We have been here before with baby milk, pet food and Sudan Red (see more here). Not to mention the execution of the former head of the State Food and Drug Administration. But the current baby milk powder crisis shows that there is still a serious supply chain risk, and that companies need to proactively protect their brands – and their consumers. The current, Sanlu, scandal has now become front page news around the world. Reuters reported on 17 September:

“China’s quality-control regulator ordered the recall of 69 infant-milk products made by 22 dairy companies after samples were found to be tainted by melamine.

The General Administration of Quality Supervision, Inspection and Quarantine ordered the “immediate’’ destruction of the products, it said in a statement on its Web site.

Infant formula contaminated by the industrial chemical has been linked to 1,253 cases of infant kidney stones, killing two.

But how did it happen. Just like our firm found when investigating the background to the Sudan Red crisis on behalf of big foreign brands, it seems to have come down to a dangerous mixture of desire for profit and lack of risk management process, and too much trust. Reuters notes: Read more »

In February I wrote about scapegoating at work after noticing that the issue was coming up more and more with my coaching clients. It struck me that scapegoating had become a widespread and growing problem which was posing significant career implications for the victim.

What I hadn’t realised was just how endemic the phenomenon appears to be - as the comments the post attracted - and continues to attract over a month later - from people around the world. It appears to be happening every day, to a whole range of people, at all levels and in all sorts of companies, from India to Africa, Asia, the U.S., and Europe.

Here are some of the comments from people who have either been made scapegoats themselves or who have observed others suffering the same fate at the hands of their managers. I have grouped them under themes in order to try to make more sense of the phenomenon, plus a couple of questions at the end that remain unanswered for our commentators. My sincere thanks to everyone who sent in their comments and suggestions - from personal experiences to practical ways of dealing with scapegoating and suggestions for reading material. (I recognize this is very long, but that demonstrates how important many of you found this topic.)

Prevalence of scapegoating
This is one of the facts in professional life.(Anon)
One can find this vice practised all over the world. (Audrene Loke )
Scapegoating is becoming the ‘norm’ in the corporate world (Anon)
It is very common in small start-ups when it is all about the interests and directions of the CEO (L)
I don’t believe there are managers out there who haven’t been targeted as scapecoat one time or another throughout their professional career. ( A Wong)
Scapgoating is well known in the healthcare industry (Dinesh Patel)
This is schoolyard bullying in a corporate suit. (T.L. Scott)
I know of endless number of cases wherein managers have damaged the self-esteem of their subordinates. (Uma Arora)

Who is scapegoated?
Successful senior executives (Angela Blackburn/Kate)
Whole teams ( Anon)
Foreign-born engineers in Silicon Valley (Miai)
Junior staff (Amitava Mukherjee)
Quiet people who get on with their jobs (Anonymous)
All levels and in all functions of any organization. (Farooq Ahmed)
A new senior manager dismissing a reportee manager: “I don’t like her; it’s chemical”. (Out Loud)
Inter-departmental in large corporates (Virender Vaira)
Generally to a ‘nobody’. (Vijay)
People with as much as 30-40 years of experience. (pm)
People who do not have a voice.(pm)
Green employees with little or no experience (Oluwafemi Abioye)

By whom?
The boss (Anon)
The CEO (Anonymous)
Brilliant, well educated and successful young executives who grossly abuse their power and authority with no negative consequences (Angela Blackburn)
Those who are more visible to senior management and have more say (Vijay)
Above-board staff who have played politics - seeming them as a sincere, trustworthy and ever performing staff… (Oluwafemi Abioye)

When?
When an unfavourable result occurs and performance is poor (Mike Sewell)
When a new person has taken over as boss.( Anisur Rahman )
Whenever there’s a change - a new person is hired, a merger, a change in existing responsibilities or some other performance based initiatives. (LH Wong)

Why?
[This is] an old and very human tendency. Scapegoating exists in families, among friends, partners and as described above at the work place. Always has. (Mahadevan Sundarraj)
Globally we have lots of wrong pegs in wrong holes in terms of leadership - until leadership qualities are addressed the ugly incidence will continue to spread like cancer in our work environment. (Oluwafemi Abioye)
Less focus on hard work, more focus on quick progression and higher rewards leads to the short cuts. More focus/pressures on results and less focus on the route adopted to attain the results. (Farooq Ahmed)
All the actions are driven by the fear of what the result will be & how the boss will take the meaning. (Anon)
Scapegoating is often resorted by people with a herd mentality (Anonymous)
To create confusion and chaos, to blame rather than fix the problem itself. (Gyan Chand)
Pressures and desires to survive & compete, leading to manupulative tendencies (Virender Vaira)
So an individual may remain in good books of their superiors. (Pm)
Because of the inability or inefficiency of the boss to lead from the front and take onus of his / team resposibilities. (Arun)
Management playing a polical game, pitching one race group against the other. (miai)

Effects of scapegoating
Once scapegoating is observed and condoned, it will spread like fire, demotivate hard working employees who play by the rules and morale will spiral downwards. (Lena Lim )
Solid organisations stand to lose excellent staff thru this unethical practise. (Audrene Loke)
In many cases it takes people months and sometimes years to recover and reconstruct themselves from the damage. (Uma Arora)
10 years on I have not recovered - even today I am suffering because of this and unable to come out of this in my professional life. (Prasanna Kumar)
“Skin saving” attitudes [prevail rather than] than a real work (Jayant)
I was scapegoated by my CEO. I was the star performer now I am in therapy. This is a truly detrimental practice but its sadly the truth in business. (Anonymous)
Many workplace psychological crimes go unreported - the victims and oppressors stay quiet because they don’t want to risk their jobs. (Uma Arora)

What should managers do?
The same techniques we teach our children to use when dealing with bullying apply here. Regardless of whether we are the bullied or the bystander, staying clear, staying silent only supports the behavior. (T.L. Scott)
“Each manager or leader should at least communicate with two levels below him” or may be three levels. (Farooq Ahmed)
There should be something called organizational journalism - people should have a free voice to express their views at all levels so that before someone tries to make a scapegoat, it gets viewed in a very negative light by all concerned.(Uma Arora)
This would be typical issue for internal audit as shareholder’s value being destroyed by either team, CEO, who ever. (Martin Skakala)
Build trust and exercise ethical behavior at all times. It starts from the top. Remove the scapegoater if identified and proven, this person is neither a team player, nor does he or she has interests of the organisation as a whole, but only that of himself (Lena Lim)
Blame-placing should be discoraged - fixing problems is more important than finger pointing. (Jim Wile)
Regular 360 degrees feedback will go a long way in ensuring that such instances, if any are not left under the cover before the annual review / appraisal cycle. (arun)
Management has a role to play in being explicit about accountabiltiies and managing both the team and individuals. It is management’s responsibility to have a real, objective understanding of the performance and people issues behind unsatisfactory results. (Mike Sewell)
Managers should have an insight of the situation and try to investigate causes that lead to an individual be scapegoated. (Anonymous)
A cross-functional team should be put in place to examine such incidents to identify the scapegoater and he/she should either be eliminated or kept on strong vigil to avoid further damage. (Amitava Mukherjee)
Being specific and demonstrating visible and ‘public’ attempts to rectify the situation are advisable. (TL Scott)
Incorporate ethics and leadership courses more effectively into our schools, beginning in high school all the way through grad school. (Angela Blackburn)
Managers need to be more skilled and committed to spotting and stopping bad behaviors at the onset. (LH Wong)

What should victims do?
Keep good records of everything, and I mean everything, that you’ve done during the course of your work day…. from telephone conversation to e-mails to any other written documents. (A Wong)
Quiet, consistant, firm, ethical behavior has rewards greater the the price paid. Have a plan not to be a victim and hold to your standards! (Rick Lorenz)
Sometimes the best thing is to get out of Dodge. Some organizations are toxic. (Rick Maurer)
Don’t allow yourself to become a victim.Trust your instincts and never, never stop networking so that you do not feel trapped in a position that may negatively impact your self confidence and long term success. (Angela Blackburn)
Remaining can eat away at the employee’s sense of self-worth. When the only feedback you get is negative, it’s hard to keep remembering that it isn’t you. (Rick Maurer)

Purushotham Kumar V has this great outline of steps to take:
One should not only be good, but also be smart enough to prevent being scapegoating target. In my view, the following can be the steps to deal with scapegoating:
1. Build trust and confidence with peers, superiors, manager and manger’s manager.
2. Keep eyes wide open: observe who have the attitude to blame others when things fall apart, can be very minor situations. Those who take personal responsibility for failures are trust worthy folks.
3. Build protective fence from blamers, because these will be the potential candidates for scapegoaters. The protective fence includes building visibility, trust and confidence with the potential scapegoater’s manager, peers and other infulential folks in the upward hierarchy.
4. Maintain all documentation and evidence for all good work, communication, interactions with potential scapegoater. Maintain memo / document minutes by asking directed questions.
5. Communicate and attempt build positive relationship with the potential scapegoater. Try understand his/her perspective and analyze what you can do to bridge the gap.
6. When scapegoating seems peaking beyond acceptable threshold, raise the alarm, expose the scapegoater, use some of the documentation and evidence (still save some for later use, just anticipating counter moves by the scapegoater’s supporting party), invoke witness and support from the scapegoaters superiors and peers. Do some social service by doing your best to ensure the scapegoater does not continue in the environment.
7. If the upward hierarchy environment is hopeless, remove yourself from the environment before situation lands you as a scapegoat.

Last but not least, sympathy will only bury the victim into the problem. Let each target ask him/herself “what in me allowed scapegoating”.

I’d like to open up the debate again by building on these questions:
* Why is scapegoating happening so much now?
* Who are the targets and why?
* What are managers’ responsibilities?
* What can the victims do?
* What can the rest of us do about it?

Three respondents also have further questions:
* Diana: How does the scapegoater choose his or her victim? What is the profile of the victim? Male or female?
* Mayra Coppin: When this occurs in a direct reporting relationship, what are the most effective responses?
* Jim Wile: What about management’s involvement in and encouragement of scapegoating?

Let’s get to the bottom of this issue and see if we can construct some more useful, pracical approaches to ensure it doesn’t affect too many more individuals, teams and companies. I look forward to hearing from you.

Read all of Gill Corkindale’s Letter from London posts.

One issue that should rise to the top of the corporate agenda in 2008 is diversity — or, more specifically, how managers and leaders deal with it. Diversity has been on the agenda for decades — differences of class, gender, ethnicity, faith, culture, education and sexual orientation are well understood — but diversity has taken centre stage in recent years due to factors such as advancing globalisation, the 9/11 terrorist attacks and the wars in Iraq and Afghanistan. Yet the concept of humanity seems to have disappeared.

In our headlong rush to manage the challenges of multiculturalism, we seem to have forgotten this basic point. Globalisation has brought an added level of complexity to multiculturalism as talented international managers move around the world and competition grows from dynamic emerging markets. In the US, managers are increasingly reporting to foreign bosses with more international outlook. Take some recent senior appointments – Muhtar Kent, who holds US and Turkish citizenship, was recently named boss of Coca-Cola, while Vikram Pandit, Indian-born and raised in the US, and Sir Win Bischoff, German-born and raised in South Africa, have been recently appointed chief executive and executive and chairman of Citigroup respectively. Recent research by Heidrick & Struggles found that only one-third of Fortune 100 CEOs have international experience (defined as having worked at least a year on foreign soil), while four out of six chief executives in the FTSE 100 have served outside the UK at some point in their career.

So what does all this mean for managers and leaders in 2008? An even more complicated job, if the proponents of ‘diversity & inclusion’ training are to be believed. The Conference Board alone held three Diversity Conferences in three US cities in 2007, covering, among other issues, ‘Generational Differences’, ‘Latino Complexities’, ‘Asian Multiplicities’ and ‘Spirituality in the Workplace’. It urged managers and leaders to ‘maximize diverse contributions’, develop and measure ‘diversity and inclusion solutions’ and manage ‘human capital needs strategically and equitably’ to ‘create culturally competent workplaces’. A tall order for executives navigating growing economic uncertainty and the threat of recession!

As a pragmatic Brit, I believe we should look for simplicity first and resist all attempts to make life more complicated than it is. While there is no question that it is a critical issue, we perhaps need to reframe the way we view diversity.

If managers and leaders take diversity as their starting point, they face myriad worldviews and norms which they will probably never fully understand or assimilate. But what if we looked at diversity from a different angle? Why not begin with what we have in common? Humanity. Most of us share the desire to work, to be safe, to build a healthy life and family, to contribute in some way to work and society.

Humanity is the great leveller: it precedes values and beliefs, culture and norms, nationality, race, religion, gender, lifestyle, education, class and sexual orientation. When we focus on humanity, we see that we are all interdependent — and that diversity is a living expression of difference rather than a divisive and complex force to be managed.

With that in mind, I would like to offer my Charter for Humanity at Work in 2008:
• Be mindful of your impact on others
• Be honest in your dealings
• Respect differences: put yourself in others’ shoes
• Keep your promises
• Listen before you speak
• Be kind
• Help each another
• Do your best

Do you agree? Do you have different views on the relative importance of humanity and diversity? Or do you have any ideas for a different Charter for Humanity at Work? Let us know – we want to hear from you. And let me give you all my best wishes for a happy, safe and healthy 2008.

Read all of Gill Corkindale’s “Letter from London” posts.

If anyone ever needed a crash course in how not to lead, Britain’s political, institutional, corporate, and sports leaders have delivered it during the last two months. We have seen a catalogue of mismanagement and failures from leaders whose competence, intelligence and sense and integrity leave much to be desired. Here are some highlights (or, to be more specific, lowlights):

The PM and his government
David Cameron, Leader of the Conservatives, summed up the country’s feelings about Gordon Brown when he said last week “We have had 155 days of this government. We’ve had disaster after disaster. A run on a bank, half the country’s details lost in the post, and now this. His excuses go from incompetence to complacency and there are questions about his integrity. Aren’t people rightly asking now, is this man simply not cut out for the job?” Another opposition leader wryly claimed that Mr Brown had gone “from Stalin to Mr Bean” in a matter of weeks. Damning words, but take a look at the questions people are asking about the PM and his government:
* Ethics. The PM admitted this week that donations of £600,000 from a secret donor were unlawful and must be paid back. His chief fundraiser knew about it last month, but failed to inform anyone else — including Deputy PM, Harriet Harman, who took the money and whose job is now hanging by a thread.
* Incompetence. Two discs containing the personal and financial information of 25 million people were lost in transit with TNT earlier this month. The PM, who was told about the crisis late in the day by Chancellor Alistair Darling, apologised for the “inconvenience and worries” caused by the loss. Millions of adults and children are now facing identity fraud over the next 10 years. The Data Protection Minister says he was told nothing of the incident before the official statement.
* Spin before security. Home Secretary Jacqui Smith held back information that 5,000 illegal immigrants had been cleared to work in security jobs. Some were employed at ports and airports and one man had been guarding government cars — including that of the PM. Ms Smith declared she was taking action behind the scenes rather than covering up a crisis.
* Neglect and contempt. Five former chiefs of the defence staff warned of “blood on the floor” at the Ministry of Defence because of inadequate funding for the armed forces. The PM was accused of treating the armed forces with “contempt” and “disinterest.”

The Bank, the Chancellor and the Governor
Northern Rock, Britain’s fifth largest mortgage lender, triggered the first run on a British bank in more than a century in September after it was forced to seek emergency funding from the Bank of England. Eventual loans may top £26 billion. Now, the PM, his Chancellor, and the Bank of England Governor are at loggerheads.
* Mismangement and personality clashes. As I wrote in an earlier post, the Northern Rock crisis exposed Mervyn King, Governor of the Bank of England, as of “being asleep at the wheel.” Now it seems that the PM, the Chancellor, and Mr King, the three cornerstones of Britain’s economy, are locked in a tense battle of wills. According to one report, “incompetence, mismanagement, and personality clashes allowed “Northern Wreck” to run out of control.”
* Refusal to step down. Adam Applegarth, disgraced CEO of Northern Rock, finally resigned after being criticized for failing to protect the bank from volatility in the global financial markets and for using a business model that took on too much risk. Three senior executives clung on to their jobs, although they had to step down from the board.

The Police Chief
At the beginning of November, London’s Metropolitan Police force was found guilty of endangering the public over the shooting death of a Brazilian man in July 2005 who had been mistaken for a suicide bomber.
* Lack of accountability. Commissioner of the Metropolitan Police, Sir Ian Blair refused to contemplate stepping down in spite of widespread calls for his resignation. His central claim in his defence was that there was no evidence of ’systemic failure’ in the Met. Yet the court case exposed a devastating series of mistakes in organisation, communication, leadership, training and tactics. The judge called it ‘a corporate failing.’
* Organisational failure. An Independent Police Complaints Commission (IPCC) report found clear, systemic failings in procedures and communication and said Sir Ian tried to prevent its investigation. The court case listed 19 catastrophic errors. “There was failure at every level that there could be failure. The surveillance was inadequate, the intelligence was wrong, the armed officers were not deployed in time, orders were confused and the chain of command broke down.”
* Lack of communication. Reports say that Sir Ian was so out of touch with reality that he was still praising his force’s success 24 hours after his officers had killed an innocent man. Being kept in the dark in this way by subordinates was a dreadful indictment of his leadership.

The Football Managers
November has also been a colourful month for Britain’s football managers.
* Payoff rather than reputation. England football coach Steve McClaren refused to resign after England’s failure to qualify for Euro 2008, the first time it has failed to qualify for a major tournament since 1994. McClaren, who had only been in the job for 18 months, was sacked with a £2.5 million payoff two days later. He is now remembered for being the least successful football manager in England’s 135-year international history. The Football Association has promised a “root-and-branch” review of the England team.
* Corruption questions. This week, Harry Redknapp, manager of Portsmouth FC and one of the favourites to take over the job of England football coach, was arrested by the fraud squad but released after questioning. Also arrested were the club’s CEO, the former owner of the club, a player and an agent. The arrests were part of an ongoing police investigation into corruption, fraud and false accounting.

All of these situations reveal a critical lack of leadership, while some show a disturbing lack of competence, integrity, respect and ability to do the right thing. All of these stories emerged in the space of one month in the UK and a glance at the international media show similar stories about government, institutions and companies throughout the developed world. Is enough being done to tackle the root causes of poor leadership?

What are your thoughts? Should we be re-examining the conduct of our leaders in a more critical light? Do we need a radical new approach to leadership thinking? Is your outlook positive for the future? Or do you think we no longer have any leaders?

Read all of Gill Corkindale’s “Letter from London” posts.

RELATED CONTENT FROM HARVARD BUSINESS:
The Art of Effective Leadership Collection
Bad Leadership: What It Is, How It Happens, Why It Matters (Hardcover)
Harvard Business Review on Corporate Ethics (Paperback)
Lessons Learned Four-Volume Library: Straight Talk from the World’s Top Business Leaders

What are your suggestions for assessing the capabilities of the U.S. Presidential candidates?

The current Presidential primary season has dramatically illustrated the unrealistic expectations that are being placed upon today’s political leaders.

For a second, let’s assume that the three remaining major candidates for President are basically good people, who want to do what they believe is right for our country. Let’s assume that all are intelligent and have no desire to gratuitously offend voters.

Not only are all of their words being scrutinized for the slightest hint of bad intent or stupidity, the words of all their supporters are also being scrutinized. Any deviation from politically correct responses (from either the candidates or their supporters) are being used to indicate that the candidates may well be closet racists or sexists. Any lack of knowledge in answering questions is leaped on to indicate that they may well be incompetents.

No wonder Americans have such a low opinion of political leaders at all levels. Almost no human looks good when being constantly viewed under a microscope.

Our 24/7 press coverage has created an environment where a new story is needed every day. If a substantive story is not available, a trivial story is used to fill up the space. The amount of time spent and the emotional tone of reporters is almost always the same – regardless of the degree of importance of what is being said. America has serious challenges. We need to focus on what really matters to our country – not the latest slip up by a candidate.

My intent is not to use this blog to promote any political candidate. My intent it to help you assess these future leaders and choose the one that you believe can best help our country.
My suggestions for you – as a voter:

• Ignore word games that are being used to trap all three candidates.
• Accept the fact that all three have supporters who may say and do crazy things.
• Assume that all three are decent, intelligent people who want to do what is right for our country.
• Analyze the most significant challenges that will face our country over the next four years.
• Listen to each candidates plan to meet these challenges.
• Choose the candidate that you believe will do the best job.
• Don’t feel a need to crucify the other candidates to prove that yours is superior.

As always, I would love to hear your suggestions for voters in the upcoming U.S. Presidential election. Comments and reflections from readers outside the States are especially welcome!

Have a question you’d like to me to address? You can submit it by either adding a comment to this post or by e-mailing it to askthecoach@hbsp.harvard.edu

Read all of Marshall Goldsmith’s Ask the Coach posts

Marketers are trained to match supply to demand. Everything that consumers need should be available at the right time in the right place at the right price. Coca-Cola’s mantra always has been to be within an arm’s reach of desire. To be out of stock is to lose a sale or, worse, to lose a sale to a competitor.

But marketers also understand that, by using the illusion of scarcity, they can accelerate demand. This false scarcity encourages us to buy sooner and perhaps to buy more than normal.

We saw two excellent examples of this effect this summer with the launches of the iPhone and the seventh Harry Potter book. In both cases, the pre-launch publicity was designed not only to fuel demand but to create the illusion that supplies would be limited. In fact, there were very few supply shortages. In both cases, the marketers anticipated demand levels pretty well.

As the mountains of press coverage and strong opening day sales attest, the scarcity illusion strategy paid off for Apple and Potter’s publishing company. It wasn’t just direct sales of these two products that benefited from the scarcity illusion, however: The heavy crowds drove sales of related products in Apple stores and bookstores during a relatively slow sales month.

But there are risks to using false scarcity as a strategy. First, hype invites heightened scrutiny: Common first version short-comings of the iPhone fueled negative reviews that were then amplified by the blogosphere. Second, some consumers, frustrated by waiting in line may have given up or switched to other alternatives.

Creating the illusion of scarcity is a far different situation than marketers genuinely underestimating demand for a new product. One well-known example of this misstep occurred in 1998, when Volkswagen under-forecast demand for the New Beetle in its launch year. Of course, ramping up production of a car is more challenging than printing an extra run of a book. But after its initial error, VW made some smart decisions to mitigate the damage.

First, the company rewarded their best dealers by making the scarce New Beetles available to them first on preferential terms.

Second, VW factories “fully loaded” the New Beetles with options to maximize the unit margin that VW and the dealers extracted on each vehicle.

Third, VW incented its dealers to stock up on non-scarce cars such as Golfs and Jettas as a quid pro quo for receiving scarce New Beetles. Consumers drawn to VW dealers to look at the New Beetle often ended up buying other VW models more suited to their specific needs. In this way, the scarce product acted as a brand magnet for the entire product line.

As the examples above illustrate, scarcity can be a blessing or a curse. Creating the illusion of scarcity can be a smart marketing strategy. And even if you’re in the unfortunate position of experiencing very real scarcity, there are tactics you can employ to minimize the brand damage and even profit from the error.

What’s your scarcity story? Has your company been caught flatfooted in a scarcity situation or has it successfully manufactured the illusion of scarcity to accelerate demand?

HARVARD BUSINESS ONLINE RECOMMENDS:
Just in Time for the Holidays (HBR Case Study and Commentary)
Smarter Supply Chains (HBR Article Collection)
Welcome to the New World of Merchandising (HBR Article)
The New Beetle (HBS Case Study)

The concepts surrounding the drive to Six Sigma quality are essentially those of statistics and probability. In simple language, these concepts boil down to, “How confident can I be that what I planned to happen actually will happen?” Basically, the concept of Six Sigma deals with measuring and improving how close we come to delivering on what we planned to do. 

Anything we do varies, even if only slightly, from the plan. Since no result can exactly match our intention, we usually think in terms of ranges of acceptability for whatever we plan to do. Those ranges of acceptability (or tolerance limits) respond to the intended use of the product of our labors–the needs and expectations of the customer. 

Here’s an example. Consider how your tolerance limits might be structured to respond to customer expectations in these two instructions: 

Read more »