportunity in business management or data (phone books, after all, are the "original big data"). She is even considering a career in teaching.