Strategies for Improving Workplace Behavior and Performance

From Leadership Expert Dr. Diane Hamilton

Problems with Crowdfunding

 

Crowdfunding occurs when people network through the internet to raise money to support other people’s ideas or interests. Crowdfunding became popular when Obama signed the JOBS Act bill in April.  Since then, sites like Fundable and Kickstarter have garnered media attention.  Not all information about crowdfunding has been positive.  The Harvard Business Review’s article The Road to Crowdfunding Hell explained some of the problems associated with the process.

The Wall Street Journal’s article Crowdfunding Efforts Draw Suspicion contains some of the latest problems.  The SEC was supposed to review the rules for crowdfunding by January 1.  They missed this deadline. In the meantime there may be some people who have taken advantage of the situatoin.  “State regulators already have taken or considered enforcement action against a handful of companies for allegedly exploiting online fundraising to commit fraud—or simply jumping the gun on the planned rules changes.”

There have been a large number of websites dedicated to crowdfunding.  Over 9000 sites include the word in their website name.  “Crowdfunding enthusiasts say the number of websites being registered reflects the pent-up demand for the financing targeted by the JOBS Act.”

The concern is that there is a lot of interest without a lot of control. “The association of securities regulators says the JOBS Act doesn’t do enough to protect investors.” Crowdfunding Insider claims Education is the Best Weapon Against Crowdfunding Posers.

The following video explains:  The JOBS Act and its impact on crowdfunding.

Related Articles:

The Ethics of Google

“Don’t Be Evil” is Google’s informal corporate slogan. The founders of Google claimed that this motto explained their culture that “prohibited conflicts of interest, and required objectivity and an absence of bias.” According to Google’s code of conduct page this slogan is, “about providing our users unbiased access to information, focusing on their needs and giving them the best products and services that we can. But it’s also about doing the right thing more generally – following the law, acting honorably and treating each other with respect.”

Can Google do business in an ethical manner if they allow for people to search for unethical content? Laws may decide what is legal, but who decides what is unethical or evil?

Every day someone searches for how to do something illegal and/or unethical through utilizing Google’s search engine. How much content should Google censor?  The following articles address Google censorship issues:

U.S. News reported, “The company is based in the United States, and thus must comply with U.S. laws. As a part of its policy, Google already censors things like child pornography, and complies with copyright infringement requests (a heavy volume of which come from videos uploaded on YouTube). Yet because services such as YouTube and Blogger are popular around the world, the company must decide to what extent it will remove content deemed illegal or offensive to foreign governments.”

Related Articles:

Top 30 Links for the Successful Entrepreneur

 

The following list contains the most popular articles used as supplements in my entrepreneurial courses.  Click on the title name to be directed to the article.

  1. Ten Entrepreneurs Who Hit It Big Before Turning 35
  2. Top 10 Companies Code of Ethics and Conduct
  3. Top 10 Company Mission Statements
  4. Famous Entrepreneurs Who Hit it Big With Humble Beginnings
  5. Researching Apple: Top 10 Most Useful Links
  6. Value of Top Companies   
  7. The Top 10 Most Misunderstood Entrepreneurial Terms
  8. Top Five Things to Know to be a Successful Entrepreneur
  9. 50 Famous People Who Failed Before They Became Successful
  10. Top 50 Venture Funded Companies   
  11. Top 5 Networking Tips for Small Businesses
  12. Time for a New Career? Change the Daily Grind to a Job of Your Dreams
  13. 50 Excellent Lectures for the Small Business Owner
  14. An Entrepreneur’s Startup Business Model Checklist
  15. Importance of Being Proactive vs. Reactive
  16. Important Terminology for Entrepreneurs
  17. Chief Officer Acronyms Explained
  18. Top 20 TED Talks Not to be Missed
  19. Companies Rewarding Employees for Entrepreneurial Ideas
  20. Increasing Motivation:  Right Brain vs. Left Brain
  21. Women Becoming Successful Entrepreneurs
  22. Most Inspiring Entrepreneurial Women
  23. Capitalizing on Manic Depression
  24. What Happens When Genius Leaders Pass the Torch
  25. New Businesses Not Getting Loan Approval
  26. Serial Entrepreneurs Share Words of Wisdom
  27. 10 Famous Product Failures
  28. Microlending:  Funds for Small Businesses
  29. Brand Awareness:  The Importance of Facebook
  30. Top 25 Links to Change Your Body, Career and More

8 Important Business Ethics Cases

For those interested in researching some interesting ethical businesses cases, there are plenty from which to choose. Business leaders may feel squeezed by shareholders to produce profits.  Some have made some ethical blunders in an attempt to remain competitive. Others have used their size to squeeze out the competition.  The following includes some important business ethics cases based on well-known organizations:

  1. Enron – Questionable accounting practices and manipulation of the energy supply brought down this company. Enron: The Smartest Guys in the Room is an excellent documentary movie that explains the scandal.  Check out an excerpt from Enron’s Code of Ethics.
  2. Monsanto – Monsanto has been criticized for its mega-size.  Critics fear they are taking over the food supply as well as creating negative environmental issues. Check out Monsanto’s Code of Ethics for Chief Executives and Senior Financial Officers.
  3. Arthur Andersen – Arthur Andersen is known for its unethical auditing practices. Check out The Fall of Arthur Andersen for more complete details.
  4. WalMart – Studies have shown that WalMart may save people money but they may also negatively impact communities.  Their low prices may also hurt suppliers. The company received criticism when leadership announced they wanted to hire healthier, more productive employees. WalMart has been accused of being anti-union and has survived sweatshop and discrimination scandals. Check out WalMart’s Statement Regarding Code of Ethics.
  5. Countrywide – The company offered subprime loans that later resulted in default.  Critics have claimed that Countrywide employees told clients that their properties would increase in value and that their loans would be able to be refinanced when market values rose.  The market values declined causing many to lose their homes.  Check out Countrywide’s Code of Ethics.
  6. Beechnut – Beechnut’s ethics came into question when it was discovered that they were selling “apple juice” to foreign countries that contained something less than apple juice.  For more information on this scandal, check out Beechnut’s History and Apple Juice Scandal.
  7. Starbucks – Clustering strategy may force smaller companies out of business. There were so many Starbucks on street corners that movies like Best In Show made fun of how there might be one Starbucks right across the street from another.  Check out Starbucks’ Code of Ethics for CEO and Financial Leaders.
  8. Nike – Manufacturing practices included producing shoes offshore to save money. Nike has used its share of sweatshops in manufacturing. They have come under fire for human rights violations. Check out Nike’s Code of Ethics.

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Loss Leaders and the Old Bait and Switch

Go Daddy is in the news right now due to their consideration of global expansion. One of the ways they have become so successful is that they utilized a marketing technique where they offered a “loss leader”.  For those who have not taken a business course, this term may not be familiar.  The Business Dictionary defines a loss leader as a, “Good or service advertised and sold at below cost price. Its purpose is to bring in (lead) customers in the retail store (usually a supermarket) on the assumption that, once inside the store, the customers will be stimulated to buy full priced items as well.”

In Go Daddy’s case, they charged customers only around $10 to register domains while their competition charged closer to $35.  The Arizona Republic reported, “Then, they were able to capitalize on that by figuring out that domain names are a loss leader or a low margin item, and the way you really make money in the business is not with the domain names, but it’s with everything else that people buy with them.”

How does a loss leader differ from what people refer to as the “old bait and switch”?  First of all, the old bait and switch is considered fraud.  “Customers are “baited” by advertising for a product or service at a low price; then customers discover that the advertised good is not available and are “switched” to a costlier product.”  This is considered false advertising.

The use of loss leaders is a smart marketing move because it gives customers what they want at a lower price and allows companies to make more money on any additional items purchased.  The old bait and switch is illegal and causes a loss of business in the end through word of mouth about shady practices.    

Global Warming: Answers For Both Sides From The Most Terrifying Video You’ll Ever See

In a foresight class I teach, we compare Al Gore‘s and Glenn Beck‘s views on global warming. It brings up some interesting discussions. A student recently posted this link in class and I think it is very well done and explains the two sides and how we may need to think about the subject.

The amount of interest in global warming may be dropping.  Denverdailynews reported,  “A poll by the Pew Research Center states that the public’s priorities for 2010 did not include global warming. In fact, global warming ranked last as a priority, with just 28 percent of the public considering it a top priority, according to the 2010 poll.”

Product Placement – Is it Shameless or Just Good Business?

I teach a lot of marketing classes where we talk about product placement.  In a recent discussion we were talking about FedEx and the movie Castaway.  I read that the company didn’t pay for that mention.  I find that hard to believe but I guess it is possible.

Product placement is big business.  Recently BeBe launched a new line of clothes based on its popularity from 90210.

Here is a list of some very noticeable products placed in movies that you may remember.

  1. Taco Bell in Demolition Man
  2. Popeye’s Chicken in Little Nicky
  3. Reese’s Pieces in ET
  4. New Beetle in Herbie:  Fully Loaded
  5. AOL in You’ve Got Mail
  6. Several Dolls like Barbie, Mr. Potato Head in Toy Story
  7. Aquafina in National Treasure
  8. CNN in Contact
  9. Dr. Pepper in Spiderman
  10. Apple computers in too many movies to mention

Check out the following links for some more examples:

Movie-Moron.com – 10 Most Shameless Uses of Product Placement in Films

MetaFilter.com – Examples of Product Placement in Movies

Cracked.com – 10 Most Shameless Product Placements in Movie History

Listverse.com – Top 10 Blatant Examples of Product Placement in Movies

Wikipedia.com – The Complete Lowdown on Product Placement

When Companies Don’t Pay Employees: The Ethics of Grinding

With the current state of the economy, many companies are barely making ends meet.  They are low on funds and are finding unfortunate ways to stay afloat.  One of those ways is through grinding their present and past employees.

What is grinding?  Think of the salesperson who is owed a commission from a company but they decide to quit and go somewhere else.  Let’s say the company owes them $20,000 in back commissions.  The ex-employee is still entitled to their commission.  However, some companies may not have the funds or don’t want to pay the commission and stall on the payment.  Meanwhile, the ex-employee is feeling the pain of not having their money and is constantly contacting HR or leadership to find out when it’s coming.

Unfortunately many of these companies play this game for many months before people end up going to lawyers.  The company is betting the ex-employee won’t seek legal representation and even if they do, the corporation has the legal power and funds on their side.  The company may get a threatening letter from lawyers but they know that they have the upper hand and hope that the ex-employee will give up over time, because they will run out of money and patience.

The ex-employee has a better case if they can find others who are not receiving their payments either.  By all of them getting together in a class action suit, their power is increased.

It is illegal for companies not to pay money they owe.  Technically there are labor relations boards that handle complaints.  However, after checking with the local Arizona state labor office, they only will help you with your claim up to $2500.  For a list of state labor offices, please click here.  In Arizona, if your claim is under $2500, they will investigate it and it can take up to 90 days to be resolved.

If your claim is over $2500, they won’t even look at it.  It is then up to you to go through the civil courts which means lawyers, money and time. . .Things that the corporations have on their side.

How to Reinvent Your Career by Dr. Diane Hamilton

For more articles on corporate ethics, check out:

Are Products Really As Green As They Claim

Does Your Boss Want You Dead

CEO Ethics

Are Products Really as Green as They Claim? 95% of Them Apparently are Not

via sinsofgreenwashing.org

A survey from the Federal Trade Commission (FTC) that was just released claims that 95% of those products that label themselves as green are misleading us.  Many are making claims without the proof to back them up. 

What is greenwashing?  If you combine whitewashing and green, it implies deception in the use of stating  a product is “green” when it may actually not be. This is a big topic that my students and I discuss in my marketing and ethics courses.

To see the study, Greenwashing Report 2010, click here.

In the report, they state the following:

  • Since 2009 the number of green products has gone up by 73%
  • They list 7 sins of greenwashing including:  showing no proof and being vague
  • Big box stores are the best providers of greener products
  • They examined over 5200 products
  • Greenwashing, although a problem, is actually declining

Some Notable Findings from the 2010 Report…

What is Rapleaf and What Do They Know About You?

 

If you look at Rapleaf’s site, they describe their business in the following manner: “Rapleaf is a San Francisco-based startup with an ambitious vision: we want every person to have a meaningful, personalized experience – whether online or offline. We want you see the right content at the right time, every time. We want you to get better, more personalized service. To achieve this, we help Fortune 2000 companies gain insight into their customers, engage them more meaningfully, and deliver the right message at the right time. We also help consumers understand their online footprint.”

According to an article by Emily Steel from the Wall Street Journal, Rapleaf is building a database with all of our information in it.  They do this by tapping into voter-registration files and looking at our social networking, shopping and real estate purchases.  According to that same article, “Rapleaf says it never discloses people’s names to clients for online advertising.”

I’ve seen blogs that consider this “scare journalism”.  Are these articles meant to scare us or are they something we need to worry about?

Here is what The Wall Street Journal found:

  • Rapleaf knows your real names and email addresses.
  • It can build rich profiles by tapping voter-registration files, shopping histories, social-networking activities and more. In effect, it can built the ultimate dossier on you.
  • Rapleaf sells pretty elaborate data that includes household income, age, political leaning, and even more granular details such as your interest in get-rich-quick schemes.
  • According to the WSJ, Rapleaf segments people into 400 categories.
  • Rapleaf says it doesn’t transmit personally identifiable data for online advertising, but the WSJ found that is not the case. Rapleaf shared a unique Facebook ID to at least 12 companies and a unique MySpace ID number to six companies. Any sharing was accidental, the company said.
  • Politicians, both Democrats and Republicans, are using Rapleaf. It has provided data to 10 political campaigns

What is Web Scraping?

A scraper site is a spam website that copies all of its content from other websites using web scraping. The purpose of creating such a site can be to collect advertising revenue or to manipulate search engine rankings by linking to other sites to improve their search engine ranking. 

There are now some sites that are working on finding out even more information about you through scraping.

Scraping for Your Real Name

PeekYou.com has applied for a patent for a way to, among other things, match people’s real names to pseudonyms they use on blogs, Twitter and online forums.

Read PeekYou.com’s patent application.

In a recent article in the Wall Street Journal, they wrote about how scrapers broke into sites like PatientsLikeMe to find out information about patients to sell data about consumers to drug makers. To read this very interesting article, click here.

It is disturbing to think that people are in medial chatrooms pretending to be patients in order to find out what drugs are being prescribed.  That kind woman you are chatting with about your hot flashes just may be a guy keeping track of your medical history.  For information on how to remove some of your personal details from the Internet, check out wsj.com/wtk.

Tainted Tylenol Ethical Issues

I teach several different ethics courses where we look at individual companies and how they handled ethical issues.  Beech-nut selling a product they called apple juice that technically had no apples in it, was a classic case example of a non-ethical way to do business.  

In the 80s, Johnson and Johnson had to deal with tainted Tylenol (The Tylenol Murders) due to product tampering. Their quick and responsive resolution to a potentially imagine-ruining situation has made J&J stand out as a good example of an ethical business. 

Now J&J’s reputation has come into question though as they used bacteria-tainted materials to create their children’s Tylenol.  Although they claim that only the raw material was tainted and the finished product showed no reports of illness, the company had to recall their product. The Wall Street Journal reported, “J&J’s handling of the problem has become a focus of a congressional investigation into manufacturing problems.  J&J has issued more than a half dozen recalls of popular over-the-counter medicines  over the past year.”

Inventions: Good Intentions Gone Bad

In my entrepreneurial and foresight classes I teach, we often talk about how some seemingly wonderful or harmless inventions have unintended results.  I often refer my students to a “Stuff You Should Know” podcast about Agent Orange.  If you are  creating a product or idea, have you considered all future consequences.  I highly recommend reading Jacob Silverman’s article at:  http://www.howstuffworks.com/agent-orange.htm.

Is it OK for Doctors to Use Social Media?

  With Twitter breaking the 20 billion tweet record, social media has shown it is becoming the way for people to communicate.  Businesses are using sites like Twitter, Facebook, LinkedIn and others to get their messages across.  Doctors have traditionally been slow to get into some forms of advertising.  Some feel it doesn’t seem professional.  Others just don’t have the time.  However, there are some things that social media could offer for many physicians such as ability to stay in contact with patients, answering common questions, possible virtual visits, and a general enhanced patient relationship.  

    The question may be where to draw the line?   Is it OK to offer medical information online if there is a demand for it?  The New York Times reported: a survey by Pew Internet and American Life Project reported 61% of Americans will go online for health information.   Doctors are looking for guidance as to what is acceptable in terms of how close of a relationship is deemed appropriate in terms of communication.  This has lead to the first set of guidelines ever published on using e-mail in patient care.   Anonymity is a huge issue when dealing with patients and HIPAA (The Health Insurance Portability and Accountability Act).  HIPAA was devised partly to ensure protecting the privacy of Americans’ personal health records by protecting the security and confidentiality of health care information.

    However, helpful information can be shared through social media if it is general in nature and doesn’t involve specific patient information.  Mayo clinic is even tweeting these days.  Are you ready to be friends with your physician on Facebook? Are there better avenues such as LinkedIn or other more professional sites where contact would be a better option?  Michael Lara, MD recently stated that he felt there are 5 social medial tools for physicians that he considers helpful:

  1.  Facebook Practice Page
  2. Google Reader for Medical Articles and News
  3. YouTube Channel for Patient Education Library
  4. Twitter for Connecting with Colleagues
  5. Practice Blog 

    I know a lot of physicians from my 15 years being a pharmaceutical representative and being married to a plastic surgeon.  From my experience, I see that they have a lot on their plates; learning social media may not be a priority for them.  That is not to say they may not benefit from hiring a social media manager.  Wouldn’t it be interesting to see which of your messages gets through to your physician in a timelier manner some day. . . the message you sent where you had to sit on the phone system listening to the recording asking you to push 1 for appointment desk, 2 for billing . . .  or the message that you tweeted to them quickly from your iphone . . .

CEO Ethics

Top ten ethical blunders

Rather than address the causes for ethical problems, companies too often simply create a filter for trying to catch infractions. This reactive approach failed in addressing total quality, and will fail in addressing quality in ethical orientation.

We now have over twenty years of experience with formal ethics structures in business. By and large these have become one-dimensional programs for delivering compliance, with very little impact on actual business strategy or corporate culture. Enron was touted as a paragon of ethical practices even while its executives plundered shareholder value, and its employees adopted ever more ruthless personnel policies. It is important to realize that such failures are not simply from rejecting ethics, but rather from misapplying them.

The Wrong Way to Strive For The Right Thing

In many ways the whole business ethics culture is at fault. Voluntary codes are not rigorous enough. Structures like ethics or integrity offices have become largely legal services grappling with compliance. Rarely do Boards or strategic planners accord ethics the serious consideration given to finance or marketing. And whistle-blowing systems have been adopted without protecting those who take the risk to do the blowing. Business ethics too often pivot on a business case: tolerated for contributing to reputation or protecting against fines, but considered optional if there is a cost to ethical adherence.  

The most common mistakes are in the most common practices:

  1. Adopting formal codes as a tactic rather than as a strategy, assuming rules will catch mistakes rather than addressing the underlying beliefs, motivations and culture.
  2. Managing ethics as a legal or PR variable rather than creating an operational culture that invites the hard questions and uncertainties of moral dialogue.
  3. Instituting systems of accountability to more clearly assign blame rather than to give more depth to the fiduciary duties for care, answerability and due-diligence.
  4. Defining ethics principles as a top-down or internal exercise rather than by means of a dialogue with stakeholders, critics and those impacted by corporate activities.
  5. Assuming that generic terms are enough to inspire employee adherence rather than interacting with them to discover the precise implications for values, attitudes and behaviours.
  6. Downloading ethical responsibility on employees as a parallel deliverable to business results without providing the tools, skills or leadership for effectively managing the conflicting objectives or ambiguities.
  7. Introducing whistle-blowing structures without creating the culture that supports dissent and rewards those who take stands based on ethical principles.
  8. Making ethical commitments without introducing the hard measures for evaluating and tracking the specific dimensions of trust and integrity.
  9. Embracing ethics programs during crisis or scrutiny without unlearning the habits and values that contributed to impropriety in the first place.
  10. Regarding ethics as a binary option without realizing that it is actually a process of constructive and iterative transformation that actually extends and enhances strategy. 

I teach several ethics classes. I think this is a good article written by the Center for Ethical Orientation. Many of my master and doctoral students are considering starting their own businesses. It is very important to have a strong code of ethics set up from the beginning and to be sure that this message is being delivered.