High-profile incidents of corporate misbehavior around everything from sexual harassment to carelessness with customers’ data have received a lot of recent media attention. As companies scramble to respond to such incidents, there’s a big shift underway from a cultural and risk management perspective. Phil Rowley, Berkeley Research Group’s Executive Director and Chief Revenue Officer has spent time in the trenches with these issues, building successful teams and setting them up for success. Consulting recently caught up with Phil to discuss some of these thorny issues.
Consulting: You’ve been exploring the topic of high-profile incidents of fraud or harassment at big companies, how did that come to pass?
Rowley: Part of that was related to specific opportunities where we were asked to come in, it varied whether that was by the board, a management team or outside counsel directing those efforts. Like many of us in this space, we had a series of calls looking for counsel, looking for what type of assistance could be offered. In many of these instances we’re discussing, of course there’s the immediate PR and how to respond, there’s been criticisms of how companies have handled certain things in the public domain. What they were looking for from us is how do we put into place protocols and procedures that change that dynamic and help identify those types of issues. Are they cultural issues? Compliance issues? Business operation issues? My effort was to call into my network and ask how are you looking at these things. It was very much a self-education process so I could think about what would be our offering to the marketplace.
Consulting: What do you see as the consulting opportunities around it?
Rowley: There’s the obvious ones that are more crisis oriented and then that are reactionary that are going to drive demand. In those areas there are specific offerings we have built around our talent primarily, although we’re looking at different types of applications of technology. Some could be as simple as cultural survey tools and assessment tools for boards, we’re looking at some of those tools. What I’m looking for from a CRO standpoint is where are there unique times, pivots in an organization where it really makes sense for them to invest in some of this, it’s really a partnership and a listening between a board and management, which is part of great governance. A lot has been written about founders and a need to change and differentiate skills as you evolve, i think that may also be true of a board and governance.
Consulting: What can companies look for in hiring practices to prevent these problems before they start?
Rowley: Everybody has an HR department, you have a head of recruiting, you have a legal department, we do background checks. A lot of those fundamental protocols are in place. I think then what’s critical from a governance standpoint is to ensure we aren’t creating incentives to do something wrong. That’s important culturally. That will come out in the hiring process. In the vetting of folks, really getting an understanding of what is important culturally, and as you’re talking about that, spending a little more time asking for examples of how they interact with teams. I think we should ask some tough questions and see if the person rationalizes improper conduct, we certainly see that in the public domain now, there’s a variety of things where people are rationalizing what historically has been seen as unbecoming conduct. Gaining that understanding can put things into context.
Consulting: What about outlier situations, inappropriate social media posts, etc.? How are companies handling damage control?
Rowley: First you need to get to the facts. You don’t want to have a rash and hasty response, in particular where there could be legal ramifications. I think over-communicating is helpful, but there has to be a consistent message there. We’ve seen examples in some of the troubling situations where there were mixed signals from management or even a lead board member that was confusing. I think some of it goes to process though. I think it’s important knowing there is a process in place that has been articulated and will be followed. In the absence of knowledge there seems to be a rush to fill that vacuum and more often than not it appears to be misinformation. I think the best way from a governance standpoint is to ensure there’s a process in place and then to articulate that process and assure people it’s fair.
Consulting: What direction do you see the compass needle pointing in terms of a corporate cultural shift regarding these types of incidents?
Rowley: Coming up with a reasonable program to manage that type of risk is important. If the brand is about culture, about individual brand ambassadors, about how the company treats its clients, its buyers, its stakeholders, most importantly including its employees, that’s just been the whole risk to the enterprise if it gets out that that type of culture is tolerated. That’s how it needs to be viewed. Increasingly and more consistently, there were certain firms and entities that probably had in place certain protocols and were more thoughtful. Many professional services organizations, like mine, have been thoughtful about this for years. It isn’t one type of organization, it isn’t one industry. Because it’s real life, because it is humans you can’t just limit it to one type of organization or culture. I do think now increasingly and much more consistently it’s being addressed and thought of.