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How bad management and poor culture can ruin your business's reputation

Jason Ennor, Co-founder and CEO at MyHR

by Jason Ennor, Co-founder and CEO at MyHR
July 12, 2017

Over the last few weeks 3 major employment issues have resulted in reputation damage and significant, unnecessary cost to 3 well-known organisations:

  • Todd Barclay and the National Party.
  • Matt McCarten and the Labour Party.
  • Travis Kalanick and Uber.

In all cases, bad management and a lack of employment standards resulted in questionable behaviour and big problems.

HR people, like me, regularly talk about this sort of thing. While we don’t like to use negative examples as leverage, it is seldom we have this many, this significant, all at once!

The message is pretty clear for business owners and leaders:

  • Don’t underestimate the impact poor employment practices can have on the organisation.
  • The cost of settling grievances (including lawyer’s fees, settlements and time) is significant.
  • The damage to reputation and credibility will affect your ability to attract talent and customers (or voters in the case of the parties).

Brands with less resilience than National, Labour and Uber may not survive such turmoil.

Solid standards and a clear people strategy is a critical first step. Then this must translate to action and behaviour. Ensuring your culture and employment practices are high-quality is a key pillar of any business and should be a fundamental part of any business plan, underpinned by regular check-ins and follow-up. Stay connected to your people.

While each of these cases will have many sides and some aspects may have been sensationalised, when it comes to public opinion the specific detail is quickly lost. People are left with the impression that three senior leaders, who should have known better, behaved like dicks and presided over bad things. They appear to have behaved in a way that was massively at odds with the stated standards of their respective organisations, they have lost credibility and their jobs. Leaving the mess behind for the organisation to tidy up.

Whether the final criticisms were totally justified or not, it becomes irrelevant when public opinion is set. Minds are made up and all three organisations have suffered reputation damage with two key groups:

  1. The “undecideds”; and
  2. Talented employees (present and future).

Staunch National and Labour voters are unlikely to have changed their minds as a result of these two staffing debacles, neither are the committed Uber customers around the world who have already decided Uber is the way of the future. However, those voters who haven’t yet decided which way to vote may well have changed their minds over these issues. Commuters who weren’t yet decided on whether or not Uber was an ethical business have now received some confirmation that it may not be, and may search for another transport option.

The consumer and voter impact is only part of the problem. Finding quality people who want to work or volunteer for a political party with double standards or dubious management practices will be difficult. And why would any talented female (or any talented male with half a conscience), want to work at Uber?

In world that is this short of talent, finding and retaining good people is a vital part of any organisations strategy and this is directly influenced by the behaviour of the leaders.

Organisations that unceremoniously dump long time staff and seek to cover it up with a pay-out or try to exploit free immigrant labour or allow rampant bullying and harassment to become commonplace, will never win the war for talent and will suffer as a result.

No doubt these large institutions will recover, but not until they have spent considerable amounts of money and suffered a period of stagnation (or possible a backwards slide). Could you be certain your business would recover if it became caught up in similar scandals due to the actions of your leaders?

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AUTHOR
Picture of Jason Ennor, Co-founder and CEO at MyHR

Jason Ennor, Co-founder and CEO at MyHR

14 years of international experience in large organisations, with geo-dispersed workforces; Jason has a breadth of experience from fast paced day-to-day HR management to long term business strategy development and government consultation. Jason launched MyHR in 2013 with a vision to change the face of HR. MyHR is intuitive, easy-to-use, online HR software, coupled with a team of dedicated HR professionals, providing customised support to over 600 organisations who employ 10,000 people in NZ, Australia, UK and Singapore.