10 Corporate Blunders That Wouldn't Have Happened If Companies Listened To Their Employees

 

Blake Morgan | Forbes

Posted: 2/05/18

 
 
 
10 Corporate Blunders That Wouldn't Have Happened If Companies Listened To Their Employees

In many cases, today’s employees are like the canaries that miners used to send ahead to check for dangerous gases in the mines. If the canary didn’t make it back alive, the miners took it as a warning to leave immediately. In the business world, employees are often the ones on the front lines who have the potential to warn their employers of any problems that might arise and be deadly for the company. But it’s up to the company to actually listen to its employees and head their warning cries. Here are 10 blunders that could have been avoided if companies had just listened to their employees.

Equifax

Months before the credit company’s data breach that compromised the personal data of 145 million Americans, a security researcher warned the company that it was vulnerable to a large-scale attack. The researcher scanned servers and public-facing websites and discovered customer personal information was easily accessible. Equifax didn’t take any action, however, until after the hack took place.

Wells Fargo

Wells Fargo came under fire for widespread fraudulent accounts in 2016, but an employee tried to alert the CEO of the issue in 2007. The now-former employee was transferred after warning supervisors about unethical behavior happening throughout his region and even warned that the illegal sales practices could lead to fraud, lawsuits and regulatory sanctions, all of which have recently hit the bank.

General Motors

GM was forced to recall more than 3 million cars in 2014 for ignition problems, but employees within the company knew about the issue in 2005, when an employee sent an email warning that ignition parts were faulty. Executives didn’t take action until the issue was noticed by customers.

Target

Two months before Target’s massive data breach in 2014, when hackers stole 40 million credit card numbers, employees advised executives to review the security of its payment card system. One intelligence analyst recommended doing a thorough security review to see how susceptible the system was to malware, but the request was denied.

Toyota

More than three years before Toyota faced massive safety issues and recalls, employees wrote a memo to the CEO warning him that cost-cutting measures were impacting the safety of the cars. Employees even connected early issues with acceleration and brake systems to five deaths and used that to warn executives, but the cries went unnoticed and more than 8 million cars were recalled.

BP

BP’s historic oil spill in the Gulf Coast in 2010 — the largest oil spill in U.S. history — could have been prevented, employees warned. An employee who worked on the well warned BP officials that their plan to expand the well increased the risk of leaks. He even questioned their methods and asked them to change the process, but executives didn’t listen. In the end, the weakened well leaked more than 4.9 million barrels of oil.

Cadbury

Kraft’s giant takeover of Cadbury in 2010 for $19 billion transformed the brand from a family-owned British company to another arm of an American corporation that angered customers and changed the corporate culture. Before the takeover, employees warned leaders that the cultural differences between the two companies were too great and would affect the merger. Their warnings turned out to be true, as Cadbury’s unique culture was swallowed up by Kraft’s.

Samsung

In one of the most disastrous product rollouts in recent years, Samsung’s Galaxy Note 7 phone started exploding and burning within a few days of its release, leading to massive recalls. The phone was combustible because too many pieces were crammed into the aggressive design. Employees tried to warn Samsung that the design was risky, but the company continued to introduce the product, with terrible results.

Southern California Gas Co.

In October 2015, a gas well in California started a four-month-long leak that released more than 100,000 metric tons of methane and displaced 8,300 households. Before the leak, a manager of the company warned that continuing injections into its natural gas storage facility could lead to a major disaster. The warnings were ignored as gas regulators approved the injections, which led to the largest release of natural gas in U.S. history.

Takata

Employees on the Takata manufacturing line noticed serious safety defects in the airbags and emailed executives suggesting they conduct a safety audit. Instead of listening to employees right away, Takata continued to release defective airbags that have been linked to more than 100 injuries around the world and have since been recalled in huge numbers.

 
 

 

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