Planning to Reopen? Bring Staff into the Discussion

To re-open now or to re-open later, that is the question.

America is starting to partially re-open for business.  A large majority of Americans still have concerns about opening the economy and ending stay-at-home restrictions meant to slow the spread of the virus, according to a recent Washington Post/University of Maryland national poll.  The Covid-19 epidemic has posed difficult questions, if not a dilemma, for employers about when it would be safe to bring back furloughed and teleworking employees to the workplace.

What can employers do to inspire confidence in the minds of their workers that it will be safe to return to the workplace?  The best thing to do is to have a reopening plan with concrete measures for protecting the safety of workers and customers, vendors and other stakeholders.  The second is to communicate directly with workers about the plan and get their feedback and suggestions.

In these circumstances, all organizations should expect their staff to have reservations about coming back to the workplace.  After all, the virus can strike anyone and anywhere.  These concerns need to be taken into consideration when developing reopening plans and a strategy for communicating this to workers.

The employers I have spoken to are grappling with these issues as they think through the timing of opening and how to do it so that workers and customers will feel safe.  All are trying to balance the benefits and the risks.  Some say they will open when government authorities lift restrictions.  Others say they will open only if they feel it would be safe for employees and customers.  All agree that engaging staff in the planning process to reopen will be crucial to reducing workplace safety concerns.  Here are few suggestions that could help:

Develop an Employee-centered Reopening Plan – At the start of the Covid-19 pandemic, businesses, nonprofits, and other organizations had to make plans for handling employees and serving customers remotely or shutting down completely if they were considered to be a non-essential business or service.  Reopening will also require a plan.  Employees will be eager to return to the workplace, but also concerned about their safety.  They will be looking for guidance from their employer’s leadership.

Get Feedback – Employees are gold mines for information about an organization’s workplace culture and what is working with customers and what is not.  Find out about what they think about a re-opening plan and solicit their suggestions.  There’s lots of ways to do this.  Many organizations use employee surveys, virtual townhalls and perhaps the most impactful, individual conversations.  The important thing is to be proactive in reaching out to workers.

Communicate, Communicate and Communicate – In a crisis, people can never get enough information.  Consumers are using television, radio and Internet use for news and information about the pandemic at record all-time highs.  Employees will have the same need for information about reopening plans and updates after the doors open.  There is little doubt that we will have a bumpy road ahead of us.  Covid-19 infection surges are predicted.  The already battered economy could lose more ground and lengthen the recovery.  Anxious employees will be better able to deal with upsets and uncertainty if their employer regularly engages them in dialogues about how the organization is doing.

Lead by Example – Organizational leaders will play key roles in setting safety standards in reopened workplaces by being role models.  For example, if wearing masks in the workplace is mandatory, leadership from the top on down should be wearing them too.  This communicates that no one is exempt from this workspace safety practice, not even executives.  Walk the talk!

 Employee Safety = Customer and Vendor Safety – An organization’s reopening plan that underscores the safety of its employees as a priority will complement safety measures for its customers, vendors and other important stakeholders.  Employees practicing safe behaviors will give stakeholders more confidence that they can safely do business with the organization.

I am encouraged by the number of employers I have encountered who are developing reopening plans and understand the importance of engaging their employees in a conversation about workplace safety.  It’s the right first step towards creating a safe workplace for staff to be productive and engaged during these challenging and uncertain times.

 

Healthy Virtual Workplace Cultures Practice Civility

How important is civility to the culture of virtual workplaces that have now become a necessity in the battle against the Covid-19 pandemic?

The new normal for all of us is a highly stressful world.  We’re now either full-time teleworkers or running our businesses from home.  On top of that, we worry about our health and of those we love.  We oversee our children’s at-home education and check daily on the health of elderly parents and other loved ones.  That doesn’t even include household responsibilities, and worries about the pandemic’s toll on the economy.  In this hyper stressful environment, even the nicest people can lash out in frustration.

During these extraordinarily anxious times, it’s imperative that all of us double down on being civil in our interactions with our work colleagues (Our families, too).  Being civil can play a big role in managing stress, maintaining a healthy corporate culture and being productive while this crisis continues to upend our lives.  Here’s a few suggestions:

Be forgiving. We’re all anxious, stressed and can be unintentionally rude.  Don’t take acts of rudeness from normally well-behaved people personally.  It’s almost never about you.

Adhere to your company’s code of behavior. Practice civil behaviors as teleworkers in the same way that you would if you were sitting in your company office.

Lead by example. Executive leadership must act as role models for virtual workplaces.  But non-executive staff can also be role models.  When one person sets a pattern, others will follow.

Acknowledge others presence. Make a practice of saying hello to other colleagues during conference calls rather than waiting for the call organizer to start the conversation.  Welcome and introduce new participants.  This helps to set a friendly and collegial tone.

Be a good listener. Show that you are paying attention during conference calls, both video and non-video, by asking questions for additional information and to clarify what had been said.  Use good manners.  Don’t interrupt speakers.  Stop multi-tasking and focus on what is being said.  Bad behaviors make calls last longer than necessary and it communicates that rudeness is okay.

Watch your language. Your choice of language used in emails and texts matter.  If your words strike an unintended and overly critical tone, you may inadvertently create unnecessary anxiety and an inaccurate impression of your intentions.  Phone or start a video chat with a colleague to discuss complex or difficult issues and then use email/texting to follow up on details.

Help others to be civil. Colleagues that are uncharacteristically rude may not even be aware of it.  Find a way to discuss this with them privately.  They will probably be mortified and thank you for telling them.

Call out bad behavior. Bring to the attention of your organization’s leadership instances of intentional and sustained acts of bullying, sexual harassment, racism and other uncivil behaviors.  Bad actors should be held accountable.

Stay safe and be kind!

 

Board Directors Should Listen to Smokey the Bear’s Advice

Over the past few weeks, I have watched two examples of how corporate boards handle scandals.  The first should raise red flags for any investor.

I call it the slow-burning fuse.  There is something unethical or illegal happening in a company that is well-known to insiders and outside stakeholders but left unsaid and often actively covered up because it involves C suite executives.  The top of mind example is Harvey Weinstein.  The co-chairman and co-founder of the Weinstein Company, Weinstein is facing mounting allegations by women of sexual harassment and assaults over several years.  Reporting from major news outlets revealed that Weinstein had a well-known reputation in and out of the entertainment industry for bad behavior towards women.

His board made the correct decision to fire him.  The abuse of female, or male, employees in the workplace by corporate executives is unacceptable.  Full Stop.  While the board’s actions were commendable, they are far from blameless.  They were silent witnesses and enablers of a toxic culture that had festered into a full-blown crisis that will surely result in the company’s loss of reputation, talent and revenues.

Why do some boards act decisively in the face of a scandal in the making and others seem to look the other way?  Corporate governance expert Len Sherman writes in Forbes “The short answer is that CEOs often suffer cultural myopia and outside directors frequently fail to provide adequate oversight” (https://www.forbes.com/sites/lensherman/2017/03/13/why-boards-must-step-up-to-deter-corporate-scandals/#1a97f9b61b79).

Sherman doesn’t lay blame on impulsive behaviors by CEOs and management, but to a gradual falling away by corporate leadership from a company’s visions statement, and because outside board directors are not getting reality checks from outside sources to compare with the information they receive from the company.

In my experience in working with board members at large and small publicly and privately held companies, the directors who had a positive influence on the company were the ones who were actively engaged with senior management and often challenged them on strategy.  They were curious and sought out opinions from staff and consultants working with the company and would speak with customers.  They made sure that they knew the marketplace, the competition and the company from the inside and out.  In sum, they would not allow themselves to be siloed into a one-track flow of information.

The activist outside board director is now getting a lot of attention these days.  High-profile hedge fund investors like Carl Icahn, Nelson Peltz and Bill Ackman buy a lot of shares in companies they believe are underperforming and attempt to leverage their shareholder positions in order to force changes in executive leadership and strategy.  Critics charge that many of the reforms that get proposed, like cutting staff and R&D costs, are only short-term fixes that boost short-term shareholder earning while sacrificing quality strategies to build sustainable growth.

The voices for shifting the metrics of corporate success away from short-term, quarterly results to longer-term measures of growth and sustainability are growing among well-known influencers in business, politics and academia.  One of the most eloquent is Ira Millstein.  A renowned expert on corporate governance, Millstein argues that many past corporate meltdowns could have been avoided if board directors had challenged CEOs and management when they introduced strategies for short-term shareholder gains, which they passively gave their approval to while growth oriented strategies were put aside, or questioned bad behaviors by the CEO, which they turned a blind eye to.  The solution, according to Millstein, is for companies to embrace the need for a board that is actively engaged in the running of the company and to recruit board directors that fit this mold.

Millstein, a lawyer and advisor to corporations, non-profits and government over a 60-year career, is the author of the book, The Activist Director:  Lessons from the Boardroom and the Future of the Corporation, 2015, Colombia Business School Publishing.  In it, he examines the problems and offer solutions, such as how to recruit and vet potential directors.  I have and will continue to recommend Millstein’s book to executives and board members I know in business and the non-profit sector.

The second example of how corporate boards can handle scandals is what I call the Smokey the Bear approach.  Smokey is the well-known bear who is beloved by generations of children and adults when he starred in decades of fire prevention media ads wearing a forest ranger’s campaign hat and communicating a simple message: “Only you can prevent forest fires”.  This is the kind of thinking that corporate boards need in order to take immediate and preventative steps to stop bad behaviors by executives before it ignites into a blazing scandal.

Here’s how it works in practice.  In September, the board of KB Homes, a national home building company, took away 25% of CEO Jeffrey Meltzer’s 2017 bonus after his sexist and homophobic rant to his neighbor, the comedian Kathy Griffin and her boyfriend, was caught on a security camera and posted on social media.  As public outrage grew, the mainstream media also picked up on the story.  The board didn’t dither but swiftly stepped in to address the problem.  The result:  Meltzer issued a public apology to Griffin and her boyfriend.  In addition to cutting Meltzer’s 2017 bonus, the board also stated publicly that he would be fired if something like this happened again (https://www.nytimes.com/2017/09/21/business/kathy-griffin-kb-home-ceo.html?_r=0).  By the way, Meltzer is KB’s board chairman.

I wonder if the boards at VW and Wells Fargo, both in the midst of major scandals, had taken the Smokey the Bear approach to their oversight responsibilities would they be in the mess they are in today that is costing each company billions of dollars in fines, lost shareholder value and significant damage to their brand and reputations?

 

SIX STEPS TO PROTECT YOUR IP AND SLEEP BETTER AT NIGHT

One of a startup’s most important assets is its human talent.  Without it, there are no idea generators, leaders and employees to run the company.  An equally important asset is its intellectual property, which drives development of new technologies, products and services, and essential for attracting investors.  Both constitute the lifeblood of a young company.

In the same way that retaining key staff is vital to a company’s success, protecting its intellectual property is another necessity.  This takes time and money, which young companies are always short of.

But when I hear an owner give the lack of time or money excuse, I pose this question.  Would you wait until you are robbed of your most valuable possessions before putting locks on the doors of your house?  Obviously, most people would not.  Taking steps to protect your intellectual property is in the same category.

There are six things that you can do to reduce your risk now and give you some peace of mind in the long-term:

Have employees and contractors sign non-disclosure agreements that also acknowledge that all IP produced by the company belongs to the company.  Startups are populated by bright, creative and motivated people.  In the all-hands-on-deck atmosphere of young companies, staff and consultants often contribute to the development of products and by extension its intellectual property.  To avoid misunderstandings about the ownership of any proprietary materials, get signed agreements with all current employees and new hires when they are on-boarded.  The same applies to all contractors.  Use this opportunity as a teaching moment to educate staff and contractors on intellectual property, its value and the importance of confidentiality.

Review your company’s software code at least once a year to prevent against incorporation of unauthorized third-party codes.  Online thieves employ sophisticated cyber hacking tools to compromise your IT defenses to introduce malware to steal proprietary information.  They also try to fool staff into opening emails with malware embedded in attachments.  But, the introduction of third-party codes can also happen unintentionally when in-house staff make revisions to the company’s software.  Check your IT software system regularly for unauthorized code.  Hold regular trainings to update staff on cyber security practices.

Protect trade secrets.  As the name suggests, this is confidential information, like R&D and manufacturing methods, product formulas, and marketing information, and give company’s proprietary competitive advantages in the marketplace.  Along with patents, trade secrets are among the most valuable non-tangible assets owned by your company.  Public disclosure or theft of this valuable “know-how” can lead to attempts to re-engineer a company’s products and production processes, and cause downturns in revenues, stock value and market position.  Trade secrets give their owners proprietary competitive advantages, but, in some cases, they can be monetized by licensing agreements or selling them.  The best defense against an accidental exposure or deliberate theft of a trade secret is prevention.  As mentioned earlier, have employees and consultants sign non-disclosure agreements.  Also, make it a priority to educate employees, and consultants on what constitutes a trade secret, its value to the company and how to protect them.  A good source of information on trade secrets is on the website of the U.S. Patent and Trademark Office (USPTO) (https://www.uspto.gov/patents-getting-started/international-protection/trade-secret-policy).

Develop a patent strategy.  You’ve worked for years developing a unique and novel invention that could change industries, save money and lives, and make money.  But without patent protection, you have no legal standing to stop others from using your invention and getting credit for your hard work.  Getting a patent will require a commitment of time and money.  Be sure to do a lot of research on the patent application process and sources of expert advice and what all this will cost.  A good place to start is again the website of the USPTO (https://www.uspto.gov/patent), which provides detailed descriptions of each step in the application process and other useful resources.  Can you DIY your patent application and save money by not hiring expert advice?  Sure, but the patent application process is complex, and applicants without technical and legal expertise risk making errors that could undermine the strength of their patent application and even getting it approved.  Hiring experts to help you through the process raises the odds that you will be successful.  There are several online legal services that offer basic services like patent searches and help with filing a patent application to the USPTO.  Alternatively, you can hire an experienced patent lawyer to be an advisor and to manage the application process from start to finish.  Whichever approach you choose, it is advisable to have knowledgeable legal and technical advice.

Trademark Protection.  Customers must be able to distinguish your products and services from your competitors if you want sales.  You may already be using your company logo or name as a trademark.  You are now in the process of building customer awareness of your products and company brand.  That’s good!  However, there can be a legal problem if others have already been using the same logo or name, or something similar.  If that happens, you could receive a “cease and desist letter” from a lawyer, notifying you that you are infringing someone else’s trademark and to take immediate steps to correct the problem or be taken to court.  Don’t invest a lot of money in logos, marketing materials and websites before you know if you have a potential problem with other trademark owners.  Get competent legal advice first to help you to develop a strategy that can meet the needs of your business.  You can get a lot of helpful information on trademarks at the USPTO website (https://www.uspto.gov/trademark).

Copyright Protection.  If you thought that books, music and films were the only kinds of original content that were eligible for copyright protection, think again.  Your website alone could contain several examples of original content eligible for copyright protection, such as white papers, photos, artwork, videos, films, sound recordings and computer software that were all produced by your company.  If any of those items were produced by someone else, then you would need to have the author’s permission to use them, like a common licensing agreement, to avoid infringing upon the author’s rights and instigating possible legal penalties.  Copyright law is complex and getting expert advice is recommended.  A good first step would be to consult with the U.S. Copyright Office (https://www.copyright.gov/) to learn what materials are eligible for copyright protection and how to register them.

Young companies have lots of valuable intellectual property that should be protected.  Don’t’ wait until these assets have been stolen to take steps to protect them.  Conduct an audit to identify your companies IP assets and develop a strategy for protecting these invaluable assets. It will be time well spent and give you some peace of mind.

Tom is a business advisor, coach and trainer, and business owner.  A senior strategic advisor with 25+ years serving multiple industry sectors, non-profits and governments. He is passionate about helping small and medium size enterprises and startups build sustainable companies, become effective communicators and grow revenues in the domestic and global marketplaces.

 

 

LEADERS: FIND PITFALLS BEFORE THEY FIND YOU

Does it always take an extraordinary life changing event for leaders to make fundamental changes that result in better lives for them, their families, their employees and the community?

The narrative of transformation and finding new purpose is as old as time. The biblical accounts of Moses, St. Paul and stories of the path to enlightenment for the Buddha and the Prophet Muhammad were examples of unexpected callings to follow radically different courses in life that have had profound impacts on the world.

For most of us, the moments when time and circumstances presents life altering choices of this magnitude are rare and dictated by outside events which we don’t control. More often, they result from failure and loss.

Learning from life’s misfortunes

The death of a child or a spouse are terrible experiences. From this anguish often comes insights that can help you to recover from tragic loss and to find new purpose. Facebook’s Chief Operating Officer Sheryl Sandberg recently released a book with psychologist Adam Grant (Option B) about her grieving process after her husband’s sudden death while on a family holiday and what she learned. Sandberg doubted that she could ever recover. But she did and found untapped sources of strength, resilience and empathy for others. She credits this experience with becoming a better parent, friend and business leader.

Would you accept these gifts if the price was not so steep? Of course! Unfortunately, the people who would benefit most are often unaware that they are on a path to failure and ignore others trying to alert them.

Take for example Travis Kalanick, Uber’s hard-charging Founder and CEO. A social media post showing him and an Uber driver having an epithet filled argument over fees raised has questions about his suitability to lead the startup valued at $70 billion. Afterwards, he admitted publicly that his immature behavior was hurting Uber and promised to immediately recruit a COO to provide adult leadership to steer the ride hailing giant back on track.

Whether this is the epiphany that transforms Kalanick’s perspective on life and leadership is yet to be seen. Hopefully, it will because his company is in crisis. Top senior managers have left. Female staffers have gone public with accounts of sexual harassment. Will Kalanick takes steps to lead Uber out of the crisis? Only time will tell.

Start looking for pitfalls when all is well

In reality, harsh experiences like disgrace and rejection may be the best motivators for transformative change. Pitfalls do happen – even to the best of leaders. Each of us has blind spots. A crisis can emerge from what we don’t know, coincidence and just plain bad luck. But we can take steps to improve our odds by finding our blind spots. Here’s a list of things you can do:

Take stock of your key business relationships – We know relationships are critical to success. Ask yourself tough questions about the quality of your key relationships. Do you get along and work well with other senior managers? Board directors? Staff? Investors? Major customers? Are you on the same page on strategy and other priorities? Do you surround yourself, professionally and personally, by people like you? Are you receptive to ‘honest’ critique and feedback? Are you truly open to new ideas and concepts? How globally fluent are you? When was the last time you took an analytical look at the cause/effect of your decision-making? This list can go on and demands an objective look inside – both in your leadership and management style. Even when everything seems to be going well, there can be problems building just below the surface and hidden by a leader’s blind spots. Especially in today’s world, problems and challenges are not isolated but are blended problem-sets, which often transform with each decision.

Don’t be the last one to know – You need to get honest feedback from your key business relationships. Asking a question like “How am I doing as a CEO?” of board director would likely get an honest response. The same question directed at an employee would likely get a perfunctory “Oh, Just fine” answer. Don’t forget the inherent difference in power and influence in the boss/employee relationship. Instead, solicit advice on one of your business challenges. For example, “I am having trouble figuring out better ways to improve customer relations. What could we do better?” If they feel safe and that this is an honest effort to involve them in problem solving, they will likely be more willing to answer other questions about the state of affairs at the company. Above all, leave the comfort zone of your office and go personally to the shop floor/ customer if you really want to know.

Prioritize problems and develop a plan to address them – Congratulate yourself for being courageous. It’s not easy to listen to criticisms, especially about your own performance. But getting insights on possible deal breaking problems is worth every bruise to your ego. If several important issues have surfaced, you need to prioritize what gets done first. For example, potential resignations of key staff because of differences in strategic direction or an ailing corporate culture. Here again, get help from trusted advisors and key staff on what issues to prioritize and their assistance in developing a plan of action.

Use a team approach to address problems – The buck stops with the Founder/CEO to address major problems. But the CEO will need the support and involvement of other managers, employees and board members that have credibility with the company’s key stakeholders, including employees, their families, board members, and major customers. A lot of pent up frustration and anger could surface, especially if a Founder/CEO is at the source of a problem. The direct participation of trusted stakeholders in the discussion on company problems and the process of finding solutions will have a better chance of success.

The lessons here are five-fold. 1) Never take anything for granted. The appearance of calm waters on the surface gives no indication of building turbulences below. 2) Build trust. Honest feedback comes from people who trust you, not fear you because you are the boss. 3) Be humble. This will be hard for business leaders who feel they must always have answers to everything. 4) Leave your ego at the door. Asking for advice and listening can produce good ideas and good will. Don’t wait for the call to make change. 5) Lead the effort.

FAKE NEWS GETS A HOLLYWOOD FILM ROLE: WILL IT BECOME A NATIONAL STAR?

Are you upset by fake news that deceives consumers and occasionally puts people at physical risk?  If only the bad actors were not online phantoms but established companies, entities with a well-known public face, that you could launch a product boycott against and hurt them in their pocketbooks.  Now, you have the chance.

20th Century Fox, the maker of A Cure for Wellness, a horror/mystery film, launched phony news media websites and distributed outlandish fake news stories, involving President Trump, Russian President Putin, and Lady Gaga, as part of its marketing strategy to promote the film.

The ruse collapsed once online consumers and fact-checking organizations figured out that the so-called media outlets were fake.  A firestorm of social media and news media criticism began a week before the film was scheduled to be released.  Neither 20th Century Fox or New Regency, the production company involved in the film, publicly apologized immediately after the truth came out and issued a defense of their actions to news media a few days before the release of the film:

“A Cure for Wellness’ is a movie about a ‘fake’’ cure that makes people sicker.  As part of this campaign, a ‘fake’ wellness site “healthandwellness.com was created and we partnered with a fake news creator to publish fake news.  As our movie’s protagonist says, there is a sickness inside us.  And only we know what ails, can we hope to find a cure.”  (BuzzFeedNews, February 13, 2017)

20th Century Fox must have had second thoughts and issued a public apology the day before the film opened, saying:  “In raising awareness for our films, we do our best to push the boundaries of traditional marketing in order to creatively express our message to consumers.  In this case, we got it wrong.

The digital campaign was inappropriate on every level, given the trust we work to build every day with our consumers.  We have reviewed our internal approval process and made appropriate changes to ensure that every part of a campaign is elevated to and vetted by management in order to avoid this type of mistake in the future.  We sincerely apologize.” (Washington Post, February 17, 2017)

Willful Deception or Clueless Behavior?

20th Century Fox’s ethical lapses were bad, but the violation of trust with consumers was worse.  Did they knowingly attempt to deceive consumers to drive online traffic to promos for the film?  Did they plan to leave the fake news media sites in place and maintain the deception and apologize only if they got caught?  Or, was it just plain clueless behavior?

The film industry is a high-risk and competitive business.  But so are a lot of other industries.  Creative and edgy marketing strategies are often used to get the attention of consumers.  Topical issues of the day are frequently used to create unique and striking approaches to marketing products and services.

Fake news has been seated center stage in the public’s consciousness.  Finding out what role fake news played in in the 2016 U.S. Presidential election, the Russian hacking of the Democratic National Committee and the Clinton campaign has been a top-of-mind interest of the mainstream media, the U.S. Congress and the general public.  These issues have become a part of America’s national dialogue.  It’s hard to imagine why 20th Century Fox would think that associating A Cure for Wellness with deceptions aimed at consumers would generate anything other than a thumbs down.

A Lesson Learned?  Or, A Step On A Slippery Slope?

We’ll probably never know the whole truth behind 20th Century Fox’s decision to partner with a professional fake news purveyor to promote A Cure for Wellness.  But the optics are not good for 20th Century Fox and nor are the implications for society.

While a grassroots boycott was not mounted against 20th Century Fox, a not so small measure of consumer displeasure with A Cure for Wellness is hitting the filmmaker where it hurts the most.  According to BoxOfficeMojo.com, the opening weekend (February 17-19) ticket sales for the $40 million production were $5 million and dropped the next weekend (February 24-26) to $1.4 million.  Foreign sales of $9 million have helped the bottom line, but the falling trajectory of ticket sales this early suggests that 20th Century Fox and its investors will have unhappy memories of this film.  If that’s not enough pain, 20th Century Fox may also have legal problems.  The people highlighted in the fake news campaigns could file suit against Fox for using their likenesses without their permission on the phony websites.

Will the 20th Century Fox episode be a lesson to others that using fake news is a bad idea?  Let’s  hope so.  As I wrote in another blog post recently, an ethical lapse of this kind could either help us as a society to reject fake news or inch us closer to viewing it as part of a new reality where established facts are given equal weight with alternative facts.  Only time will tell.

Photo credit:  &copy; Gigraa | Dreamstime.com – <a href=”https://www.dreamstime.com/royalty-free-stock-image-press-conference-person-image25975866#res16200639″>Press conference with person</a>

Fake New Hurts: Ways To Ease The Pain

What did the brutal and divisive 2016 U.S. Presidential campaign, the Russian hacking of the Democratic Party and the erosion of public trust in the media have in common?  In all, fake news was a factor.

Fake news has emerged as a hot topic in the national dialogue in the post-2016 U.S. Presidential race.  And it continues to have an undeniable impact on American politics, business and society, and is shaping public opinion at a time when some national thought leaders openly support the validity of “alternative facts”.

The American public has taken notice of fake news and are not happy about it.  Nearly two-thirds of Americans think fake news is creating confusion about the country’s “basic facts of current issues and events”, according to a Pew Research national opinion poll conducted in December 2016.  And there are worrying signs that the deliberate use of fake news to influence public opinion is not only here to stay but growing.

An annoyance or a growing threat? 

A skeptic might say, what’s the big deal?  The use of phony facts to gain political or business advantage is as old as recorded time.  But today’s digital technology has changed all that.  The algorithms used by social media platforms can circulate a post to a few hundred people that can morph into tens of thousands of people and larger in a short time as it is shared with their online networks.  The purveyors of fake news have doubled down on using technology for producing and distributing phony information and have become a cottage industry.  What motivates those that enter the business of phony news?  Politics?  Perhaps, but profit appear to be the primary motivation.  “The money, not the politics, was the point,” said one budding entrepreneur interviewed by the Washington Post.  Thousands of dollars can be generated from fake ads on websites using the self-service ad technology available on Google, Facebook and other online platforms.

Can you personally or your business be affected by fake news.  Yes, definitely.  The humorous satire published by The Onion that is sometimes mistaken for real news is harmless.  But more of the fake news in circulation has a malevolent purpose.  It can damage your reputation, your business and result in threats to your safety and that of your family.

Take, for example, the near tragedy at a popular Washington, DC pizzeria.  An armed man traveled from North Carolina to DC to investigate a “news story” he found on social media claiming that Hillary Clinton and her campaign chairman John Podesta were in league with a popular Washington, DC pizzeria in a child-trafficking ring.  He entered the pizzeria carrying a gun and demanded answers from terrified staff and patrons.  He fired shots into the walls before surrendering to the police.  Fortunately, no one was harmed.

But the impact of the fake pizzeria news story was not over with the arrest of the gunman.  The owner of the pizzeria and his employees received death threats.  Online posts repeating the phony news story didn’t stop and urged people to boycott the pizzeria.  Finally, as a safety precaution, the owner closed the pizzeria temporarily out of fear of possible harm to himself and his staff.

In 2016, stirring up public concern and irrational panic was another blowback from fake news. This was the case with Kaci Hickok, a Doctors Without Borders nurse, who voluntarily served in West Africa to treat patients stricken by Ebola.  She returned to the United States after having tested negative for the disease and not displaying any symptoms.  In the meantime, fake news stories were circulating about Ebola outbreaks in the U.S. and fanning public fears.  Upon arrival in the U.S., Hickok was immediately placed in quarantine for 80-hours at the order of New Jersey Governor Chris Christie.  Media reports on her quarantine and comments by Governor Christie that she was carrying a yet to be diagnosed disease were broadly shared online and contributed to a growing state of public panic.

Her problems didn’t end with her release from quarantine.  She soon learned that she had been evicted from the apartment she shared with her boyfriend, a nursing student, in Maine.  He then became a victim of the unintended consequences from growing media interest in Hickok.  He was told by his nursing school to stop attending classes if he continued to share an apartment with Hickok.  In the meantime, the Governor of Maine, Paul LePage, announced that he planned to put Hickok back in quarantine.  The quarantine order was challenged in court.  Left in limbo, Hickok and her boyfriend took a publicized bike ride to protest against the quarantine order.  Not surprisingly, the police reported death threats were made against Hickok.  Eventually, Hickok and her boyfriend left Maine.

Be vigilant, have a plan and be proactive

What can you do to protect yourself, your family and your business if you are the target of fake news or suffer collateral damage?  Sadly, there’s no guaranteed way to stop fake news from appearing online.  That’s a challenge for Facebook and other social media platforms to solve.  But here’s what you can do:

Find other credible sources for “too good to be true” news stories before sharing them on social media platforms.  We contribute to the dissemination of fake news by not verifying its veracity.  Check multiple sources of credible traditional and new media to confirm its accuracy.  Go to fact checking sites like Snopes.  Fake news is packaged to appear like it is from a credible source, making it hard to identify.  The best way to avoid aiding and abetting the purveyors of fake news is to use your judgement before hitting the send button.  Be alert to sensational breaking news story about an alleged scandal or criminal activity involving well-known people and companies.  When you find one, red flags should be flying on your internal credibility radar.

If you are a business owner, treat your customers well.  Why should that matter?  Well, it did for the Washington, DC pizzeria that came under attack by a deluded gunman and waves of fake news on its alleged involvement in a child trafficking ring.  Social media lit up with support from local customers and sympathizers after the attack.  Loyal customers came in droves to buy pizzas as a gesture of support.  Local and national news media covered this story and editorialized about the dangers of fake news and the damage it can do to individuals and businesses.  That kind of a response comes from customer goodwill built up over time.

Proactively monitor the Internet and have a response plan.  Your best defense against fake news is to be vigilant.  Fake news is different from cyber hacking.  Cyber intrusions are quietly executed while fake news is prominently displayed on the Internet.  Both cyber hacks and fake news pose external threats, but are handled somewhat differently.  Cyber security specialists will monitor a company’s IT and quietly fend off cyberattacks but fake news attacks require a more visible response.  Major companies employ large numbers of staffers and outside consulting companies whose primary job is to monitor the Internet for ads, news stories and social media postings for references to the company and its products or services.  They must also deal with the growing Internet presence of fake news along with fake listings, websites, ads, and reviews of businesses, that profit from scamming their customers out of money and that defame their company’s reputation.  SMEs may not have those kind of resources, but that should not be deterrent to having a smaller but effective monitoring capability.

What should you do when a so-called news story appears with information that could affect a company’s stock price or the quality of its product or services?  The company needs to take immediate steps to communicate accurate information via new and traditional media and on social media platforms to interrupt the momentum of the phony information on the Internet and to reduce concerns of investors, customers and other stakeholders.  Your stakeholders are vulnerable to being duped by fake news because it looks like it is legitimate.  You need to use your internal knowledge of the company to identify real from fake news and do everything possible to shield stakeholders and the company from possible negative consequences.

Going Forward

The incredible benefits of the Digital Age we enjoy comes with a perverse underbelly.  Fake news has now joined cyber hacking as a threat to you, your family, your business as well as our political system.  Vigilance and planning are important to having a coordinated response to fake news that can reduce its negative consequences.  But a question yet to be answered is whether the public will reject the use of fake news or accept it as part of the new normal in our changing political and social environment?  Let’s hope for the former.  The latter would signal an erosion of America’s moral compass that could undermine the fundamental values that keeps our economy, law and politics and our lives real.

Photo credit:  David Watmough | Dreamstime.com – <a href=”https://www.dreamstime.com/stock-photo-truth-lies-text-inscribed-uppercase-letters-small-white-cubes-black-red-colors-respectively-hand-magnifier-image51147350#res16200639″>Truth and lies</a>

A ray of hope in a time of political gridlock

The day that the 114th U.S. Congress departed for their summer break, they left behind pending bills to fight the Zika virus, restrict firearms to anyone on the terrorist watch list and a toxic legislative atmosphere worse than one year ago, if that could even be possible.

But on that same day a Senate Committee hearing took place that went against the raw partisanship displayed during the legislative session that could have positive implications for the long-term economic health of the American economy.

The Senate Small Business and Entrepreneurship Committee held a hearing to “examine current trends and strategies in the venture capital ecosystem…options that startup companies have to raise capital throughout different stages of business development” and steps that could be taken by government and the business community to make more investment capital available to startup businesses. Witnesses from leading venture capital firms that finance digital giants like Uber, Airbnb and biotech startups were invited to testify.

Decline in Business Startups in the US.  The background for this discussion is the US economy’s slow and uneven growth since the Great Recession of 2008. The number of business startups declined 2 % in the United States, according to research released this week by Babson College’s Global Entrepreneurship Monitor 2015 U.S. Report, which is discouraging since small businesses are viewed as primary sources of economic growth and job creation.

Another worrying trend is the growing percentage of investment capital that is going to fund high value startups and some valued at $1 billion or more, while funding for smaller high-growth startups has significantly declined.

Competitive pressures from globalization has also played a role. The rancorous debate on foreign trade during the the Presidential primaries has underscored the depth of public concern. Fears that technological innovations could result in the loss of scores of jobs to automation was another factor. According to one witness, a study conducted by Oxford University estimated that nearly half of American workers were at risk of losing their jobs to a machine. Both factors have become key issues in the 2016 US elections for President, the Congress and in states across the country.

Senators from both sides of the aisle spoke of the challenges facing entrepreneurs and startups in states like Michigan, North Dakota, Washington, and Colorado. While all senators would be happy to have the next Facebook open for business in their state, their focus was on local industries. For example, Senators Cory Gardner (R) of-Colorado and Heidi Heitkamp (D) of North Dakota discussed the difficulties that entrepreneurs have to get capital financing to start small high-growth businesses in agriculture, retail, product manufacturing and service industries in rural areas and in economically distressed regions of the United States.

Providing Incentives for Starting & Funding High-Value Small Businesses.   What happened next was extraordinary. There was no partisan skirmishing, only agreement that there is a problem. The lawmakers did not criticize the financial industry but asked the witnesses for ideas on what could be done to increase the availability of investment capital for small high-growth companies throughout the United States.

The witnesses responded with suggestions for revisions to the JOBS Act, which helps to make it easier for startups to raise equity, and to pass the HALO Act, which excludes startup accelerator’s demo days from federal laws on general solicitation requirements that are barriers between startups and angel investors. They also recommended modernizing federal, state and local regulations in order to provide incentives for entrepreneurs to start businesses and financial firms to provide them with investment capital.

They underscored the importance of taking steps to support the growth of innovation eco-systems nationwide, including encouraging STEM and startup business skills training for future entrepreneurs. Other recommendations included more government support for basic research to keep the United States a global leader in biotech and in other critical scientific areas and patent law reforms to reduce risks from “patent trolls”.

One recommendation that stood out was to have accessible retirement plans for self-employed persons. The fall of pension plans and the rise of the “gig economy” has placed a larger burden on workers to plan for retirement. Entrepreneurs will also retire someday and there are no guarantees that the high risk ventures they dedicate their lives to will be financially successful.

There was a real give-and-take conversation between the Committee and the witnesses. I recommend reading the written testimony for more details.

The Congress will reopen for business in early September. Some of the Committee members will be campaigning for reelection or supporting their party’s presidential candidate in one of the most divisive national elections in recent history.

Will the same bi-partisan atmosphere be there when the Committee reconvenes later this year to revisit these issues? I hope so. The country’s future could depend on it.

Corporate governance decisions that can’t wait

I was reminded of how important corporate governance is for start-up founders and small business owners after listening to a friend’s woes about the conflict between him and his grown siblings over their deceased parent’s estate.

They were the picture perfect family that you could imagine being invited to the U.S. White House for tea with the President and the First Family. All of the children were great students, superb athletes and had supportive parents who ran a very successful family business and were deeply involved in local community affairs. The parents and children were devoted to each other and had a large circle of friends.

The crack in the foundation was the lack of an updated will and estate plan that would provide a governance structure for the children to follow after the deaths of their parents. Their parent’s will had been drawn up when they were children and didn’t reflect any changes in their family’s asset. To further complicate matters, the parents didn’t speak with them about the will and estate planning before they died. The siblings assumed that their parents had updated both documents. This perfect family had a perfect mess on their hands.

A business, like a family, needs a governing system that is transparent and involves all key stakeholders in order to manage assets, plan, and make decisions as well as manage day-to-day operations. A 2013 PwC survey of business owners showed that smaller and medium sized businesses were less likely than larger businesses to address corporate governance issues. The examples of two companies that failed to address corporate governance issues detailed below should give anyone who thinks these issues can be put off a moment of pause.

Succession Planning Gone Awry

The highly public and bitter board level dispute for control of media magnate Sumner Redstone’s majority holdings in Viacom and CBS demonstrates the perils facing a company that procrastinates on succession planning. Mr. Redstone and his daughter Shari, who is vice chair of both companies, have gone to court to oust long-time Viacom CEO, Philippe Dauman and a Viacom board member from a seven-member trust that will have control of Redstone’s holdings after he dies or becomes incapacitated for health reasons.

Charges and counter charges are flying back and forth. The key issue that could decide the dispute is whether 93 year-old Sumner Redstone was mentally competent when he made the decision to sack his CEO and a Viacom board member from the trust. The dispute has divided the Redstone family, who are also senior shareholders. In the meantime, Viacom is a paying a big price for this board level conflict. Its share price has been dropping and long-time key executives that have been instrumental in making Viacom a media giant are leaving.

The lack of a succession plan for when Sumner Redstone steps down or is forced out by health issues or death is at the heart of this destructive dispute. Redstone himself has been the single most important barrier. He has had on-and-off relationships with members of the family who were seen as heirs apparent, including daughter Shari and son Brent who left after major disagreements with his father. Redstone was a mentor and personally close to Viacom CEO Dauman until he recently changed his mind and aligned with Shari to force Dauman out. Redstone’s stubborn resistance to stepping back from a leadership role is not new. In 1986, Redstone told the Boston Magazine that he planned to run the company until the day he dies. Thirty years later Redstone still appears to have this goal. Whether the courts or mortality will intervene first to support or spoil Redstone’s plans will be seen. In the meantime, Viacom has a divided and distracted leadership. Not a good combination to have in the highly competitive media business.

Group Think in the Board Room Results in Bad Decisions

Big companies are not the only candidates for corporate governance failures. Smaller and medium size companies are just as susceptible. One of the most memorable in recent years is Fab.com, the once fast growing online retail site that offered limited numbers of highly sought after items at low prices, that encouraged impulse buying, or flash sales. The problem for Fab.com was not a lack of succession planning, but a board decision-making process that allowed group think to prevail without fully vetting a dissenting board member’s views on a major business decision on whether to expand globally. That mistake, according to Goldberg, ultimately led to the demise of the company.

Before this, Fab.com was on a roll. Sales were exploding, investment capital poured in and the company began a hiring spree and several acquisitions. The high water mark was when Fab.com’s valuation reached the $1 billion. But there was trouble ahead. Fab.com was still operating at a loss. Staying profitable in the online retail sector is extremely challenging with competitors like Amazon and new entrants popping up in the marketplace.

The bright outlook for Fab.com started to dim. Sales estimates were not being met while the costs for staff, warehouses and logistics to finance its expansion burnt through enormous amounts of cash. Investor started putting in less money over concerns about profitability and strategy. Key staff started to leave. A corporate restructuring and big lay-offs were not able to stem the flow of red ink. The one-time Unicorn was eventually sold off for $15 million.

The experiences of Fab.com and the ongoing drama at Viacom provides lessons learned on the importance of corporate governance to SMEs to becoming successful and sustainable businesses. These include:

Have independent voices on your board of directors or advisory board – Whether a publicly or privately held company, it is essential to have directors or advisors that have no commercial relationship with your company (related party transactions). Independent directors are less likely to be influenced on major decisions by self-interest or dissuaded from taking a dissenting view on board decisions. The Founder should not appoint clones of himself/herself that would hesitate to question proposals introduced by executive management, but appoint individuals that would thoroughly address all sides of a major decision, avoid group think and put the best interests of the company first (Founders/CEOs should use the same practice for hiring executive managers). Independent voices, and even those of the often annoying contrarians, are important to maintaining the integrity of the board decision-making process. Effective leadership teams in the boardroom or in the C suite are built on the basis of trust. Founders and CEOs have a responsibility for building an atmosphere of trust between them and their boards and executive management team. Without it, the path to success and sustainability is long if not impossible to achieve.

Refresh and diversify your board of directors or advisory board – Having intelligent, qualified and committed people who can offer fresh ideas is a critical asset for any company to manage risk and grow. Diversity is also important. Appointing women, ethnic minorities, and younger and older adults can offer a range of valuable perspectives. The criticism that more white males and fewer women and ethnic minorities are appointed to boards is undoubtedly valid. However, the qualifications for board membership should not be based solely on demographics, but on a person’s ability to think critically, be creative and possess the requisite financial and business skills. A perfectly diverse board of directors or advisory board that fails to challenge executive management and rubber stamps all of its proposals is a step backward.

Plan for the future – address leadership succession now – The time to start succession planning is when your company has a viable product, intellectual property, staff and investors, and growing sales. Your company has become more than a one or two-person operation and has a prospective future that must be protected against potential risks. The proverbial dilemma poised if a founder or controlling shareholder dies or is incapacitated must be planned for. Letting this possible scenario go unaddressed could result in an unwanted disruption and undermine confidence in the company held by investors and employees.

Hiring CEOs and pay compensation – Having a CEO that can effectively lead the company is essential to managing risk and being successful. Do you hire an external candidate or someone from the founder’s group? The answer is that it depends. The argument for an external candidate is that he/she would be more objective than a founder and focus on the best interests of the shareholders. Still, there are a number of founders that hold CEO positions and have superb leadership and management skills. Compensating a CEO and other key staff adequately and incentivizing them is another challenge. Finding the right candidate with a combination of skills, passion for the company and its products and strategic vision is perhaps a company’s most important corporate governance decision.

The last time I checked, my friend and his siblings were still battling in the courts. So are the disputants in the Viacom case. Fab.com is not the online powerhouse it once was. I am sure that today the main actors in those dramas are kicking themselves for not addressing the governance issues that could have prevented these unnecessary problems.

Out-of-the-box thinking propels healthcare solutions

The quest to eradicate the world’s most deadly diseases recently received big boosts from two billionaire tech industry giants. On Thursday, April 13th, Sean Parker, Napster’s co-founder and the first president of Facebook, announced a $250 million bequest to accelerate cancer research. Last month, Microsoft co-founder Paul Allen gave $100 million.

Parker and Allen want to disrupt the medical research community’s way of searching for cures to major diseases. Entrepreneurs are by nature impatient. They break away from the status quo to create something new that can change the world.

Allen said his initiative targets “research areas that may be too early, too radical or too high risk to make it though the government’s often conservative grant-making process” (Washington Post, March 24, 2016).

Parker has brought together some of the best cancer researchers from major universities and labs to collaborate on finding cures for cancer through immunotherapy research in his newly formed Parker Institute for Cancer Immunotherapy. His inspiration was the promising cancer research taking place, but at different organizations. He recognized the need for connecting “the patchwork of discovery happening across the top cancer centers” to allow for more information sharing and collaboration (Fortune, April 13, 2016).

The urgency behind Allen and Parker’s initiatives is not unfounded. Last year’s devastating Ebola outbreak and the growing threat from the Zika virus has underscored the urgency of accelerating the process of research and testing to produce effective medicines to stop the human tragedy from these major diseases.

The same out-of-the box approaches are being used by other entrepreneurs to develop health technologies to prevent injuries, lower healthcare costs and promote healthier work practices and lifestyles.

The day after Paul Allen’s announcement, I watched the inaugural cohort of startups working out of Relevant Health, a Rockville, MD-based health technology accelerator, present their out-of-box solutions to health care problems to an audience of healthcare investors and officials.

Here are brief descriptions of the startups:

ErgonometriX has developed a wearable device with algorithms to monitor a worker’s risk for lower back injuries caused by lifting and repetitive movements. Employers and workers would use the data to modify work behaviors and lead to better work performance, fewer injuries and lower costs for workers’ compensation.

Lazy Corporation has developed a state-of-the-art IT platform for healthcare providers to process and report federally mandated quality measures, and to reduce the heavy administrative burden of meeting the requirements for data reporting.

CheeksUp has developed an interactive, computerized guided system to support child speech therapy and rehabilitation from facial motor disorders. The product uses the latest 3D camera technology in combination with proprietary algorithms to accurately map and monitor facial movements. It uses gaming features to engage the child and make the therapist’s exercise plan a fun experience.

Werbie has developed a mobile digital therapeutic system for women with gestational diabetes help them manage their daily glucose levels and carbohydrate intakes in order to have healthier pregnancies and deliveries.

Neopenda has developed a vital signs monitoring system for newborns in developing countries that can be affixed to a stocking cap and provide immediate alerts to changes in the baby’s condition to the hospital staff via a mobile tablet device, and at a significantly lower cost than similar monitoring devices used in developed countries.

Gastro Girl is a personalized digital health platform to help people with gastrointestinal problems to stay in compliance with their treatment plans. To achieve this, it uses coaching, nutritional counseling and an online community with insights and expertise. Each user keeps an online journal in order to better understand the connection between symptoms and their diet, stress levels, emotions and exercise program. NB: I was assured by the founder/CEO that Gastro Girl is also available to men. In fact, the first two customers were men.

Agewell Biometrics has developed a cloud-based analytics platform that provides data for older adults and their caregivers on undetected risk factors such as impaired balance that could result in falls causing severe injuries that could jeopardize an older persons ability to live independently.

I left the Demo Day with a feeling of hope. These innovative products could help people lead healthier, productive and happier lives. The Zika virus, cancer and other life threatening diseases are still deadly, but now a step closer to being cured.

If you would like more information about any of these startups and Relevant Health’s accelerator program, please visit Relevant Health’s website at www.relevanthealth.md.

For a fuller picture of what Montgomery County, Maryland is doing to promote health technology, I suggest visiting the websites of RH’s principal supporters, BioHealth Innovation at www.bilhealthinnovation.org and Montgomery County Economic Development at www.choosemontgomerymd.com.