Sunday, March 2, 2014

Why Do Leaders Lie?

This week it was learned that General Motors had known about a faulty ignition switch problem for at least a decade. Yet, their leaders did not sound an alarm to consumers. In a written statement issued by GM, the company acknowledges that 13 deaths and 31 crashes are linked to an ignition switch problem in certain car models in which the ignition switch inadvertently moves to the "off" position and turns off the engine. In those instances, many electrical components in the affected vehicles wouldn't work including airbags, which wouldn't deploy in crashes.

This is a serious problem that has not only resulted in the unnecessary and tragic deaths of 13 people, but it calls into question the integrity of GM’s leadership. Why did they withhold this information from consumers and dealers? If the leadership at GM did not tell us the truth, they lied. It’s that simple. There’s no shades of gray when it comes to life and death issues. Sure, they can settle lawsuits and buy the silence of grieving families. But, the fact is leaders lied. It’s that simple.

When human lives are at stake and the leadership of a company knows they have a faulty problem with their product, leaders have a sacred responsibility to come forward and warn consumers. When leaders do not come forward and issue a warning to unsuspecting consumers, it is a criminal act and they should be charged, convicted and punished harshly to send a message that society will not tolerate liars whose silence or misleading statements cause deaths.

It has become all too convenient for leaders to lie. Recently, consumers were sickened by contaminated Foster Farms chicken. Their leaders did not come forward and accept responsibility until they were pressured by consumer organizations and retailers. Why? What were Foster Farms leaders afraid of?

Toyota’s leadership denied any responsibility related to its faulty accelerator problems in 2009.  Its chairman was shamed before the United States Congress and Toyota suffered major losses because of its credibility gap and deceptive practices. Ironically, despite jury convictions holding Toyota responsible for the sticky accelerator problems, the U.S. Department of Transportation issued a report stating most of the crashes were the fault of drivers who stepped on the accelerator instead of the brake. What rubbish! Tell that to the widow of the California Highway Patrol officer and his passengers who died in a fiery crash caused by the faulty Lexus accelerator. Is anyone with a brain suggesting a CHP officer doesn’t know how to tell the difference between the accelerator and the brake?  So, this is the nonsense companies and government agencies are feeding us; and, they expect us to believe them!  No wonder consumers have lost faith and trust in government and corporations.

It seems the system is full of liars who will do anything and say anything to cover their rear. But why? What’s wrong with coming clean and telling people the truth? No one is suggesting that a company needs to admit guilt. That’s why we have courts. But, certainly, when the data suggests you have a problem with a product, you need to alert your consumers. It’s the only way you will maintain their trust and earn their respect. But, corporate leaders have been taught by their shareholders and lawyers to be silent, say nothing, don’t admit to anything that could negatively impact our quarterly earnings. This is the low level to which corporate leadership has sunk. Had it been the daughter of GM’s president who was killed because her ignition switch clicked off, I wonder how fast GM’s engineers would have identified and solved the problem?

Now, GM has serious credibility problems with consumers. Let me put it in terms the bean-counters and leaders at GM can relate to. The bottom line question that GM should be worried about it this: “What parent would ever buy their teenager a GM product knowing its leadership withheld data that contributed to the death of 13 people?” The answer is no one!

Sunday, December 1, 2013

Is Employee Engagement Worth All the Effort?

by Tom Hinton

It’s no coincidence that most of the best-in-class companies also have fiercely loyal and dedicated workforces. When top-performing CEOs from companies like Apple, Amazon, Southwest, Starbucks and Berkshire Hathaway talk about why their companies are most admired, they always cite their people and, specifically, employee engagement as one of the keys to their profitability and success.

What exactly is Employee Engagement? I define it as a person’s emotional connection to their company. Twenty years ago, it was enough to merely pay your employees a fair wage and provide good working conditions. Today, however, things have changed in the workplace. Your best and brightest employees have choices. They won’t settle for the status quo. This is why your company and its management team must challenge employees with meaningful goals and assignments. Leaders must set the bar high with a corporate visions that inspire employees and tasks them to help customers use the company’s products and services to make the world a better place. This is how the era of Employee Engagement is defined.
How can your company or organization successfully engage its employees? Having learned by trial and error over the past 15 years, here are three keys steps I recommend:

1.     Take the Pulse of your Workforce. There’s no point in running a race if you don’t know where the starting point and finish line are, right? So, it’s imperative that you assess how your employees are feeling about their company, their work, and their ability to contribute to its success in meaningful ways. We always conduct an in-depth assessment that includes a cross-section of employees as all levels of the company. What we learn is invaluable and helps leaders chart their course for innovation, improvement and implementing a strategy for long-term growth and customer loyalty.

2.     Fix What Doesn’t Work and Fix it Fast!  Once you’ve completed the assessment phase, you will know exactly what is working and what is broken in your organization. Trust me, your employees will tell you. The next step is to challenge your management team to fix it – and fix it fast! The key here is to demonstrate forward progress. Don’t be surprised if your management team resists. Most managers are not visionaries and they are comfortable with the status quo. So, be prepared to kick a few butts and shake things up in order to demonstrate you mean business! Effective leaders understand the status quo is a fatal flaw in any organization.  This step requires courage and conviction.             

If your company has been stuck in neutral for some time, your employees will be favorably impressed by any significant action you take to implement positive changes that help them do a better job and get better results. This is why it’s important to prioritize the things that you need to fix, change or improve within each department and business unit. Basically, you have 90 days to act if you want to have any credibility as a leader.  People will embrace your new vision, but only if they see actions after words.  Remember the words of Ray Kroc, who put McDonald’s on the global map. Kroc said, “People are like bananas. They’re either green and ripening or yellow and rotting!” You always need to keep your people greening.

3.     Set the Bar High.  Most companies under-challenge their employees. As a leader, you need to set the bar high by inspiring your people with a vision that challenges them to be the best. This means soliciting their ideas, asking them to make a commitment to be the best, and incentivizing them to reach that bar. Then, you need to give them the tools and resources necessary to accomplish that vision. Finally, as the leader, you must always be the “voice of success” and be relentless in your pursuit of your vision. This is how you convert followers into believers, and believers into evangelists.                                                     

As your employees make progress and achieve various levels of success, be sure to reward and recognize them. Salute and praise your top performers in each department. Invite them to share their success stories with others in the company including other divisions. Create a culture of “success and celebration” within your organization that motivates your employees to raise their performance levels and inspires them to set the bar even higher while achieving new records for sales, productivity, innovation and cost savings. 

This is the stuff success is made of. This is how good companies become great, and great companies become legendary. Employee Engagement is a key part of every company’s success formula.

About the Author:  Tom Hinton is president of the American Consumer Council. For more information, please contact: 

Thursday, November 21, 2013

Consumers Feeling So-So as 2013 Winds Down

It’s been a so-so year for American consumers as 2013 winds down. While consumers are less pessimistic in November about their economic prospects, the impact of October’s partial government shutdown, the lack of any meaningful accomplishments by the Congress, and the embarrassing mislaunch of the ObamaCare website all contributed to a ho-hum reaction from consumers.

Bloomberg’s Christopher Wellisz ( reports that the gap between positive and negative expectations for the economy shrank to minus 14 from a two-year low of minus 31 in October, according to data from the Bloomberg Consumer Comfort Index. That's positive news.

Thomas Hinton of the American Consumer Council, a non-profit consumer education organization, stated, “We are basically back to square one in terms of  consumer sentiment prior to the government shutdown.”  Hinton added, “It’s not surprising that consumers have low expectations for government to accomplish anything significant this year. This will not bode well for incumbents in 2014 if the lack of progress continues.”

On a positive note, the American Consumer Council expects 2013 consumer holiday spending to be near last year’s spending levels as a result of improved economic conditions, pent-up demand for necessary consumer items and an aggressive retail campaign to lure shoppers into stores before Thanksgiving. ACC also expects online holiday spending to jump by 7% over 2012 according member responses.

The American Consumer Council is a non-profit consumer education organization with over 142,000 members and 44 state consumer councils. For information, visit:

Thursday, October 10, 2013

ACC Calls on Procter & Gamble and Dopps to Strengthen Safety Features of Tide Pods

The American Consumer Council (ACC) has called upon its members to contact The Procter & Gamble Company and Dopps, the seller and manufacturer of Tide Pods, and demand they strengthen the safety features of this product. 

According to complaints from ACC members and a recent ABC News report, to some kids, the bright colors and bite-size packaging of single-doss packets of laundry detergent look too much like candy. A large number of young children have consumed the Tide Pods and suffered serious repercussions including severe nausea, vomiting and diarrhea.

Thomas Hinton, president of the American Consumer Council, said, “While Dopps has taken several steps to address product safety concerns, it’s not enough. Too many children are still accessing this product and suffering serious physical consequences.  We’re asking P&G and Dopps to re-examine their packaging and hamper the product's ease-of-access so children cannot open it so quickly.”  

Hinton added, “It resembles a candy jar and that attracts youngsters to  eat it. P&G and Dopps need to move quickly to change the features and safety packaging of Tide Pods .”

Wednesday, October 2, 2013

American Consumer Council Applauds Credit Unions for Helping Federal Employees

The American Consumer Council (ACC) is giving kudos to credit unions across the nation for their support of furloughed federal employees during the government shutdown.

ACC specifically recognized credit unions such as Fort Knox Federal Credit Union for offering financial assistance to local military, Department of Defense employees and contractors directly affected by the federal government shutdown. Fort Knox FCU is offering to cover their lost pay through an interest free loan. 

ACC's president Thomas Hinton stated, "At a time when so many consumers are negatively affected by the irresponsible actions of the Congress, it's good to know that credit unions are stepping up to help their members through tough times and save the day!"

ACC Meets NCUA Requirements for Association SEGs

The American Consumer Council (ACC) has received an independent legal opinion stating that ACC meets the National Credit Union Administration's (NCUA) "totality of circumstances" test which is required in order to be approved as an associational SEG (Select Employer Group).

The independent legal opinion was requested by a large federally-chartered credit union and rendered by the San Diego law firm of Selzter Caplan McMahon Vitek on October 1st.

In essence, the Legal Opinion states that ACC meets the seven criteria set forth in the Federal Credit Union Act, Section 109(b) that pertains to associations and the requirements necessary to affiliate with a federally-chartered credit union. 

Copies of the Legal Opinion may be obtained by contacting ACC's media office at: 

Friday, September 13, 2013

Have We Forgotten About the Plight of Consumers Hurt in the Recession?

Here's a powerful article that appears in Fortune magazine by Sheila Bair, the former head of the FDIC. We recommend you read it because we think her points are right on and problems still persist!

Thomas Hinton,
President & CEO
American Consumer Council
By Sheila Bair
I told myself I wasn't going to do a "Lehman" column given the media frenzy over this month's five-year anniversary of that institution's bankruptcy. But in researching a new book I am writing for young adults about the 2008 financial crisis, I have been uncomfortably reminded of the hardship so many families encountered because of the crisis, particularly their kids.
Their plight has been largely forgotten in the power politics that have overcome financial reform. It's all about winners and losers, with regulators and reform advocates pitted against a powerful industry lobbying machine, oiled by political money and the grease of revolving door jobs. The objective of protecting the public from another recession brought on by an unstable financial sector seems lost in the Washington shuffle.
So let me recount the heartbreaking memories of the families I have interviewed. They bear tragic similarities. Their problems usually started with a steeply resetting mortgage payment, or job loss or cutback, frequently combined with an unexpected health problem not covered by insurance. Whatever the catalyst, it is almost always followed by high levels of stress for the family, sleepless nights for parents and kids, deteriorating grades at school, lost hope as savings are depleted, and finally the loss of a home. The kids give up their rooms, their pets, their schools, their neighborhoods, and will always live with the traumatic memories of their forced dislocation.
To be sure, many of the parents I have interviewed bear some responsibility for their troubles. As home prices escalated, they repeatedly refinanced their houses to pull out cash. When the housing market turned, they were left with unaffordable mortgage debt, which far exceeded the value of their homes. But these cash-out refis were not always done to pay for fancy vacations or flat screen TVs as apologists for Wall Street would have you believe. Rather, more typically, the money was used to pay for college tuition, medical bills, or simply to help make ends meet.
Several of the families I interviewed never participated in the housing craze. They had traditional 30-year, fixed rate mortgages that they could no longer pay when they lost their jobs or suffered pay cuts. They did nothing wrong except live in a country where we temporarily deluded ourselves into thinking that a "self-regulating" financial sector tethered to a housing asset bubble could provide a solid foundation for prosperity.
These families are now clawing their way back. Many are living in apartments or spartan rental homes. Most have regained employment, but at significantly lower wages. Several have managed to start rebuilding their savings. Their kids have grown to accept getting by with less. Some have foregone college, as their parents depleted their college accounts in a desperate attempt to hold onto their homes. Instead, they join the military or try to find work in a teen labor force which has a 24% unemployment rate. Others go to college by borrowing heavily. They graduate, then move back home, taking a low-paying job. As young people, they should be filled with hope and optimism. Instead, they confront limited job opportunities, reduced standards of living, and mountains of student debt.
Their lives, like so many across the country, are improving only after years of personal struggle. Protecting them from another crisis should be regulators' highest priority.
Some say that the people who participated in the bailouts five years ago (and I was one) are "heroes" because we "saved the system". But it didn't take heroism to throw trillions of government cash at big financial institutions. The true heroes are those regulators who can show the courage to tame the system against the fierce lobbying of the very institutions that benefited from the government's largesse.
As the Lehman bankruptcy assumes its place in the annals of our financial history, it saddens me to think how historians will characterize the timid reform effort that has followed so far. With the Dodd-Frank financial reform law barely one-third implemented, regulators still have the opportunity to make the post-Lehman era their finest hour. I hope they rise to the occasion.
Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation from 2006 to 2011, is the author of Bull by the Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself released in paperback this month