Want a Raise? Take Your Boss Hostage!

               The French are famous for many things. The Eifel Tower, fine wines, delicious baked goods, impressionist art and a general sense of haute couture. However, we do not usually think of the French when it comes to the art of negotiation.

               French labor unions have mastered a new technique for negotiations. French workers are known for going on strike to express their dissatisfaction. Taking it a step further, workers have taken to kidnapping executives in order to make a point and make their demands.

               In a Goodyear plant, located in Amiens, France, union workers were frustrated by the company’s plans to close the plant. The union apparently had enough. Two of the plant’s executives were held in an office at the site and the doors were blocked off with large farm tires (after all it was a Goodyear plant).

by Rubohcity from Wiki Commons

               The two bosses were allowed to keep their cell phones and communicate with family while the union presented its demands. The workers wanted a severance package of $108,000 for each employee, plus $3,400 for each year worked. Who wouldn’t want a deal like that?

               As it turns out, it is somewhat common for French unions to hold company leaders hostage. It certainly helps create media attention and perhaps sympathy, at least by some people. The legal penalties seem relatively minor for these offenses. It is almost like an inside joke, a way to vent frustration with a stingy boss or company. In this case, the two men were released after being held for two days. Unfortunately, the union members also set fire to tires around the perimeter of the site, creating clouds of black smoke.

               In the past, executives from other companies, such as 3M, Sony and Caterpillar have been held hostage during labor negotiations. Company leaders working in France may need to start demanding ‘danger’ pay to compensate for the risks.

               On the serious side, this was part of a long, ongoing feud between executives and the workers. Ironically, the left-wing union, accused French President Francois Hollande, a member of the socialist party, of working in cohorts with the business.

               The lesson here is a reminder to keep in mind the morale of employees and consider the impact on an organization. It may not result in someone blocked into an office with tractor tires in the doorways, but ongoing tension can lead to acts of workplace violence or sabotage. Businesses cannot bend to every demand or union bargaining tactic. However, leaders should give realistic thought to concerns such as raises, bonuses and the general well-being of employees. Overlooking those concerns can, in the long run, be detrimental to the bottom line.

               For companies operating in other countries and dealing with other cultures, it is a valuable reminder to consider differences as to how businesses operate, and the associated risks from work stoppages to executive kidnappings.

               In the meantime, if you want a raise, consider the “French Press” method of negotiation and hold your boss hostage. Of course, along with the raise, you may want to ask for immunity too.

              

Eric Smith, CPP is the leading authority on organizational self-defense. He has extensive experience in law enforcement as well as security management. Eric is available for staff education and security awareness training as well as business coaching to help organizations provide safe workplaces. To learn more email Eric at businesskarate dot com.

 

 

If you would like to reprint this post, please contact Eric at Eric at businesskarate dot com.

4 Lessons from Wal-Mart’s Bribery Scandal

Bribery, corruption, illegal activity and lawsuits may make for a great Hollywood movie or an exciting novel, but when it involves your business, it can be disastrous.  Wal-Mart has found itself in this position over the last several weeks as allegations of $24 million in bribes were paid to Mexican officials in order to expedite the building process for new stores.

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The bribes reportedly started several years ago.  At one point, an internal investigation was conducted and was terminated when the recommendations came out that possible violations had been made and the incident should be reported to both Mexican and U.S. officials.  Allegations now point that senior executives within Wal-Mart were aware of the bribery and legal issues, but chose to do nothing.

The initial fallout has included a drop in the U.S. stock price for Wal-Mart, threats of lawsuits by shareholders, plenty of negative publicity and even possible criminal charges for violations of the U.S. Foreign Corrupt Practices Act. 

Lessons Learned

With any situation like this, it is a good time for reflection and looking at what lessons can be learned.

1. Don’t get cocky.  The first key point is that this could happen to almost any organization.  If you take the outlook that your enterprise could be vulnerable, then that is a major first step for making sure that your company doesn’t end up on the front pages.  By realizing the potential, serious steps can be taken to remove both the temptation and the means to become involved in corrupt practices.  Fraud, embezzlement or corruption can come at the highest levels and the higher in a corporation the higher the loss amount.  No one is above suspicions.  Bernie Madoff was a well-known financier and well respected, but committed one of the largest Ponzi schemes in history. 

2. Be wary of justifications.  Police officers talk to crooks, thieves, violent offenders on a daily basis.  When asking a suspect why they did what they did, invariably the response will involve some kind of justification.  It was not as bad as what someone else did.  “I only took a joy-ride in a car; it’s not like I murdered anyone.”  “He was going to kill me if I didn’t get him first.”  “She was cheating on me, that’s why I beat her good.”  No matter the crime, crooks will try to downplay or come up with excuses to justify it.  When employees at any level start justifying their actions, be very wary.  This could be the first step down a path that should not be followed.  In the case of Wal-Mart, it would be very surprising if there were never conversations that mentioned all businesses are doing it (paying bribes).  Or, that is how that country operates.  It is the only way to succeed without wasting time.  It didn’t hurt anyone.  All are likely excuses that an executive turning a blind eye probably made and many times over.

Suspects commonly try to justify their crimes.

3. Leadership cannot be ignorant.  The mindset or culture of honesty starts at the highest levels.  If an organization’s leadership ignores or deliberately remains in the dark about business operations, then it is much more likely to have corruption or fraud running unchecked.  In the case of Wal-Mart, the amount of the bribes was relatively small compared to the company’s worth and budget.  However, it would be interesting to know what questions the board asked about the subsidiary's growth in Mexico.  The country has been listed on the State Department’s travel advisory list due to increasing violence, it is well known that bribery, and corruption, is commonplace.  Did the board ever question how the growth projections were being met and what steps were being taken to ensure that Wal-Mart followed all the requirements of the Foreign Corrupt Practices Act?  As some pension groups have already sued the directors, hopefully the answers will come out down the road (although there will almost certainly be a settlement tied to non-disclosure of the terms). 

4. Pay attention to the warning signs.  Some warning signs may be subtle, such as unexpected acceleration of growth plans (presumably, the bribes would have achieved that).  Some warnings are not so subtle, such as a whistle-blowing warning of violations or an internal investigation that identifies possible legal issues and is shut down.  Again, if the highest levels of the organization are left in the dark or do not take action, the enterprise is very likely to end up with problems.  The board should review all serious allegations and investigations and be kept advised of the outcome.

Wal-Mart will survive this scandal.  The stock price will recover, lawsuits will be discretely settled and eventually the PR dust up will blow away.  For most organizations, however, this kind of scenario would spell doomsday.  Take steps to avoid becoming embroiled in corruption through solid and ethical leadership, open communications and a clear eye on the potential risks.

Eric Smith, CPP is the leading authority on organizational self-defense.  He has extensive experience in law enforcement as well as security management.  Eric is available for staff education and security awareness training as well as business coaching to help organizations provide safe workplaces.  To learn more visit http://www.businesskarate.com. 

If you would like to reprint this post, please contact Eric at eric@businesskarate.com. 

Global Water Cooler – War, Crime and Scandals From Around the World

            Everyday around the world there are so many different things going on, it is hard to stay caught up.  Some are interesting; some tragic; some exciting; and others may have a direct impact on our lives and even on how or where we operate our businesses.  At the very least, a summary of some of the topics will give you something to talk about around the office ‘water cooler’ or something to think about when planning your global operations. 

North Korea

Last week, North Korea tested a rocket claiming it was going to be used to launch satellites.  The concern was that the rocket could have been used to fire nuclear bombs into Japan or even the United States.  Fortunately, the rocket blew up shortly after lift-off.  This was considered a violation of recent international agreements reached in February, in which food shipments were promised in return for non-proliferation of arms and nuclear testing.  The US has announced that it will stop food shipments to North Korea and reinstate sanctions.

Impact – Any hoped for change in North Korea under the new regime seems unlikely at this point.  Don’t count on new markets opening here.

Myanmar

British Prime Minister David Cameron visited Myanmar, formerly Burma, to assess recent changes in leadership.  The government is still dominated by the military, but key elections in Myanmar’s parliament have ignited confidence that the country could be changing.  EU sanctions are likely to be lifted (expect for an arms embargo) and both European and US companies are looking for potential business opportunities, especially in construction and healthcare.

Impact – This could be a great business opportunity as the market starts opening up to international companies.  Myanmar is the home of the longest producing oil field.  Beware, though, only about 25% of the country is on the nation’s electrical grid meaning very limited infrastructure.

Paris

A serial killer has been roaming Paris and has killed two women and two men with the same gun according to ballistic tests.  The killer struck three of the victims from a scooter wearing a helmet as a disguise.  French police arrested two suspects, one of whom was later released as a victim of identity theft while the other remains in custody and is expected to face charges.  However, he has not confessed as of yet.

Impact – More of an interesting story than having a real impact, but the fear and concern was increased due to the similar style attacks in southern France that left several dead, including victims at a Jewish school and three paratroopers from North Africa.  The suspect in that case died after a shootout with police as he jumped out of his apartment window.  That suspect had ties to Al-Qaeda and traveled to Afghanistan for training.

Sudan

South Sudan broke off from Sudan in 2011, after a six-year ‘waiting period’ following a bloody civil war ending in 2005.  In recent days, the fighting has escalated with reports of air attacks and bombing along the border.  Heglig, a city in Sudan, was seized by South Sudanese and bombed by Sudan during the fighting.  There are reports of fighting all along the border region.

Impact - Fighting in the area is nothing new, but the increased violence does pose concerns for the region.  Sudan borders Egypt and Libya, as well as Chad and all are suffering instability in light of recent changes in government and leadership.  Al-Qaeda has been active in the region so this certainly poses a concern of attacks on European and American interests as well as potential new footholds for the terrorist group.  The situation is ripe for exploitation by terrorists groups as Sudan is primarily a Muslim country and South Sudan is predominantly Christian.

Syria

A very fragile cease-fire has been put into place, but the fighting continues with government forces reportedly bombing areas near the Turkish border.  Turkey has been dealing with refuges crossing the border to escape the violence.

Impact – Only time will tell.  The current government has brought a certain amount of stability to the area, but at a cost to the county’s own people.  Since opposing forces have begun speaking up, more than 11,000 people are thought to have been killed.

China

In a growing scandal, British businessman Neil Heywood was murdered by Gu Kailai, the wife of one of the top communist party leaders, Bo Xilai.  Heywood’s death was originally thought to be alcohol-related, but it now appears that he was poisoned.  According to the Times of India, he threatened to report Kailai after she wanted him to move a large sum of money and he demanded a larger percentage, which was refused. 

Bo Xilai has been removed from office and the corruption has prompted calls for action to rid the government of corruption.

Impact – This may prompt some changes throughout the government and clean up some forms of corruption.  However, it seems that corruption will find a way and that dirty politicians will manage to contrive ways to cheat the system.  In the long term, probably no real impact, but an interesting story nonetheless. 

Eric Smith, CPP is the leading authority on organizational self-defense.  He has extensive experience in law enforcement as well as security management.  Eric is available for staff education and security awareness training as well as business coaching to help organizations provide safe workplaces.  To learn more visit http://www.businesskarate.com. 

If you would like to reprint this post, please contact Eric at eric@businesskarate.com. 

Feeding the Hand that Bites You – Lessons from Libya

Eric Smith, CPP

               Just before Christmas 1988, the 747 took off from Heathrow for New York.  Less than an hour later, a bomb on the airplane exploded.  The plane quickly began to split apart and the cockpit broke off, beginning a freefall that lasted about two minutes.  Passengers not strapped to the fuselage were blown out of the plane.  Forensic experts believed that the passengers would have lost consciousness initially due to the rapid change in air pressure, but that they may have regained consciousness before the plane hit the ground, a terrible possibility.  The wing of the plane hit several homes in Lockerbie Scotland, killing 11 people including at least one entire family.  In total, 270 people were killed in the horrific attack.

               The investigation revealed that Libya was behind the attack and as recently as February of 2011, a former Libyan minister reported that Muammar Gaddafi, Libya’s dictator, had personally ordered the bombing.

               There is no doubt that Gaddafi is evil.  So when rebels began protesting earlier this year and fighting against his regime the obvious choice was to help the rebels.  NATO finally responded to support the rebel forces with France taking a leadership role even taking further actions and supplying arms to the rebels despite complaints from Russia and China.

               Le Figaro and Bloomberg Business News reported that some weapons supplied to the rebels, the National Transitional Council, were recovered from al-Qaida in the Islamic Maghreb (AQIM) forces in northern Africa.  AQIM forces have been fighting the security forces of several countries in the region.  Among the weapons finding their way to al-Qaida extremists are rocket launchers, rifles and Semtex.  Ironically, Semtex is the same plastic explosive used on Pan Am 103 in Lockerbie. 

               We’ve all heard the expression “don’t bite the hand that feeds you.”  Unfortunately, in this case, we see an example of the opposite where we are feeding the hand that bites (or slaps) back. 

               This type of risk is not limited to international terrorism or global conflicts.  The same is true in other settings, where individuals or organizations try, with the best of intentions, to help someone or some group, but open themselves to risks.

               Healthcare is a good example.  Violence against care providers is rampant within the healthcare industry, especially for anyone working with mental health patients or in emergency departments.  Nurses trying to help patients are the ones most likely to be attacked by that same patient.

               The good news is that there are lessons to be learned, lessons that can be applied in other situations, whether opening an international business operation, dealing with global conflicts or even violent behavior by a patient.

1.     Consider the unintended consequences.

2.     Identify the players.

3.     Control the game.

4.    Don’t ignore the warning signs.

Consider the unintended consequences.  This is perhaps the trickiest part of risk management.  Risk assessments are based on known or threats and vulnerabilities.  The key is to look beyond the surface and develop an understanding of how different pieces of the puzzle fit together.  In a chess game, a player needs to think five moves ahead and all the possible contingencies depending on what their opponent does.  Be willing to think through a wide range of scenarios and ask yourself what if questions.  This approach can help identify hazards that might have been overlooked.  Or even reveal opportunities that could have been missed.

Identify the players.  In real life, it can be very hard to find out who the good guy is or who the bad guy is.  Even in the case of healthcare, the belligerent, drunk patient may not do anything physically, but the grandmother with dementia may attack the nurse, without knowing what she is doing.  In the situation in Libya, it should have been clear that some rebels may have ties to al-Qaida and that, at some point, weapons would find their way to extremists. 

Control the game.  You cannot control every element or risk factor, but it is critical to limit your exposure to potential risks.  If you are expanding an international business, or any commercial undertaking, it makes sense to try to mitigate the items that you have no control over.  In Libya, France should have used tighter control on the arms shipments and who was receiving them.  For instance, air dropping the supplies to known individuals and in smaller quantities until their trust was ensured.  In business, the easiest option may be to rely on one supplier for critical items.  To control the game, identify alternative suppliers and have a backup plan in case the primary source is not available. 

Don’t ignore the warning signs.  It is extremely easy to focus so intensely on accomplishing a goal that we overlook warning signs.  Across the Middle East, there have been worries about the rebels in Egypt, Syria and Yemen and the ties to Islamic extremism and terrorism.  The same concerns apply to the National Transitional Council and some of the individuals fighting Gaddafi.  The same is true in areas such as healthcare.  Too often, nurses ignore the warning signs of escalating violent behavior until the patient is punching, kicking or biting employees. 

These tips can help with business negotiations as well as national security.  And sometimes, the best course of action is to walk away.  With the Libyan situation, unless we can follow the rules above, NATO and France could be getting into a no-win situation. 

Eric Smith, CPP is available for business coaching services.  His emphasis is on security and operational risk management.  To learn more about coaching or security training, contact Eric at eric@businesskarate.com.      

Mother Hubbard’s Cupboard, Supply Risks and National Security

               I know what you are thinking.  What could a nursery rhyme possibly have to do with national security?  Well, a lot actually.  You may recall what happened with Mother Hubbard’s cupboard.  She went to her cupboard, discovered it was bare, and couldn’t give her dog a bone.  There is no mention of what the rest of her family did, but the dog certainly had to go without. 

Unfortunately, we’ve seen a lot of potential risks recently, especially in regards to supply chain risk.  Supply chain risks are something that businesses have to deal with on every level.  School districts already looking at making budget cuts, still have to buy fuel for school buses.  Businesses need to buy supplies or goods to manufacture their products or to use in their businesses.  Even service companies have to deal with supply issues.  Imagine if you have uniformed staff and the overseas company that normally supplies a part of your uniform is no longer available.

Generally, these kinds of supply chain failings happen on a micro level and go unnoticed by most of us.  However, recently there have been a number of high-profile cases that stress the importance of supply chain risk management, not just on a small level that affects individual organizations, but also on a national level.  Some examples even affect our national security posture around the world.

First, there was the earthquake in Japan.  The financial aftershocks still rock businesses internationally.  Among all the horror stories and the loss of life, the impact on Japan’s economy has been becoming clear.  One example of the impact has been on the auto industry.  The line between American-made cars and Japanese cars has become more and more blurred in a global market and even American car companies realized that many of their parts were made in Japan and the supply was interrupted as a result of the quake.

As this was going on in Asia, the Ivory Coast has been embroiled in revolution and violence.  About 34% of the world’s cocoa beans for chocolate come from the Ivory Coast.  The exportation of cocoa has been on hold for months affecting the prices.  Some analysts think that the situation is nearing the end and cocoa prices have started to drop (of course, how much of the savings gets passed back to the consumer versus lining corporate pockets remains to be seen).  Who would have thought that political unrest in the Ivory Coast would influence the price of chocolate?

Last, there is the Middle East.  The civil unrest has been spreading from one country to another, Egypt to Libya, Syria, Yemen and even Jordan.  The clear risk lies in the supply of oil, a commodity that industrial countries cannot do without.  Even the risk of closing the Suez Canal sent fuel prices skyrocketing.

So what are the real life lessons?  Certainly, you cannot predict every potential problem.  However, this is where a risk assessment can help identify the risks associated with certain supply chains.  And more importantly, once you’ve looked at your risks, take the necessary corrective action.  As with many security issues, one of the biggest, often fatal, mistakes is to ignore the warnings and go own our merry way.  That is the equivalent as walking down a street and seeing a gang of thugs blocking the sidewalk and you decide to push right through.  Pride aside, the safer course would be to cross the street and avoid the problem – but who does that?

Once you have identified your risks, create a back-up plan – a business continuity plan.  What will you do if a key ingredient is missing?  It could be a simple solution or complex, depending on your organization.  If you run a coffee shop, what is the risk if the newspapers aren’t delivered before your morning customers arrive?  Minimal, maybe, but you still risk having a first-time customer not coming back.  What if you manufacture some type of good or product?  Do you have a back up in case a critical product piece is not available?  A snowstorm or natural disaster or dockworker strike could interrupt your flow from thousands of miles away.  Identify a replacement part from another supplier, preferably one that even comes from a different part of the world.

The simple, step-by-step process is:

1.      Review the goods that go into your business.  Do not overlook the small things.  Imagine shopping for Christmas, buying all the presents to give out, selecting the wrapping paper, go home to wrap on Christmas Eve, only to discover that you have no tape.

2.     Find out where your supplies come from.  How stable or secure are those vendors and also the regions or countries where they are located.  In turn, each of those vendors has suppliers of their own, so the ripples could run several layers deep.

3.     Develop a back-up plan.  Either have a plan to use alternate materials or build a store on hand for interruptions.

4.     Follow the plan.  All the best intentions in the world will do you no good, if you do not follow through.  It is the equivalent of having a great recipe for your favorite dinner, but no ingredients to cook it with.

            And as for our oil supplies?  Clearly, we are making a huge mistake being dependent on one region of the world for a critical supply where a large number of people want to destroy or fight against Western civilization.  The obvious alternative is to develop other sources of fuel; both for our current needs, such as oil, and also develop future sources of energy.  Otherwise, we will truly wake-up and find that our cupboard is as bare as Mother Hubbard’s.