Kathleen Edmond, Best Buy's Chief Ethics Officer

For those who are intrigued by Best Buy’s Peer Review system, I have another interesting case for you. It seems a Best Buy employee was terminated for falsifying records and later disputed the discipline as unfair. A Peer Review panel ultimately agreed with the employee, overturned the termination, and reinstated her as a Best Buy employee. But, first, a little background.

 Best Buy is often paid by vendors in return for displaying their merchandise in the store according to a very precise “planogram.” The employees in charge of our in-store merchandising process will take photographs of the display on a periodic basis, upload them to the vendor, and thereby document that the work was done according to planogram specs.

 In this particular situation, a Best Buy employee was terminated for falsifying the documents provided to our vendor. Specifically, the employee took a shortcut and provided the same photographic “proof” to the vendor two weeks in a row. The Peer Review investigation revealed there was much more to the case, however. It turns out the terminated employee did not have responsibility for the planogram that day; a different Best Buy employee had done the merchandising work in question. Likewise, it did not appear there was any real intent to mislead the vendor:

 The employee on planogram duty was having problems uploading new photos to the vendor and asked the terminated employee for help. When she also was unable to make the upload system work properly, the terminated employee suggested they simply upload the photos used the prior week. After all, nothing had changed in the planogram since then and the display was set up exactly as pictured one week earlier. What harm could there be in re-using identical one-week-old photographs?

 After considering the facts of the case and testimony from all involved, the Peer Review panel found that the terminated employee did not actually “falsify” the documents. An improper workaround? Yes. Deception? No. The Panel also felt the other employee involved – the one actually accountable for the planogram work that day – was partially responsible for filing the incorrect report. It would be unfair to terminate one employee and not hold the other to the same standard.

 The Peer Review panel voted to reinstate the employee (written warning only) and recommended a variety training steps to ensure the situation would not repeat itself. My questions for you:

 1)    Do you agree with the Peer Review panel’s conclusion that “falsification” did not occur?

 2)    Do you agree the other employee also bore partial responsibility for the issue and should receive similar discipline?

 3)    The investigation revealed that the manager who lodged the initial complaint had multiple performance issues with the terminated employee in the past, specifically related to filing incomplete paperwork. What role might that past history have played in his termination decision? More importantly, should past history be considered when taking disciplinary action for a current offense? Why or why not?

 4)    Where is the line between a seemingly harmless shortcut and a critical breakdown in standard operating procedure? How can you know when you’ve crossed that line?

Scientists at Harvard and Duke claim to have found a connection between creativity and cheating. According to a New York Times piece (“Creative Cheating” by Heather Havrilesky, www.nytimes.com), researchers determined that “creative thinkers are more likely to take unethical shortcuts for gain, possibly because their talents make them better at rationalizing bad behavior.” Dr. Francesca Gino concludes simply that “creativity makes people more morally flexible.” What do you think?

 1)    Do you agree that creative people are generally more “morally flexible” than those who are less creative?

 2)    Do you believe the opposite to necessarily be true? For example, are rigid, left-brain thinkers necessarily ethical? Why or why not?

 3)    The article also hypothesizes that creative people perhaps believe they can “win us back with a creative apology, a creative excuse or a creative defense in court.” Have you ever observed this to be the case? If so, how did it turn out?

 Over the course of my career, I have seen hundreds of situations in which employees are disciplined for bending the rules or violating company policy in some way. It’s not at all unusual for employees to make the following statements in their defense:

• “Everyone does it that way…”
• “I was just following the rest of the group…”
• “Billy and Sally got caught doing the same thing and nothing happened to them…”

 From the standpoint of fairness, it’s always critical to determine whether the action being disciplined was an isolated, willful act by an employee who clearly knew better or if it was a pattern of behavior that was truly condoned or encouraged by those with leadership authority. The former constitutes clear grounds for disciplinary action; the latter is much trickier. (For you film buffs, the “Code Red” subplot in A Few Good Men offers a classic example.) My questions for you:

 1)    If something is wrong and you know it to be wrong, is “everyone does it that way” ever a relevant defense for your actions? Why or why not?

 2)    What if the inappropriate activity in question was openly condoned or encouraged by company leadership? Who should suffer the consequences of discipline?

              a.    Only the subordinate who violated the rule/policy

              b.    Only the leader who condoned/encouraged the activity

              c.    Both equally

             d.    Both, but the leader is more accountable than the subordinate

 3)    What about situations where, in fact, Billy and Sally did get caught doing exactly the same thing and were not disciplined? How would you treat the employee now facing disciplinary action? Why?

This actually is one of my favorite holidays of the year.   It is a time for quiet reflection and anticipation for what may be possible in the future.  In this spirit, I want to thank all of you that have joined this conversation, either online, or offline directly with each other and me.  I appreciate what I have learned from you, and the opportunity to engage in conversations that I think are important for the well being of our business, and for each of us as individuals.  All the best to you in 2012.  We’ll talk soon. 

Kathleen

Stuart Albert of the University of Minnesota’s Carlson School of Management is a renowned expert on the affect that timing has on business decisions big and small. His article titled “The Timing of Dissent” struck me as being particularly relevant given the tragic story now unfolding at Penn State. To paraphrase, Stuart describes how we all bring three types of “lenses” to our decision making interactions within an organization:

• A “content” lens that focuses on the subject matter at hand
• An “economic-political” lens that focuses on who stands to gain or lose from a certain decision, and
• An “action or utility” lens that directs our attention to what must be done

 Stuart notes that a fourth dimension – the “temporal” lens – must also be considered. Timing, claims Stuart, is often the most critical factor in situations calling for a courageous dissenting opinion, such as that now coming to light at Penn State:

 “This article examines the difficult timing problem – namely, how to postpone a course of action that promises to lead to disaster. Someone – a board member, a worker on the line, an external stakeholder, an entire department, a manager – sees that something is going terribly wrong. But no one says anything. The situation continues to unfold. Somehow, no time seems right to object or speak up. After a while, it is simply too late. Usually in hindsight, after litigation leads to a billion-dollar recall or settlement, it becomes clear that, for example, engineering knew how to solve the problem with the ignition system before a line of defective automobiles was produced. What no one knew how to do was intervene effectively in an organizational process that had closed the window on dissent.”

 Stuart uses mythical role play scenarios to illustrate how the temporal lens can “define and locate windows of opportunity” in which to provide a dissenting point of view within an organization. He suggests specific techniques that can be used to regain control of a decision sequence that is all but closed. From buying more time for discussion and encouraging people to consider the long-term ramifications of the decision to re-framing the conversation in a way that will reduce the fear of speaking up, Stuart illustrates how disasters can be avoided by seizing the moment and introducing effective group dynamics to the decision making scenario. My questions for you:

 1)    Have you ever wanted to speak up or offer a dissenting opinion on a group decision but felt the window of opportunity had already closed? If so, what specifically was said or done by the group that made you feel dissent was no longer welcome?

 2)    Reflecting back on the situation from question #1, what might you have done differently to “reopen the window” to dissenting opinions?

 3)    Conversely, have you ever observed a situation in which an inconvenient dissenting opinion ultimately saved a group of decision makers from certain disaster? If so, how was that dissenting opinion presented and why was it effectively received?

 4)    Which of the four lenses described by Stuart (content, economic/political, action/utility, temporal/timing) do you think we usually focus on most when making group decisions and why is that so dangerous to the outcome of the decision?

A colleague of mine recently forwarded a Harvard Business Review article (“Careful Deliberation Makes You More Likely To Cheat,” 11/18/11) that suggests we are more likely to behave unethically when acting deliberately as compared to simply acting on intuition. Researchers at the University of Toronto ran test participants through a variety of decision making scenarios in three different experiments.

 Long story short, when moral judgments were framed as decisions to be made or problems to be solved, participants were far more likely to be deceptive – and less altruistic – than in scenarios where the moral judgments were simply posed as off-the-cuff questions based on intuition. Roughly 68% of participants in a “deliberative” mindset were willing to lie for their own gain compared to just 36% of those who were thinking about the situation “intuitively.” Test participants were also less likely to (for example) donate to a charity when they carefully considered the choice versus following their natural impulse.

 The premise of this research is rather chilling for those of us in the ethics field. We spend so much time imploring our people to always “think before you act.” Should we instead coach people to simply “go with your gut?” My questions for you:

 1)    Knowing what you know about human nature, do you agree with the findings of this study? Why?

 2)    Are you personally more likely or less likely to act ethically and altruistically “in the moment” than if you stop to consider the situation first?

 3)    Have you ever observed a situation where thoughtful, sincere deliberation resulted in a less ethical/altruistic solution than if the decision makers simply went with pure intuition? What happened?

 4)    My dream is that all Best Buy employees become so ethically “enlightened” that they always know right from wrong based purely on intuition. What can we be doing to make this dream a reality?

 One of my readers noted that I have not written about a Peer Review case in a while. Peer Review is the appeals process by which Best Buy employees who feel company policy was inconsistently or improperly applied to them can request a “jury of peers” to hear their side of the story. The Peer Review panel’s decision is binding on the company and has resulted (for example) in dozens of terminated Best Buy employees getting their jobs back over the past several years. Most often, however, the panelists confirm that Best Buy’s leaders have indeed acted appropriately and applied our policies fairly. Here is one such case:

 Several times each year, Best Buy participates in the launch of a hot new consumer electronics product – the type where customers stand in line on launch day or put their names on waiting lists as manufacturer supply slowly catches up to demand. Generally speaking, we do not allow our own employees to purchase products at launch to ensure our customers get the first shot at the allotment we have to sell.

 According to a recent Peer Review summary, one of our employees was terminated for purchasing a restricted new-release product while on the clock during normal store hours. (For this particular release, the policy called for employees to wait until after the store closed that day if they wished to make a personal purchase.) The employee vehemently denied the claim and maintained the case was not properly investigated because his time clock records clearly indicated he had made the purchase off the clock after his shift and all customers had left the store.

 The investigation, however, was very thorough and revealed two damaging facts:

• The employee had made several statements to co-workers regarding his desire to purchase the product regardless of the after-hours policy;
• The time clock system showed that the employee had edited his time for that shift. According to the original time record, he was, in fact, on duty at the time of the purchase and it was during normal business hours.

 Based on these findings, the Peer Review panel found the termination decision to be fair and consistent with company policy. My questions for you:

 1)    Which was worse in your opinion? The fact that the employee violated the after-hours policy or the fact that he edited his time records to cover his tracks?

 2)    Pretend for a moment it had actually been an honest mistake and no attempt had been made to alter time records. When it comes to the fair and consistent application of company policy, are “I did not know” or “I forgot” valid excuses? Why or why not?

 3)    Did co-worker testimony regarding the terminated employee’s statements influence your point of view in any way? If so, how?

 4)    What about Best Buy’s practice of requiring employees to give customers the first chance at high-demand products? Fair or not fair?

We had an unfortunate situation not long ago that underscores how decisions made in one’s personal life can have serious ramifications on your career when you bring those decisions with you to the workplace:

• A newly hired Senior Manager-level Best Buy employee is applying for a car loan. To qualify for the loan, the employee must prove she has been working at least one year for her current employer.
• The new Best Buy Senior Manager asks her peer – as well as a subordinate – to lie on the loan application for her by stating that she has been with Best Buy for more than a year.
• The subordinate obliges but the Senior Manager-level peer is uncomfortable with the request and brings it to our attention.
• Upon investigation, the employee denies that she asked her co-workers to lie on the loan application. Later, she admits to doing so but states that the car dealer was pressuring her to make the purchase, leading her to “cave in” to the dealership.
• After considering the facts, Best Buy terminates the new Senior Manager for inappropriate conduct.

 My questions for you:

 1)    Is it any of Best Buy’s concern what our employees choose to do in their personal financial dealings? If not, where did this particular employee go wrong?

 2)    Is there any difference between asking a peer to lie for you versus asking a direct subordinate to do so? If so, why?

 3)    Which was worse? Asking co-workers to lie on the loan application or denying it after the fact?

 4)    What if this new Best Buy employee was in an entry-level role? Is the fact that she was a Senior Manager-level leader relevant in any way?

 5)    What about the employee’s claim that she was “pressured” by the car dealer? In your opinion, does that mitigate her actions? Why or why not?

Several weeks back, I provided an example of “the good stuff” we often hear from Best Buy’s employees and customers. The vast majority of the time, our people get it right and behave ethically but my blog tends to focus on the negative exceptions. I assure you I am not a nattering nabob of negativism as William Safire might say. It’s simply that this blog is intended to offer effective teaching examples and evoke conversation. More often than not, mistakes provide the most compelling case studies.

 I really am a glass-half-full kind of person, however, and have another upbeat example to prove it. This is an actual submission to our www.BestBuyEthics.com website. I merely changed the supervisor’s name to prevent any potential embarrassment to the former leadership team:

 “As of the past month or two, my supervisor ‘Wendy’ has really stepped up and done a lot for our store. With problems occurring in the store with our old GM and not having one for the past month or so, Wendy has done a lot. She works long hours and makes sure everyone is happy and always steps in when someone is needing help. She makes work fun while we still do our best. She is always there when I need help myself, or just someone to talk to. I appreciate all the work she has done and look up to her. She does a great job with our store and is always in a good mood, even with all the stress she has been under lately. I thank her for everything she has done. She has changed my mind on how I think about the company. I disliked working here my first 6-8 months at the store because of my old GM, but Wendy showed me I can still have fun while doing my best and that I shouldn’t be afraid to ask questions or for help. I appreciate everything she has done and now look forward to coming to work every day.”

 1)    The employee notes how his opinion of Best Buy changed from generally negative (while working under the “old GM”) to generally positive (since Wendy arrived). Whether in school, on a sports team or in the workplace, has a leadership change ever had a similar polarizing impact on your point of view?

 2)    If you had to guess, do you think this employee’s ethical make-up is stronger, weaker or no different since Wendy arrived? Why?

 3)    In the paragraph above, the employee specifies several things that make Wendy a great leader:

1. a.    Hard working
2. b.    Steps in when others need help or counsel
3. c.    Makes the work fun
4. d.    Maintains a positive mood/attitude
5. e.    Encourages others to ask questions

Think about your own workplace experience. Would you be more likely to behave in an ethical manner if you were surrounded by people with these attributes? Why or why not?

An interesting question was recently posed by a Geek Squad employee through our Agent of Justice channel. The employee noted we occasionally have signs in the store – and she is coached to tell our customers – that the store is sold out of a certain product when there is actually a pallet full of that item in the back room. In addition to the frustration of not being able to give customers what they want “in the moment,” this employee feels it is dishonest of Best Buy to handle its merchandise this way.

 I did some investigating and discovered this scenario does play out from time to time. There are indeed instances in which Best Buy stores hold back merchandise and do not make it available to customers on the floor for a few days. However, somewhat ironically, the reasoning behind this practice is actually very pro-customer. In most cases, the merchandise is being held in the back room to ensure a certain quantity of product is on hand when the Sunday newspaper ad appears. (Our ads will often state a minimum quantity available.) In other instances, merchandise may be held back to enable a particular store to compete more effectively with promotions being run by a nearby competitor, such as for a grand opening event by Retailer X.

 Though inventory holds are common industry practice and are actually done to ensure more customers find products in stock more of the time, I can see how it could feel dishonest to an individual employee in an isolated case. My questions for you:

 1)    Do you think a retail store has an ethical obligation to make all of its inventory available for sale at any time? Why or why not?

 2)    What if we told customers the merchandise is on hand but “not for sale” until the Sunday ad appears (i.e., instead of saying it is currently “sold out”). Would that feel better/worse/same to you as a customer? Please explain.

 3)    Pretend you run the store. Which of the following would you choose to do and why?

a)    Hold merchandise back to ensure customers responding to the Sunday newspaper ad find a certain quantity available.

b)    Sell merchandise to customers during the week upon request and risk running out before the Sunday ad appears.

 4)    Can you think of any creative win/win solutions that have not been mentioned above?