While I don't wish an event like this on an executive, if you're a senior leader for any significant length of time, you will have to deal with this type of situation at some point.
Recently I was speaking with the CEO of a company I coach. She called me in a bit of a panic as she just found evidence that one of her key employees was stealing by ordering items online and shipping it to their house.
Employee theft is an unfortunate situation, but sadly this was not the first time or the last time that it will ever happen. In fact, it happened to me in my company, too. In these coaching situations, I try not to jump into telling her what to do. Instead, I discuss what happened to me and how me and my company dealt with it.
First, gather the facts
The first sign that something was wrong was when hundreds of dollars of Amazon orders didn't seem to be coming to the office. It was obvious that something was off and it was clear who was likely to blame, but exactly what, how much, and for how long was not clear.
The first thing I did was to have someone who I could trust—but who was uninvolved in the situation—do a deeper dive to pull together data. We did this quickly because the risk was still active.
It turned out that we were wrong. It wasn't hundreds of dollars, it was thousands of dollars and it had been going on for months. Once we knew the extent, we knew more about the scope we were dealing with. This is critical information to have before proceeding because different scales require different responses.
Take protective action quickly
We had the data within a few hours and knew we needed to act quickly. We cancelled the credit cards, changed passwords, locked down accounts and email addresses, and made copies of all of the records we needed to pursue a variety of different options in order to deal with the situation.
Wait to decide on punitive actions
Another executive on my team at the time was ready to grab their pitchfork and go after the culprit. They were livid that someone would even attempt to pull this off. They were doubly angry because the assailant reported to them.
While I understood the emotion, I asked everyone on the leadership team to take a day to think it through. I realized that we were all very emotional and knew that if we were going to make a good decision, we needed to be in a more neutral state.
Once we had a chance to think it through, I realized two things. One, that we would spend a lot time, money, and energy trying to hunt down evidence, file reports, and press charges. And two, that we were unlikely to recuperate any of the losses.
In the end, we made the person an offer: return as much of the goods as possible and come up with any repayment they could reasonable afford, and we would not press charges.
Move forward quickly
I realized at the time that having the topic open and active at our leadership teams was causing the greatest amount of damage. In fact, it was causing more damage than any dollar amount that was actually lost.
The time we were spending and the emotional drain of talking about such a deflating topic was preventing us from tackling bigger, better, and more important opportunities. By quickly moving forward and putting it behind us we limited the true damage to the company.
Learn from the mistake and make changes
While this was clearly theft, the real person to blame was me. As CEO, I hadn't put in place the proper procedures, checks, and balances. While you can't always prevent these types of things, you can certainly catch them quickly. And I had not.
The powerful thing about taking full responsibility is that you gain full control for making changes. We changed the way we approved budgets, placed orders, tracked shipments, took deliveries, made payments, and reported expenses—all things that we should have be doing before.
Don't take it personally and have compassion
While getting all of the process changes right was important, the more important thing we did was not take any of it personally. One executive was very furious and bent out of shape. And while I understood her anger, it affected her performance for weeks which only makes the situation worse.
In a private discussion we spoke about it at length. I explained my point of view that while we needed to take responsibility and action, we couldn't hang onto the negative emotion. This was nothing more than an expensive life lesson. Moving forward was more important than getting even.
While it's never easy to deal with these types of situations, it’s important to remember that businesses are made up of people and people are far from perfect. When these flaws present themselves, it’s best to handle them with grace, forgiveness, and expediency rather than roil in negative emotions of anger and retribution.
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