The first time I dealt with rogue employees, I was absolutely stunned. Very smart people I trusted did something incredibly stupid. I recall shouting at them, "Were you guys smoking dope?" Later, when I uncovered exactly what happened, I realized they were intoxicated, but not on illegal substances--on power.
It's likely that you, like me, foster a company culture that prizes transparency, open doors, and honesty in all interactions. But one day, one of your trusted lieutenants might shock you by doing something extremely ill-advised, maybe even illegal. And if he ends up doing the perp walk, you might end up right behind.
New Jersey Governor Chris Christie's "Bridgegate" scandal (in which his lieutenants allegedly caused a massive traffic jam in Fort Lee, New Jersey, in political retribution against the town's mayor, all allegedly without Christie's knowledge) is very instructive. It certainly gave me some chilling flashbacks.
The assertion is that even if Christie was completely unaware of the specifics, he must have created a culture where his team thought he would approve of their actions. I know from experience that isn't necessarily true. But the fact is that every leader is vulnerable to good people who choose to do bad things that they think are in the organization's best interests.
It happens more than you think. Bad apples are inevitable. When an employee "breaks bad," you'll ultimately realize that there were signs of trouble long before it happened, but you were oblivious to them. Fortunately, by understanding how this happens, you can prevent a good employee from going rogue.
Reason 1: No one cares about your company as much as you do.
Entrepreneurs love their creations, often to the detriment of marriages and other relationships. Love is blind, so you may not see that others don't share your dedication. Your employees may be enamored by a big potential payday in your entrepreneurial vision, but their loyalty can be fleeting. They might be seduced by better opportunities or perhaps their own new ventures. Don't ever assume that even the most dedicated people are 100% aligned with you and your goals.
Reason 2: Humans are fallible.
Presidents, clergy, teachers, and scout leaders--no one is immune to indiscretion. Everyone lies. Otherwise honest people will cheat and even steal. Everyone has secrets. You can't afford to completely trust anyone.
Reason 3: Your employees have personal aspirations.
If you hired A-list, super-smart, self-motivated people--which you did--then you also stacked your company with individuals with all the tools to break bad. That's because hyper-motivated people also tend to love power and authority. They're movers and shakers with long-term aspirations that supersede their current gig with you. Keep in mind that while they're helping you build your empire, they are also accumulating the power base to build theirs. These dueling motivations can lead to very bad decision making by them that could return to excise a chunk of your posterior.
Mind the Gatekeepers
Now that you know what can lead to bad behavior, you can spot the symptoms that indicate you have some issues percolating. Typically, those symptoms will show up in employees who are in the management team that stands between you and the workforce--the gatekeepers. These folks are positioned to control the flow of information and should be especially well monitored.
The "go-to" person in your office will make many decisions about what warrants your attention. But they can also isolate you from key information. In many organizations, gatekeepers become a proxy for you. Although gatekeepers are your most trusted employees, your best policy is to trust but verify.
Never allow military-style hierarchy to set in. Instead, gently and frequently reach into your organization for feedback. Have lunch meetings with people who report through the gatekeepers. Ask them questions and watch their body language. A certain twitch is worth 1,000 words. When gatekeepers know that you come out of the ivory tower with regularity, they will be less effective at trying to hide certain activities.
Identify the Overly Zealous
Ever walk by a conference room and see a standing room only crowd? I'm willing to bet that half the people in most meetings really don't need to be there. There is a certain type of manager who feels they have to be "in-the-know." They will either crash or get themselves invited to meetings just because they see information as currency. They cultivate their visibility so they'll be seen as "influencers." They crave upward mobility and always go the extra mile--which you would normally consider a good thing.
But these are also the people who will see competitive threats to their "power" everywhere they look. They can be troublemakers and agitators as a result. In my experience, these types of employees have been one of the biggest sources of problems. Make it a habit to drop into those full conference rooms and ask every person why they're present. You will quickly identify the ones who have no real business being there--and you'll also get a list of people to watch more closely.
Monitor the Stress Level
Many bad-apple events can be traced to stress at work or home. A person with financial troubles is more likely to steal or embezzle. In the workplace, stress is viral. The pressure to make revenue targets can lead people to dark places. A salesperson might ask a friendly client to place an order, which they can return later (wink, wink). A CFO might take liberties with the books, assuming he can fix it next quarter.
Keep in mind, as the leader, that you are the single biggest source of stress in the company. Your own stress as an overachiever will profoundly affect your team, and perhaps inadvertently create an environment that drives people to bad judgment in an attempt to please you. Be mindful of what you're putting out to your team.
Being suspicious 24/7 is exhausting. I'm not suggesting that's the right solution. But every C-level executive has to assume the responsibility of Chief Cynic. Rather than let this turn you into a paranoid control fiend, rely on your team to be your eyes and ears.
Often, lower-level employees will observe irregularities long before you do. Rarely will they come forward, for fear of their job. Large organizations have formal whistleblower procedures that allow any employee to report anonymously. Every company should put this practice in place and regularly remind employees how to use it. This simple process just might allow you to solve a problem before it becomes unsolvable.