RESPONSIVENESS TO WHISTLE BLOWERS AND EARLY WARNING SIGNS

There are several root cause reasons for why we find ourselves in this global economic mess and a few critical improvements needed to learn from our mistakes and reduce future risk.

One thing that I feel must be done after reading about the Madoff and other frauds, as well as Mike's post on Wednesday Leaders Do The Right Thing, Even At Personal Risk is more serious and timely response to whistle blowers/early warnings.

There is now evidence that there were both whistle blowers and early warning signs about the Madoff mess that went unanswered. There have been several others over the years. Why bother to have the SEC enforcement and investigations groups or company hotline systems, if there is not timely follow up on the issue?

But I believe an even bigger issue is when people raise early warning signs and are ignored. Have you ever been in a meeting in which everyone has fallen in love with an idea and you or someone else questions it? You quickly feel alone and as an outcast.

What is great about early warning signs is the word early. That way you can actually do something to correct the issue before it goes too far. But that only works if people are willing to raise the issues.

In this case, I am discussing early warning signs in the broadest manner. Someone challenging an idea; questioning the assumptions; coming at the issue from a new/different perspective; raising concerns about the level of risk; making statements such as this doesn't seem right; etc.

This seems a good time for us all to ask ourselves the following questions:

Are you as a leader creating a culture in which people feel free to raise their concerns and challenge the popular point of view?

Are you as a leader comfortable that these questions or concerns are given serious consideration and not cast aside too quickly?

Are you as a leader comfortable with your organization's process and handling of whistle blower reports?

More to come on the root causes of this crisis and some of the future changes needed to reduce future risk.
Until next time,
Gail