Alexandra Levit's Water Cooler Wisdom

Cautionary Tales About Work-Related Fraud

We all know that we can’t believe everything we hear and read, don’t we? Yet many of us are naturally trusting, leaving us open to fraud in the most unlikely of places. Let’s look at two real-life work scenarios in which a bit of skepticism would serve us well.

Scenario 1: The Research Study

Imagine that your boss has asked you to do some Internet research to find arguments supporting a new project or change of strategy. Naturally, you are thrilled when you come across a recent study on a respected business outlet that showcases exactly what you were looking for. You send the article to your boss right away, and before long, your entire initiative hinges on the claims in this single piece.

Trouble is, what if the article isn’t entirely accurate? I’m not saying that the author set out to mislead you, but let’s face it, most websites do minimal fact checking and editing. Unfortunately, it’s likely that the results were at least somewhat editorialized so the author could make his or her point. It’s also possible that the study on which the article was based was not scientifically sound or relevant in the first place. For instance, perhaps the sample was only a handful of people, or the respondents were only located in the U.S. If you are looking for support for a significant global trend, results like this aren’t going to cut it.

So, if you find a piece of research on the Internet and want to use it for something important, don’t risk relying on false conclusions and having to start over either before or after a scandal occurs. Do your homework upfront. Locate the original source of the research (journal article, etc.) and read the whole paper. If there are parts you don’t understand, tap a colleague or academic friend who can help you decipher them. Make sure the study’s overall conclusions enhance your argument, not just one piece taken out of context. Keep the original document on hand so that you can formally cite it later.

If, despite your best efforts, you can’t locate the original source, that’s a red flag. It could still be legitimate, but you simply don’t have enough information to risk it. Take a little extra time and move onto a stronger selection.

For the second cautionary tale and more advice, head over to Intuit's Fast Track blog.

Thankful for What You Have? – A HR Comparison Between US and UK

While in the U.K., I made some interesting observations with the help of the brilliant Lieven Lambrecht, a European HR veteran at First Data Corporation:

European workers are jealous of American workers because the U.S. has so many more job opportunities, and they are attainable if people have the right skills and interview well. What may appear to be a dead-end job can actually lead somewhere. American workers don’t have to fork over half their income in taxes, and employers actually care about developing their people.

European HR professionals are jealous of American HR professionals because we have to deal with so much less legal red tape, and our jobs are more scalable. Recruiting someone from Texas to work in New York is nowhere near the headache of recruiting someone from Hungary to work in Sweden. American HR professionals can afford to specialize because companies are so large that the HR function is as well. But

Who Is Jealous of Who?

I compare these sentiments with how we Americans feel about work conditions and the HR function in Europe. American workers bemoan the state of the U.S. job market and think moving overseas would make things a heck of a lot easier. We envy the opportunities Europeans have to travel and experience different cultures during their work lives. We love the fact that they can actually have personal lives because they aren’t working 70 hours a week. Their benefits are such that they don’t have to worry about going broke from healthcare costs and are guaranteed a safety net at retirement age.

On the HR side of things, American professionals think that it’s far simpler for European companies to recruit and retain diverse talent – a problem that sticks in the craw of most U.S. and global organizations. And they are jealous of the sexiness of the jobs European companies can provide to restless Millennials who want to go everywhere and see everything before they’re 30.

For more where this came from, head over to the full post at Intuit's Fast Track blog.

Go From Local to Global Without Leaving Town

The world is getting smaller. Even as the human population grows, technological advances make it possible to buy from, sell to and interact with people around the globe. Whether or not you have plans to expand your business internationally, it’s critical that you understand the big picture of your organization’s role in the world.

I recently spent several months in the United Kingdom learning just that. While overseas, I met with two dozen professionals in my areas of expertise. I enhanced my global competence, or my ability to understand how business works in different countries, and returned to the U.S. better armed to serve my clients. I recognized that in this area of globalization, I could no longer afford to be insular. And neither can you.

Fortunately, there are easy ways that you and your employees can boost your global outlook without traveling or launching a complex international operation. You can start by trying out some of the following tips.

Become a Student of Culture

Choose a country that interests you and learn about the daily lives of its citizens. Read the daily paper and popular novels, and watch TV shows online. Check out the social networks and see what people are talking about, leveraging a Web translator if you need to. The minutiae will tell you more about the culture than you would ever learn as a tourist. 

Meet Owners in Other Markets

Are there businesses like yours overseas? If so, virtually introduce yourself to their management and talk about similarities and differences. What did their journeys look like compared to yours? What challenges and opportunities do they address on a regular basis, and are there ways you can help one another? You never know—what starts out as information gathering could turn into a valuable partnership.

For more tips, check out the full post at the AMEX Open Forum.

Why You Should Care What Employees Do Off-the-Job

Most companies will not hire someone who is a convicted felon. They will, however, hire people who have received speeding tickets and citations for disturbing the peace. They will also hire people who spend money without care in their personal lives.

But maybe they shouldn’t. According to recent research from the National Bureau of Economic Research (NBER), an executive’s record of disobeying the law as well as his or her spending habits outside of work are related to on-the-job performance.

The report, “Off-The-Job Behavior, Corporate Culture, and Financial Reporting Risk,” examines how and why two aspects of CEO behavior outside the workplace, as measured by prior legal infractions and the ownership of luxury goods, are related to the likelihood of misstated financial statements and playing fast and loose with the company’s cash.

Of 110 firms that committed fraud as identified by the SEC, 20 percent of the CEOs had a record at the time of the fraud. And while the luxury-owning CEOs were no more likely than frugal peers to misrepresent financial information, they generally took bigger gambles at work. 

Lawbreakers and big spenders often suffer from a lack of control, which is related to poor decision making. NBER suggests that this type of executive is more prone to engaging in spontaneous large acquisitions and less prone to investing in sensible long-term growth. He or she is less likely to manage existing assets efficiently, and more likely to go bankrupt.

Getting the Scoop … Beforehand

As a small-business owner, every hire you make has a substantial impact on your operations. Even a cashier in a fast-food restaurant has the opportunity to make accounting mistakes or liaise with customers in such a way that shows a disregard for profitability or safety. You can’t assume that employees will leave their bad behavior or poor judgment at the door when they come to work for you. In all likelihood, what they do off-the-job will have at least some impact on what they do on-the-job.

With respect to the traits discussed in NBER’s research (disregard for the law and lack of frugality), you can assess candidates before you hire them. First, make sure your background checks include not just criminal activity but other legal infringements too, and see if you can detect any patterns. For example, one parking ticket is an anomaly, but 10 unpaid parking tickets in a year should tell you something.

For other suggestions, head over to my Culture Beat column at the AMEX Open Forum.

Q&A with Lindsey Pollak: Adapting to the Future Workplace

Companies and employees alike are figuring out how to adapt to continued innovations and changes to the workplace. Work is no longer an office where you sit from 9 to 5 every weekday. But what do these changes to the workplace mean for employers?

My friend Lindsey Pollak has partnered with The Hartford on its My Tomorrow campaign, which aims to educate workers on how they can protect their paychecks through things like disability insurance so that they can stay on track with their finances. As part of the My Tomorrow campaign, Lindsey has written a trends forecast that offers employees and employers advice on how to adapt to the workplace of the future. I sat down with Lindsey to hear about what employers can do to continue to attract and retain employees despite changes in the workplace.

We all talk a lot about the new generation of workers entering and changing companies. How do you explain the way Millennials, or Gen Y, are actually changing the workplace?

Millennials are 80 million strong, which is bigger than Boomers, who come in at 76 million. This giant generation – what I call a tidal wave – is expected to comprise almost 50 percent of the workforce by 2020. The younger end of this generation are landing their first jobs while the older end are married, with families, holding managerial positions. Millennials grew up adapting to change, know little else than having technology constantly at their fingertips, and have seen innovations transform society out of nowhere (think Facebook or the iPod). They are taking this mindset and applying it to the companies they work for.

When you say “apply it,” what do you mean?

As Millennials take on leadership roles, they are making changes that align with the mindset of their generation. Perhaps that’s rethinking the recruitment process or implementing innovations for business operations. But, more immediately, it means that Millennials who are looking to advance their career expect certain things, based on their experiences and overall changes in our culture, which employers haven’t had to be prepared for with other generations.

What are these expectations, and what do employers need to do to meet them?

In my first Tomorrow @Work trends forecast with The Hartford, we cover trends in the workplace that are directly related to the changing generation dynamic. The first trend is that employees see flexibility in working arrangements as an essential, not a perk. With all the technology available, work is no longer a place. That means employers must define and clearly communicate about “expected work,” particularly if it is beyond the traditional 9-5 workday. It might vary for employees at different levels, roles, or locations. Are managers expected to be reading and responding to emails 24/7? What activities would count as overtime? And what personal activities (personal phone calls, online shopping) are acceptable during work hours? I’ve found that Millennials like flexibility but welcome some direction. One example would be a manager allowing her team to work remotely for two days a week, but the entire team being present in the office on Mondays for the weekly update meeting.

Millennials have grown up with customization their entire lives. They have started looking for job opportunities that are tailored for their personalities, interests and goals. To respond to this expectation, employers can consider asking employees where in their jobs they want customization, within reason. For example, could employees have a small say in their own job descriptions? Can you crowdsource the next change to the office workspace?

Any other takeaways?

Definitely! Social media is an increasingly important recruiting tool and is not going away, so employers should use employees as the company’s brand ambassadors on social media. Companies can help their employees be good ambassadors, such as offering training on professional use of social media. I’ve found Gen Y workers are comfortable with using social media personally but can benefit from advice on how to use social media professionally to advance their career.

Another big trend is the fact that today’s workforce is comprised of multiple generations. You could have up to three generations of workers in one location, team or project. Think of the 18-year-old bagger working at a supermarket alongside a 60-year-old greeter and both managed by a Gen X-er.  Good news is, The Hartford’s research found little friction among generations. In The Hartford’s 2013 Benefits for Tomorrow Study, 90 percent of Millennials agree Baby Boomers bring substantial experience and knowledge to the workplace, and 93 percent of Boomers believe Millennials bring new skills and ideas to the workplace. Employers can capitalize on that by implementing co-mentoring programs, in which employees of different generations share knowledge. And make sure to have each generation in your office present for discussions around company policies and key decisions.

How to Avoid Self-Destructing on Foreign Soil

On April 20, 2010, the oil rigger Deepwater Horizon exploded in the Gulf of Mexico, causing the largest accidental marine oil spill in the history of the petroleum industry.  After the explosion killed or injured 28 workers and released 4.9 million barrels of crude oil, the gushing wellhead was finally capped. British Petroleum (BP), the multi-billion dollar oil and gas company, was indisputably responsible.

Instead of expressing true remorse and compassion for the disaster, then CEO Tony Hayward committed a series of cultural gaffes that enraged U.S. citizens and lawmakers. For instance, well before the Gulf crisis was resolved, Hayward proclaimed that he “wanted his life back.” Then, as efforts to plug the leak continued feverishly in the U.S., he casually took in a sailing race with his son off the Isle of Wight in the UK.

Hayward’s American Disconnect

This behavior was consistent with Hayward’s work/life balance philosophy.  He once said publicly that he didn’t work weekends and took all of his holidays no matter what.  What the British Hayward failed to realize was that most Americans don’t necessarily agree with this point of view. It is the American way to take responsibility for one’s mistakes and do everything you can to remedy a bad situation. Until the problem is solved, free time does not exist. Since Americans were affected most when Deepwater Horizon exploded, many wanted to see Tony Hayward on a boat participating in the clean-up.

Although much of his business is conducted in the U.S., Hayward did not demonstrate strong global competence. His lack of understanding regarding how the crisis would be received in the U.S. led to a backward slide of goodwill and a plunging stock price for BP. That summer, it would also cost him his job.

To find out how you can avoid a Tony Hayward-like PR catastrophe, read my advice over at the AMEX Open Forum.

 

Happy Election Day: Worst Political Gaffes

Reuters journalist and ShortFormBlog contributor Matthew Keys compiled a hugely entertaining list of the worst political gaffes recently made on the job, which incredibly, did not include anything from Obama OR Romney:

Rick Perry’s Brain Freeze at CNBC’s Republican National Debate

“It’s three agencies of government, when I get (to the White House), that are gone: Commerce, Education and the — what’s the third one there? … I can’t. The third one, I can’t. Oops.”  Uttered in November 2011, this line became the hallmark for the rest of Perry’s presidential nominee campaign.

Joe Biden’s Foot in Mouth Moment with the Affordable Care Act

As Obama signed the Affordable Care Act into law, the vice president dropped an F bomb on live television, enthusiastically stating that the passage of the bill was a “big f-ing deal.”  It was, of course, the line heard round the world.

For others, please check out the full post on the Fast Track blog.

Many Small Businesses Are Not Sustainable

As Kelly Spors wrote in a March article for Small Business Trends, environmental sustainability isn’t nearly as prevalent in small businesses as it is in the corporate world. “Sure, some small businesses have jumped on board and are leagues ahead when it comes to energy efficiency and conservation,” she says. “But plenty of them have done practically nothing to go green and continue to operate the same way they’ve operated for 10, 20 or 50 years.”

A recent survey by the Boston Consulting Group and MIT supported this point of view, finding that only nine percent of small companies (fewer than 1,000 employees) fully embrace sustainability. The reasons vary, but most have to do with the time and money small-business owners feel is required to make the necessary adaptations.

In my Culture Beat column at the AMEX Open Forum, I explore three ways small businesses can become better public citizens without losing their shirts.

Are Women Catching Up To Men? Not Exactly.

Unfortunately, research demonstrates that there is still a large disparity in the number of high-paying positions held by women and men; and women haven’t made tremendous progress in the last six years in closing that gap.

According to the 2011 Catalyst Census: Fortune 500 Women Board Directors, Executive Officers and Top Earners and prior Catalyst Censuses, women have made no significant gains in the last year and are no further along the corporate ladder than they were six years ago:

• Women held 16 percent of board seats in 2011, compared to 15.7 percent in 2010.
• Less than one-fifth of companies had 25 percent or more women board directors.
• About one in ten companies had no women serving on their boards.
• Women held 14.1 percent of Executive Officer positions in 2011, compared to 14.4 percent in 2010.
• Women held only 7.5 percent of Executive Officer top-earner positions in 2011, while men accounted for 92.5 percent of top earners.
• Less than one in five companies had 25 percent or more women Executive Officers and more than one-quarter had zero.

This is not good news for companies that are hoping to remain competitive. Catalyst research also showed that gender diversity in the boardroom correlates with better corporate performance – by a huge margin.  Companies with three or more women board directors in four of five years, on average, outperformed companies with zero women board directors by 84 percent return on sales, 60 percent return on invested capital, and 46 percent return on equity. Whoa.

But how can companies with a dearth of female talent turn things around?  Have a look at my advice.

 

Why You Might Make Less Money Than Your Colleague

You might be equal to the colleague in the next office over and still make less money.   Here’s one reason – your gender.

One of my readers just shared a horrible story.  She works in a major accounting firm, and found out – definitively – that she’s making 20 percent less than her colleagues of the male persuasion.  “Women are relatively new to the accounting world, and there is a perception that management shouldn’t invest in people who are just going to have babies and leave,” she told me.  “The thing is, I don’t think my situation is that unusual – it’s still an old boys’ club.”

In a 2010 article for Harvard Business Review, Investigating the Pay Gap, Sarah Green says that the median salary of a woman is still only 78 percent of a man’s. This means that women have to work 16 months to earn what men make in a year.

Woe to New College Grads

According to the American Association of University Women, the gap between men’s and women’s salaries starts immediately after entering the workforce.  Just one year out of school, a woman earns 80 percent of what a man earns.  After controlling for industry, type of job, prior experience, and other characteristics, this gap closes to 95 percent.  The unexplained five percent gap is viewed as evidence of bias.  After 10 years, the average woman earns only 69 percent of what the average man earns, and the unexplained gap has widened from five percent to 12 percent.

Level and Age Don't Help

Also as reported in the HBR article, The Center for American Progress went a step further and tracked wage gaps by age and occupation.  The organization found that by the end of their careers, male managers have made $635K more than their female peers.  Apparently, wage discrimination doesn’t get better as you get older, more seasoned, or better educated – it gets worse.  If you’re female, no matter how well you perform, your raise simply might not be as high as your male colleague’s.

This post was originally published on Intuit's Quickbase blog.