With the unfolding drama of the celebrity college admissions scandal it is almost laughably unbelievable to see the lengths that these celebrity parents would stoop to in order to get their children into the colleges that they desired. Photo-shopped faces, fabricated sports careers, and a tangled web of corruption and fraud between college employees, third party testing companies, and other parties should serve as a reminder that the risk of fraud exists in places that you might not expect.

In his book, The Black Swan: The Impact of the Highly Improbable, Nassim Taleb describes the powerful effects of outlier events that, due to their rare and unpredictable nature, are extremely hard to predict. While the celebrity admissions scandal may not rise to the level of the extreme events discussed in Taleb's book, I think that for top administrators at the schools in question these recent scandals would probably be described as powerful, rare, and unpredictable - in other words: Black Swan events.

In Taleb's book he forwards the idea that due to the extremely difficult (impossible?) task of predicting Black Swan events, one should instead build robust systems that protect from the deleterious effects of these events. I believe that in regard to this current scandal, a similar lesson emerges: all organizational leaders, and specifically school administrators in this instance, would be well advised to go above and beyond to protect their organizations from the unexpected.

Per the initial reports, the scandal was eventually uncovered through a tip provided while investigators were working a different case. While this again underscores the fact that tips are far and away the most common way that fraud is detected, I'm left wondering how much sooner this tangled web of corruption would have been uncovered if the colleges had been informed by someone on the inside of this massive fraud, instead of having investigators stumble upon the crime.

While most of us operate under the assumption that are organizations are at no great risk of fraud, corruption, sexual harassment, serious workplace safety issues, or other significant business risks, I believe that all organizational leaders would be wise to heed Taleb's advice and prepare as best as possible for the Black Swan by implementing an anonymous tip reporting system at their organization, and I am by no means alone in this view. Whistle-blowing mechanisms are a universally recommended best practice backed by copious amounts of independent research including 20+ years of research by the largest anti-fraud organization in the world.

If you're an organizational leader that wants to go above and beyond in the protection of your organization, you need an anonymous tip reporting system. While there is no guarantee that an anonymous tip reporting system would have stopped the college admissions scandal, all of the evidence suggests that there is a high chance that it could have. Don't leave your organization defenseless, open your ears to the Black Swan of the absurd - as the old adage goes: better safe than sorry.

  • Zach Clark, CPA, CFE

Updated: Mar 13, 2019

Studies show that in the workplace, there is at least one thing that women disproportionately receive much more of than their male co-workers: sexual harassment.

In their 2018 annual Poverty and Inequality special report, the Stanford Center on Poverty & Inequality notes that "women are subjected to the most frequent and severe forms of sexual harassment", with a third of all working women, age 25-26, reporting that they have been sexually harassed in the workplace. And, as one would expect, the research shows that the effects of this harassment are severe.

The researchers found that those workers who suffered harassment endured physical and psychological consequences including sleep problems, increased rates of anxiety, depression, and post-traumatic stress disorder, as well as diminished self-esteem and self-confidence. And the effects of harassment were not limited to these physical and psychological issues.

80% of women in the study reported that in response to harassment they made the extremely difficult decision to change their primary job, compared to only 3% that filed a lawsuit. And, with many respondents reporting that they suffered ostracism and career stagnation as a result of staying with their employer and making a report, it is not difficult to see why so many women would simply choose to change their employer in order to resolve the situation.

While one might draw from these results, as have lawmakers around the country, that we simply need to increase the amount of sexual harassment training in order to reduce harassment, this is a flawed approach, as there is a significant amount of evidence that exists indicating that training alone is simply not enough.

In the article "Companies not doing enough to combat sexual harassment" David Ballard, the Director of the American Psychological Association's Center for Organizational Excellence notes that: "we know from psychological science that relying solely on mandated training designed primarily to limit the organization's legal liability is unlikely to be effective".

At Open Ears we have heard this message loud and clear. We know that the time for real change is now, and we have designed our online anonymous reporting tools to empower and protect women in the workforce.

By giving your workforce the ability to make anonymous tips to your organization's leadership not only do you empower your employees to stop current harassment, but you also proactively protect them from future incidents in a real and tangible way that cannot be provided by training alone.

Show your employees that you care, show your employees that you take harassment seriously, and show them that your ears are open to their concerns.

Article Sources:

1. Stanford Center on Poverty & Inequality - State of the Union (Special Issue 2018) https://inequality.stanford.edu/publications/pathway/state-union-2018

2. Companies Not Doing Enough to Combat Sexual Harassment: Survey https://health.usnews.com/health-care/articles/2018-05-15/companies-not-doing-enough-to-combat-sexual-harassment-survey

  • Zach Clark, CPA, CFE

In her article "The Employer-Surveillance State" journalist Ellen Ruppel Shell notes that while workplace surveillance is becoming more common, more sophisticated, and more economical - more isn't always better. Shell notes that various studies indicate that workplace surveillance can "increase workplace stress, promote worker alienation, lower job satisfaction, and convey the perception that the quantity of work one generates is more important than its quality". Some studies even show that monitored employees can have "lower self-esteem and are actually less productive".

To me, these results are not surprising. When people are put under pressure they often perform worse - a phenomenon known as "choking". And, while the steady low-level stress incurred due to continuous monitoring may not result in absolute performance breakdown, the knowledge that they are constantly being watched can slowly choke out your employees' confidence and motivation.

Monitoring your business and your workforce is of the utmost importance. But how you do that monitoring is extremely important. At Open Ears we offer anonymous tip reporting services that allow your employees to become active participants in the monitoring process not passive subjects. By allowing your employees to actively participate in the monitoring of your workforce you can increase transparency in your business, and you don't have to choke out your staff to do it.

Source: The Employer-Surveillance State - Ellen Ruppel Shell. https://www.theatlantic.com/business/archive/2018/10/employee-surveillance/568159/

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