The All-In Cost of Bad Workplace Behavior at McDonald’s? It’s an Awfully Big Number.

The All-In Cost of Bad Workplace Behavior at McDonald's

The all-in cost of bad workplace behavior is tremendous. Unfortunately, people fundamentally misunderstand (and underestimate) the staggering economic impact of workplace misconduct and unethical business practices.

Psychology is a fascinating topic. And one of the more interesting psychological dynamics (in this author’s humble opinion) is humanity’s limited ability to grasp very large numbers. Blame evolution. Our not-so-distant ancestors really had no need to think in terms of millions, let alone billions. People just can’t visualize large numbers or understand their true meaning.

That fun fact has a not-so-fun consequence when it comes to workplace conduct & ethics problems. People – from the CEO straight on down to the lowest-level employee – have a tough time understanding the true cost of bad workplace behaviors. They understand the direct costs – fines, settlements, legal expenses, insurance premiums. But the big dollars are the indirect costs – lost productivity, plunging morale, higher employee turnover, difficulty recruiting. For public companies, the closest proxy of the all-in cost is the market capitalization and how it responds when an incident is announced.

On Sunday, McDonald’s announced that its CEO was fired due to an inappropriate (albeit consensual) relationship with a subordinate. How much did that relationship cost McDonald’s shareholders? Well, based upon the closing stock price on Monday, roughly $3.3 billion.

Given how difficult it is to visualize such a large sum, here’s some helpful perspective. Based on today’s average prices, that relationship cost shareholders the equivalent of 824,110,777 Big Macs. Or, if you prefer, 999,453,495 four-packs of Chicken McNuggets. Or, if you like to keep it simple, 1,320,563,052 plain old McDonald’s hamburgers. One point three billion burgers… Fair to say, that’s a lot of burgers.

So, let’s move the conversation about bad workplace behavior away from “It’s a cost of doing business…” or “It’s not really big dollars for us.”  Workplace misconduct and unethical business practices can destroy lives, and also destroy tremendous value for all of your owners and stakeholders. The Board of Directors and senior executives need to look at this issue through the correct lens. Unfortunately, far too many are not doing so. Until they reframe their perspective, these problems will not get better.

Always consider the all-in cost of bad workplace behavior – that’s what really matters. Those are the numbers that you, as a Board member or C-Suite executive, will be held accountable for. pelotonRPM’s Workplace Conduct & Ethics simulations can help prepare your senior team to mitigate the risks.