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The Downfall of Historic Corporate Responsibility

Tuesday, March 10th, 2020

I wrote yesterday’s Oldie back in 2007; it ended with this comment,

Corporate responsibility is a major buzzword these days, but it’s hard to tell whether it’s tied more closely to

  • doing what’s right;
  • doing what you can get away with; or
  • not getting caught.

It’s taken 13 years for practitioners of the second and third approaches to even consider changing.

The pressure they face to take such steps is real; the industry’s years of reliance on hypocrisy, lobbying, and misleading public relations tactics is eerily reminiscent of the approach taken by tobacco companies, and its litigation risks are set to follow a similar trajectory, with lawyers and activists framing failure to address climate change as a human-rights violation.

The changes certainly aren’t being driven by the Feds (consider the EPA’s decision to limit scientific research when drafting environmental and public health regulations), but by people.

The corporate responsibility façade is—finally, thankfully—crumbling. Activist investors and angry citizens have forced a reckoning. The Conference Board views the upcoming 2020 proxy season as a tipping point for disclosure of corporate political activity.

Even more potent are Gen Z’s and many Millennial’s attitude on choosing a place to work.

Young graduates evaluating prospective employers know that the true narrative of a corporation’s purpose can be found by reviewing who it does business with and which politicians it backs [emphasis mine].

There is no company that can survive without an adequate workforce and there is no Generation in history as suspicious and downright cynical about corporate America, including Big Tech, unicorns and startups in general than Gen Z — an attitude already infecting other generational segments.

Amazon employee reaction to CEO Jeff Bezos’ climate change initiative is a good example.

Amazon Employees for Climate Justice responded to Jeff Bezos’s recent $10 billion commitment to fight climate change by reminding their CEO that “one hand cannot give what the other is taking away.”

That two-faced approach isn’t unusual; in fact, it’s common practice — more plainly described as talk the talk, but screw the walk.

It will be difficult for that approach to continue working when it seriously limits recruiting efforts, not to mention paying customers.

Image credit: Frits Ahlefeldt

Crooked Signs of the Times

Tuesday, February 25th, 2020

https://www.flickr.com/photos/newtown_grafitti/8353307428/

It’s a good time for crooks of all kinds.

Corporate shenanigans are a growth industry. Not since the days of the robber barons has white collar crime enjoyed such freedom.

OVER THE LAST TWO YEARS, nearly every institution of American life has taken on the unmistakable stench of moral rot.

Tax evasion siphons 10,000 times more money out of the U.S. economy every year than bank robberies. SOURCE: FBI; IRS.

And this clubbiness has human costs. Tax evasion, to pick just one crime concentrated among the wealthy, already siphons up to 10,000 times more money out of the U.S. economy every year than bank robberies. In 2017, researchers estimated that fraud by America’s largest corporations cost Americans up to $360 billion annually between 1996 and 2004.

Tech took a personal hit thanks to Warren Buffet’s partner Charlie Munger and his views on EBITDA, which stands for earnings before interest, taxes, depreciation and amortization. Tech companies love to talk about their “adjusted EBITDA,” because it makes them look profitable — even a financial loser like Uber.

“I don’t like when investment bankers talk about EBITDA, which I call bulls— earnings,” Munger said at a recent company shareholders meeting. “Think of the basic intellectual dishonesty that comes when you start talking about adjusted EBITDA. You’re almost announcing you’re a flake.”

Tech workers aren’t faring well, either, even at the most hallowed companies.

Silicon Valley has often held itself up as a highly evolved ecosystem that defies the usual capital-labor dichotomy — a place where investors, founders, executives and workers are all far too dependent on one another to make anything so crass as class warfare. The recent developments at Google have thrown that egalitarian story into doubt, showing that even in the most rarefied corners of Silicon Valley, the bosses are willing to close ranks and shut down debate when the stakes are high enough. (…)  Workers weren’t just organizing to save the world from Google. They were also organizing to save themselves from Google, where those who didn’t fit the mold of the straight, white, male techie felt they could be too easily marginalized or dismissed.

The rot isn’t just trickling down, it’s a raging torrent. Student cheating is at an all time high across grades and globally is a billion dollar market.

Philemon is part of the global industry of contract cheating in which students around the world use websites to commission their homework assignments. (…)  Lancaster began studying contract cheating more than a decade ago when he noticed one of his own students posting assignments online. “I found one of my students who was putting up my assignment up for tender on an internet site. So, people were bidding different amounts of money to complete that computer programming assignment.”

Let’s hope the handbasket we’re careening down in is well made, so we can survive our trip to Hell and come out the other side in one piece.

Image credit: Newtown grafitti

Hat tip to KG for sending me the white collar crime article.

Is Tech Unstoppable?

Tuesday, February 18th, 2020

If, like me, you wonder if there is anything to stop tech from its all-consuming forward march, there may be.

Tech needs two things to keep going

  • workers and
  • users

So what happens when those segments start rebelling?

There’s a tech backlash best seen in the newest crop of workers.

“Working at Google or Facebook seemed like the coolest thing ever my freshman year, because you’d get paid a ton of money but it was socially responsible,” said Chand Rajendra-Nicolucci, 21, a senior at the University of Michigan. “It was like a utopian workplace.”

Now, he said, “there’s more hesitation about the moral qualities of these jobs. It’s like how people look at Wall Street.”

“It felt like in my freshman year Google, Palantir and Facebook were these shiny places everyone wanted to be. It was like, ‘Wow, you work at Facebook. You must be really smart,’” said Ms. Dogru, 23. “Now if a classmate tells me they’re joining Palantir or Facebook, there’s an awkward gap where they feel like they have to justify themselves.”

Audrey Steinkamp, a 19-year-old sophomore at Yale, which sends about 10 percent of each graduating class into tech, said that taking a job in Silicon Valley is seen as “selling out,” no different from the economics majors going into consulting who are “lovingly and not-so-lovingly called ‘snakes.’”

“The work you do at a place like Facebook could be harmful at a much larger scale than an investment bank,” Ms. Dogru said. “It’s in the pockets of millions of people, and it’s a source of news for millions of people. It’s working at a scary scale.”

Oops, seems that the moral considerations of where to work are of much more importance for both college and grad students.

Agriculture is supposed to be a market “ripe for disruption,” including tractors that do everything except scratch your back.

You’d think farmers would be cheering.

Instead they are searching out tractors made in the 1970s and 80s that are more profitable to use.

Tractors manufactured in the late 1970s and 1980s are some of the hottest items in farm auctions across the Midwest these days — and it’s not because they’re antiques.

Cost-conscious farmers are looking for bargains, and tractors from that era are well-built and totally functional, and aren’t as complicated or expensive to repair as more recent models that run on sophisticated software.

And it’s the “sophisticated software” they don’t want.

But tractors from the 1970s and 1980s aren’t so dramatically different from tractors produced in the 2000s, other than the irksome software, and at a time when farmers are struggling financially, older tractors can make a lot of business sense.

Both are good news.

Constricting the worker pipeline at one end and a user rebellion at the other are two of the few things that can act as Daniel to tech’s Goliath.

Image credit: Roger W

Tech’s Biggest Lie: Evolution

Tuesday, October 29th, 2019

https://www.flickr.com/photos/httpoldmaisonblogspotcom/2917049234/

As we saw yesterday, staying highly skeptical of all cyber-information, from friends/followers through speeches and videos is a necessity these days.

But the question arises,

Where did we get the idea that tech meant progress and that it’s inevitable.

Neither are true, especially the inevitable part.

The tech world loves to claim that technology is like evolution, therefore inevitable.

Technologists’ desire to make a parallel to evolution is flawed at its very foundation. Evolution is driven by random mutation — mistakes, not plans. (…)  Evolution doesn’t patent things or do focus groups. Evolution doesn’t spend millions of dollars lobbying Congress to ensure that its plans go unfettered.

What a crock, but people have bought into the mindset.

You can see it playing out in all the smart (hackable) products.

People claim they want the convenience, but that so-called convenience is killing creativity.

Humans make choices.

Tech bosses are human.

And it’s us humans who will pay the price for the supposed inevitability of tech evolution.

Image credit: Charles LeBlanc

47 Billion to Almost Zero in Just Six Weeks

Wednesday, October 16th, 2019

https://www.flickr.com/photos/southbeachcars/30059814877/

Top bosses can create/ruin more than a company’s culture, they can literally destroy the company.

How much damage can one person inflict?

Ask Adam Neumann, founder and ex-CEO of WeWork.

Just six weeks ago, the coworking giant WeWork was the US’s most valuable tech startup.

How valuable? Try $47 billion, based on it’s last funding round.

Then it tried to go public.

Almost immediately, all hell broke loose. A steady stream of rapid-fire headlines detailed Neumann’s self-dealing, mismanagement, and bizarre behavior. Within 33 days the offering was scuttled, WeWork’s valuation plummeted 70% or more, and Neumann, who believed he would become the world’s first trillionaire, was ousted as CEO. What was supposed to be Neumann’s coronation as a visionary became one of the most catastrophically bungled attempted debuts in business history.

Hard to believe, but it seems a lesson has been learned and the so-called magic of Silicon Valley is waning. Visions and charisma are no longer enough.

Investors, reporters, and analysts, chastened after seeing Theranos revealed as a massive fraud and watching Uber fail to live up to the hype, didn’t let another visionary founder pull the wool over their eyes.

Without new funding, and with the IPO shelved, WeWork could run out of money by Thanksgiving and be forced to file bankruptcy.

Founders and CEOs aren’t gods.

They are mere mortals; human beings just as capable of screwing up as anyone else.

There’s an old Italian proverb that says it all — after the game, the King and the pawn go into the same box.

Image credit: Phillip Pessar

It’s the Boss, Stupid

Tuesday, October 15th, 2019

https://www.flickr.com/photos/vuhung/12461011705/

It’s said that people don’t leave companies, they leave bosses, but now and then it’s the top bosses, the ones who control the culture, who create the circumstances that incite an exodus, as opposed to an immediate manager.

That’s what’s going on at Google, according to James Whittaker, who left Microsoft for Google and then left Google to return there.

The Google I was passionate about was a technology company that empowered its employees to innovate. The Google I left was an advertising company with a single corporate-mandated focus.

Googlers have left because of harassment, retaliation, various governments’ contracts/projects, treatment of contractors, and other ethical considerations.

Google’s bosses are also some of the biggest hypocrites in tech. Worse even than Zuckerberg at saying one thing while doing the opposite covertly — especially something that negatively affects the entire planet, not just people’s privacy.

Despite making noises about becoming more environmentally friendly, Google has been quietly funding organizations which say climate change isn’t real [emphasis mine].

Fortunately, all the clandestine stuff keeps surfacing and people are coming to the realization that Google is anything but benevolent.

All these things fall under the culture umbrella.

A culture controlled by Google bosses.

Image credit: Nguyen Hung Vu

Amazon’s Consumer Kool-Aid

Wednesday, September 11th, 2019

https://www.flickr.com/photos/jeepersmedia/12892968354/

Amazon is right up there when considering big tech Kool-Aid.

All by itself it has done more to addict consumers to near instant gratification, with no vision past themselves, than any other company.

In doing so it has actually killed people and ruined lives.

And it has done it in a way that shielded it from both notoriety and financial responsibility.

Rather than a synopsis and comments from me, take a few minutes to read the original ProPublica’s, in conjunction with The New York Times, investigative article.

This isn’t the first article detailing deplorable working conditions that have resulted in numerous walkouts by Amazon and contracted workers,

But the only walkout that would actually have an impact is a customer walkout.

Obviously, it’s unlikely that anyone will actually quit using Amazon.

But if just 1% of users stopped for just one week, Amazon would definitely sit up and take notice.

And if a higher percentage stopped even better.

Whether it’s Amazon, Uber or any of dozens of other companies whose business model is built on unfair/dangerous worker practices they need to step up and start taking responsibility for the actions of people who deliver their “experiences,” instead of claiming they are “independent contractors” while still controlling their daily actions at work.

Image credit: Mike Mozart

Altered States: Drinking Big Tech Kool-Aid

Tuesday, September 10th, 2019

https://www.flickr.com/photos/jeepersmedia/12892968354/

Yesterday I commented that no matter how stellar someone’s past performance it wasn’t a guarantee of future performance.

There are very few guarantees in life, but I do know of one thing you can count on.

And that is that the bosses of big tech lie.

They do it with flair, sincerity, a straight face and in writing.

Their devices listen to and share your words with outsiders — outside the company and the country.

Although no immediate action was taken against Apple or Amazon— which both have been found to also listen in on their users — the commissioner’s report “invited” the companies “swiftly review” their policies and procedures.

Apple says, “all reviewers are under the obligation to adhere to Apple’s strict confidentiality requirements,” but we all know that people blab.

The Terms of Service (TOS) go beyond straight lies by being opaque and obfuscated. Their rules and meaning are a constantly moving target that even the NYT can’t figure out

The Times reported 46 of the accounts to Instagram, the site responded within 24 hours that none violated its rules, without explaining why.

The accounts were scams using scraped images of innocent US military personnel to get money from innocent US citizens.

While fraud has proliferated on Facebook for years, those running the military romance scams are taking on not only one of the world’s most influential companies, but also the most powerful military — and succeeding.

Apparently fraud doesn’t violate the TOS.

But why should it, since violence, hate speech and bullying don’t.

It’s not as if your data is unidentifiable (there’s no such thing as “anonymized data”).

And “we care about your privacy” is the biggest lie of all.

Image credit: Mike Mozart

Golden Oldies: The Story Of Labor Day

Monday, September 2nd, 2019

https://en.wikipedia.org/wiki/Pullman_Strike#/media/File:940721-remington-givingthemthebutt-harpersweekly.jpg

Poking through 11+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

Labor Day started as a sop to the working masses after a strike was broken using Federal troops. When I was young Labor Day was an actual holiday when businesses closed. Fast forward to today and for many it’s a workday like any other and a great reason for businesses to have sales.

Read other Golden Oldies here.

Have you ever taken time to wonder why there is a holiday dedicated to people who work?

No?

Then before you get too caught up in shopping, beer and BBQ, take a minute to learn exactly where the holiday comes from.

It’s the result of an 1894 labor strike against the Pullman Company (think aspirational, luxury private railroad cars).

Engineer and industrialist George Pullman’s workers all lived in company-owned buildings. The town was highly stratified. Pullman himself lived in a mansion, managers resided in houses, skilled workers lived in small apartments, and laborers stayed in barracks-style dormitories. The housing conditions were cramped by modern standards, but the town was sanitary and safe, and even included paved streets and stores.

Then the disastrous economic depression of the 1890s struck. Pullman made a decision to cut costs — by lowering wages.

In a sense, workers throughout Chicago, and the country at large, were in the same boat as the Pullman employees. Wages dropped across the board, and prices fell. However, after cutting pay by nearly 30%, Pullman refused to lower the rent on the company-owned buildings and the prices in the company-owned stores accordingly.

Federal troops used extreme force to break the strike resulting in 30 deaths, while rioting and sabotage left 80 million dollars worth of damage in its wake.

Indiana state professor and labor historian Richard Schneirov said President Grover Cleveland’s decision to declare Labor Day as a holiday for workers was likely a move meant to please his constituents after the controversial handling of the strike. The president was a Democrat, and most urban laborers at the time were Catholic Democrats.

Congress approved (knowing their constituents would also be pleased).

Makes you wonder what the current president and congress would do.

Image credit: Fredrick Remington via Wikimedia Commons

YouTube Embraces “Greed is Good”

Tuesday, July 9th, 2019

https://www.flickr.com/photos/joegoauk73/29263326185/

I’ve written before that Alphabet has no scruples about how its various parts make money as long as they do.

YouTube is the most obvious proof.

It wasn’t until major brands pulled their ads that YouTube cleaned up a tiny bit of its act.

YouTube has previously been forced to make major changes because of advertiser backlash. In 2017, hundreds of brands pulled their advertising from YouTube after The Times reported their ads were appearing next to extremist videos. Dubbed the “YouTube Adpocalypse,” the mass boycott cost YouTube’s parent company, Google, an estimated $750 million, a note from analysts at Nomura Instinet said at the time.

When a “soft-core pedophile ring” was exposed last February YouTube disabled comments on most videos featuring kids, but only because big advertisers walked.

More recently, in spite of concerns over breeches of child privacy, brands have stayed steady and YouTube has done nothing to change.

Nor will it.

Because YOU don’t matter

YOU are a user.

Content providers are users.

As Forrester analyst Renee Murphy says,

“Users are the product, not the customer.”

Brands are the customer.

And the customer is always right.

Image credit: Joegoauk Goa

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