Archive for December, 2012

Is Business Culpable for Sandy Hook?

Monday, December 17, 2012 by:David Zahn
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In the tremendous sadness, shock, outrage, and political positioning that is occurring around the Sandy Hook Elementary School massacre, there is the search for explanation as to how it could have happened, who is to blame, what we could have done to prevent it, etc. At some point in these tragedies, businesses will come under scrutiny and fingers will be pointed in their direction.

Manufacturers

One of the targets will surely be the manufacturers of weapons, firearms, guns, etc.  There will be focus on the responsibility manufacturers have in producing, creating, advertising, and marketing products that are in any way involved in deaths, sickness, and/or injury. On the one hand, there are those that will claim that the market regulates itself and that it is up to the consumer to make an informed decision (as long as the manufacturer does not withhold information that could or would influence the decision of the consumer).  So, in the instance of firearms, cigarettes, aclcohol, and other products – the belief is that the manufacturer’s responsibility begins and ends with full disclosure and compliance with applicable laws.  So, as long as the product performs as it should (not engineered poorly, does not include tainted ingredients, or other issues that are hidden from the consumer’s ability to reasonably assess or anticipate), the product has the right to be sold and purchased in a free market environment.

Of course, the opposing view is that manufacturers have a responsibility to not produce products that are known (or some would go further still, and say that the standard is to not produce products that MAY be known) to have potential deleterious effects.  Of course, there is a slippery slope argument that is opened when looking at the interaction between products and harmful outcomes.

  • Should Mayor Bloomberg and New York City’s ban on large carbonated soft drinks be enacted more universally because of societal obesity and diabetes issues?
  • Do manufacturers of powdered milk products have a responsibility if the products are misused and mixed with unsanitary water?  Should they be prohibited from selling the product in those markets without reliably clean water?
  • Should cars be manufactured to NOT exceed speeds beyond the speed limit because some drivers choose to drive too quickly?  Should cars only be able to be started if the driver can pass a breathalyzer?
  • And on and on.

Retailers

Of course, beyond just the manufacturers’ responsibility, the retailers that sell products will also be under the microscope for selling and distributing the products.  Does a retailer have responsibility for what a shopper does after the product is purchased?

  • Does the video game retailer have liability for a student’s poor grades due to excessive playing leading to a lack of studying time devoted to schoolwork?
  • Should a retailer be held responsible for selling ice cream if the shopper misues or abuses the product and gains weight to the point of illness or disease?
  • The examples can be applied to: Liquor Stores, DIY/hardware stores, Drug Stores, etc.

While the discussion will be heated as it pertains to firearms and will be rather emotional given the passions people feel for the issue now impacting our own neighbors in our community; there is a discussion that looms ahead that we will need to have and resolve.  What role does business have in these tragedies?  Is business morally neutral?  Should business lead the discussion or merely respond to it?

Does the shopper, manufacturer, or retailer have the responsibility for outcomes?

Lessons from the Bench

Wednesday, December 12, 2012 by:David Zahn
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When the mail brought a notice alerting me that I was chosen to show up to the courthouse and possibly participate in a jury, I did what many have done – tried to think of ways to get out of it. However, whether it was a sense of civic pride, obligation, commitment, or just that I really did not have a legimate excuse (after all; everyone believes that they are just too busy, too important at work, or above the need to serve), I showed up along with many other sleepy, somewhat surly, and impatient people to serve on juries.

Business owners can learn from how judges conduct courtroom business.

Jury Selection

The first lesson was during the process of jury selection when the process of “voire dire” occurs and potential jurors have the steps of jury selection explained, expectations are managed, other members of the process are introduced and the rules of engagement is covered.

Further, the delegation of who is selected to be on a jury is left to the attorneys, not the judge.  The process forces the “leader” or “CEO” of the court to give up some control so that the process can succeed without undue influence from a single person.  Even if that person is likely to have more experience, formal training, or familiarity with the process; a strength of the courts is that people of varying backgrounds and experiences come together to collaborate to reach a binding decision.

Trial Management

In the actual conducting of the trial, it is not the judge who examines or cross-examines the witnesses (or determines who shall be a witness and who shall not be called upon to testify), but the attorneys.  The process could go much more quickly if the judge were to select who to hear from, what testimony to review, and what power to give to any one particular fact.  However, the process only asks that the judge ensure that the other parties (attorneys, witnesses, and jurors) are held accountable to upholding the requirements of protocol.  The judge does not permit evidence or testimony to be entered if it is not appropriate, the judge makes sure that there is no unfair advantage offered to one side outside the law to be followed, and maintains decorum in the courtroom.  CEO’s could take note of how the judge des not exert undue influence on the other members of the process, but does not abdicate responsibility for ensuring that the result is reached through the appropriate means and after rigorous review of facts.

Trial Conclusion

The judge provides one last context for assessing how the jury should gauge guilt.  While there is much presented in the course of a court trial, at the conclusion the judge re-reads the charges and provides interpretations of the law so that the jury is confident in their ability to reach a decision successfully.  Then, it is up to the jury to decide based on their understanding of the law, the testimony, perceptions of the truthfulness, reasonableness of witnesses, etc.  In this way, the judge ensures that the objectives of the trial are maintained and that jurors have the resources needed to make an informed decision.

Similarly, CEOs can replicate the process used by being diligent about achieving objectives, without specifying what the outcome must be ahead of time.  The jury is empowered to make the decision, and the judge’s role is to help the jury achieve the result or decision.

While business lessons are not commonly pursued inside courts and jury trials – the insights are abundant and are evident if one looks for them.

Avoiding Bad Apple Employees

Thursday, December 6, 2012 by:David Zahn
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Businesses are fond of claiming that employees are their best assets or biggest competitive advantage over other companies in the market. Yet, when it comes to properly practicing “due diligence” with new hires, the words and the music don’t always match. 

It is common for many small and growing businesses to begin their expansion by hiring part-timers, interns, family, or friends.  The perspective is that the “risk” is quite limited as the person is either known to the owner prior to hiring, or will be a relatively insignificant part of the business – and therefore is not “worth” checking up on in a cost/benefit calculation done by the owner in his or her head.  Unfortunately, all it takes is a single negligent hiring decision to torpedo good will with customers, lead to prospective issues due to damages, tie the business up in legal wrangling, etc.

Easier to do it Right the First Time

While it is easy to try to convince ourselves that “nothing bad will happen this time” or that it is not worth the energy, time, expense, etc. to do it “by the book” for any given employee, the reality is that continually having to train, retrain, source, select, and hire new employees and replacement employees for initially poorly selected employees can run into the tens of thousands of dollars.  In fact, according to a William M. Mercer, Inc. study quoted in “Don’t Hire a Fugitive” published by www.business.com, it may run upward of $10,000 for each employee!  Therefore, taking the time to conduct the employee “vetting” process properly will save the company in the long run.

One bad apple employee can lead to significant issues for employers.

The Options

The options are that the employer can do their own background searches or investigations without any third-party intervention.  This is usually done in companies that do very little hiring and so can afford the time to devote to any one individual hiring.  Relying on things that are readily verifiable either online or through a couple of quick phone calls, this is an approach that numerous companies employ.
Companies can also choose to outsource this to professionals.  Either Private Investigators or companies that provide employee screening capabilities (through online or other employee background check methods) can provide a more complete picture of the employee beyond what is documented on a resume or in an interview. 
If a third-party company is used, it is wise to ensure that they are accredited through the National Association of Professional Background Screeners (NAPBS) www.napbs.org, have the capabilities to review in-state and out-of-state prospective employees, and are familiar with the hiring company’s industry and marketplace.  Just like there needs to be background checks on employees, the same vigilance should be used in choosing the background check co0mpany.
Remaining on the right side of the law is critical in conducting these background checks.  The Fair Credit Reporting Act (FCRA) governs what is permissible and what is not when conducting background checks on prospective employees.  No background check is permitted to include:
  • Bankruptcies over 10 years in the past
  • Arrest records after 7 years
  • Collections records beyond 7 years
  • And of very recent vintage – personal passwords to social network sites like Facebook, LinkedIn, Twitter, etc.

Not every job needs to be “vetted” to the same level or include the same rigor.  A pizza delivery driver may be subject to driving record offenses, DUIs, tickets, etc. – that may be less critical for someone who is a dishwasher in the restaurant.  Similarly, a bank teller handling cash may be subject to background checks that are more focused on criminal activity involving money.

While it may seem like overkill to the employer to go through this rigorous review, it can save the company thousands of dollars in court case costs, reputation, and time and effort.  Removing the bad apples from the bunch before they can spoil the others is always a wise decision.