For many, ‘Checking the box’ to meet minimum legal requirements is no longer adequate.
In the wake of two deadly shootings at Walmart stores, the company has announced some dramatic moves regarding gun sales. It will no longer sell handguns and it will discontinue the sale of ammunition that can be used with handguns and military-style weapons. Walmart is also asking customers to no longer openly carry firearms at their stores in “open carry” states. No new laws mandated this move – just leaders doing what leaders are supposed to do. And leadership is infectious – Kroger, Walgreens, CVS, and Wegmans have quickly followed Walmart’s lead with regards to open carry.
Doug McMillon, Walmart’s CEO, said “We’ve…been listening to a lot of people inside and outside our company as we think about the role we can play in helping to make the country safer… It’s clear to us that the status quo is unacceptable.” Indeed, the status quo is unacceptable.
Walmart’s move illustrates what happens when senior leadership says “enough is enough” and takes action that goes above and beyond what is legally required. The letter of the law is the lowest common denominator when it comes to corporate behavior – it’s not what companies should aspire to.
Stop talking about building a great workplace culture. Start building one.
Speaking of going above and beyond, when will senior executives and board members be ready to look at harassment, bias, discrimination, workplace bullying, and retaliation through a similar lens? The human costs of these bad workplace behaviors are awful – depression, anxiety, substance abuse, suicide, just to name a few. The economic and societal impact is almost impossible to comprehend. And yet, too many executives continue to look for the lowest cost options in terms of training and other mitigation measures. “Check the box” is a cliché. What’s the bare minimum we need to do to comply with California and New York? Two hours? Not a minute and not a penny more. And yet, they wonder why their employee turnover is so high. They wonder why they can’t hire great people. They wonder why their Glassdoor reviews are terrible. They wonder why their EPLI premiums are skyrocketing. They are shocked when a senior executive gets embroiled in a harassment complaint and their market cap falls by $800 million in a day. They are surprised when shareholders file a lawsuit. Why on earth are they surprised? When it comes to workplace culture, you get what you pay for. If you do the minimum required, you will not fix these problems and you will pay a much bigger price down the road. You will not create a culture in which your people thrive.
The Business Roundtable made a splash on August 19th, 2019 when 181 CEOs broadened their interpretation of corporate responsibility. A corporation has a social purpose, an obligation to society as a whole, that matches its obligations to its shareholders.
It is time for corporate leaders to go above and beyond to confront bad workplace behaviors. Here are a few tangible examples:
- Invest in Fantastic Training. Companies spend billions every year on generic HR & Compliance training that checks a legal box but does nothing to build skills, change behavior or improve the company’s culture. People don’t watch the videos, they have their assistant do the training for them, or they pay more attention to their texts, emails, and Facebook than they do the exercise. We all know it’s true, and increasingly regulators, insurance companies, and plaintiff’s attorneys do as well. Invest in the best, and you’ll see a real return.
- Do not be Afraid to Make Big Moves: When it comes to bad workplace behavior, the worst offenders are often top performers who believe they are entitled to treat their colleagues poorly. Fire them. Fire them quickly. Fire them publicly. Take strong action that shows the entire organization you take these issues seriously. Changing culture for the better requires bold steps. People will rally to the cause if they see that everyone, even top performers, will be held completely accountable.
- Quarterly Culture Updates from CEO: Making some vague statements on page 34 of the annual report or proxy does not get the message across. Cultural change starts at the top and employees need to know that these issues are being prioritized in the corner office. Every single quarter, the CEO needs to hold a town hall, send a video message, or, at the very least, send a voicemail to each employee, commending what the company is doing well and highlighting where work still needs to be done. Public commitment from the CEO is essential.
As CEO, you have the power to make a difference. As a Board member, you have the power to make a difference. As a private equity owner, you have the power to make a difference. If, as you always say, your people are your most precious asset, shouldn’t you do everything in your power to prove it? Stop talking about building a great workplace culture and start doing it. When it comes to harassment, bias, discrimination, workplace bullying, and retaliation, do not settle for checking the legal box – do better. Go above and beyond.