When Luxury Meets Reality: How LVMH’s Labor Crisis Exposes Modern Business Vulnerabilities

The luxury fashion industry has always been built on exclusivity, craftsmanship, and premium positioning. But beneath the glossy surface of €3,000 handbags and €5,000 cashmere jackets lies a reality that’s forcing executives across industries to reconsider fundamental questions about business practices, reputation management, and operational risk.

LVMH’s ongoing labor exploitation crisis in Italy offers a masterclass in how seemingly distant supply chain decisions can rapidly escalate into existential business threats. With two subsidiaries—Dior and Loro Piana—placed under court administration within 13 months, the world’s largest luxury conglomerate has seen its market value decline 22% while ceding its position as the most valuable luxury company to Hermès.

The story isn’t just about fashion. It’s about how modern business practices, regulatory evolution, and stakeholder expectations are colliding to create new categories of enterprise risk that traditional management approaches struggle to address.

The Anatomy of Modern Business Vulnerability

What makes LVMH’s crisis particularly instructive is how it reveals the hidden risks embedded in common business practices. The company’s Italian operations relied on a multi-layered outsourcing model that many industries would recognize: primary contractors who subcontract to specialized facilities, creating cost advantages through competitive bidding and operational flexibility.

On paper, this approach delivered exactly what executives wanted: handbags produced for €53 that could retail for €2,600, generating profit margins exceeding 4,800%. The outsourcing structure provided legal distance from manufacturing operations while maintaining cost efficiency that enabled luxury pricing strategies.

But this same structure created what risk management experts now call “systemic opacity”—organizational blind spots that amplified rather than mitigated operational risks. When Milan prosecutors investigated, they found workers sleeping in factories for “24-hour availability,” safety equipment removed to increase productivity, and wages as low as €2-3 per hour in facilities producing premium luxury goods.

The revelations forced uncomfortable questions: How much operational control can companies surrender while maintaining accountability for outcomes? And more fundamentally: What constitutes acceptable distance between brand values and production realities?

Reputation in the Age of Transparency

LVMH’s experience illustrates how reputational risk has evolved from episodic crisis management to continuous stakeholder relationship management. The luxury sector has historically operated on brand mystique—the less consumers knew about production realities, the more they could project aspirational values onto premium products.

That dynamic is fundamentally changing. Social media amplification, investigative journalism, and regulatory transparency requirements have created what scholars call “radical accountability”—environments where operational decisions across global supply chains can rapidly become public brand liabilities.

The financial impact has been immediate and measurable. LVMH’s first-half 2025 results showed net profit declining 22% and Fashion & Leather Goods sales falling 9%, with management specifically citing “labor scandals” as a key performance factor alongside economic headwinds.

But beyond immediate financial metrics, the crisis has damaged something more valuable: the aspirational premium that justifies luxury pricing. Consumer forums reveal deep disillusionment with the disconnect between premium pricing and production realities. When Loro Piana customers discover their €5,000 jackets were produced under exploitative conditions for €118, the entire value proposition becomes questionable.

The lesson extends well beyond luxury goods: In interconnected markets, operational practices anywhere in your value chain can rapidly become brand positioning everywhere in your market.

Risk Management’s Evolution

Traditional enterprise risk management focused on direct operational risks—supply disruptions, quality failures, regulatory compliance within your immediate operations. LVMH’s crisis demonstrates how this approach has become inadequate for modern business complexity.

The company conducted 4,066 audits on 3,690 suppliers in 2024, implementing extensive monitoring systems and compliance programs. Yet systematic labor exploitation continued across multiple subsidiaries, suggesting that conventional audit-based risk management may be structurally insufficient for complex global operations.

The problem isn’t execution—it’s conceptual. When you design business models around cost optimization through operational distance, traditional risk management becomes reactive rather than preventive. You’re essentially auditing your way around fundamental structural vulnerabilities rather than addressing root causes.

Modern risk management requires rethinking the relationship between business model design and stakeholder accountability. Companies can no longer treat supply chain partners as arm’s-length vendors whose practices don’t reflect corporate values. Every outsourcing decision is now a brand positioning decision.

The Change Imperative

LVMH’s response reveals both the scope of required change and the difficulties in implementing it. The company has committed to accelerated vertical integration across multiple brands, enhanced supplier monitoring systems, and new compliance frameworks. But these changes require fundamental operational restructuring that will pressure profit margins while regulatory penalties await companies that delay reform.

The broader challenge is that incremental improvements to existing models may be insufficient. The EU’s Corporate Sustainability Due Diligence Directive, taking effect 2027-2029, requires companies to implement mandatory human rights due diligence across supply chains, with penalties reaching 5% of global revenue for serious breaches.

This represents a fundamental shift from voluntary corporate social responsibility to legally mandated operational accountability. Companies across industries need to evaluate whether their current business models can survive in regulatory environments where supply chain practices carry direct legal and financial liability.

Strategic Implications for Modern Business

LVMH’s crisis offers three critical lessons for executives across industries:

First, competitive advantages built on operational opacity are increasingly unsustainable. Cost advantages achieved through complex outsourcing may create short-term profit margins but long-term reputational and regulatory vulnerabilities that ultimately destroy shareholder value.

Second, stakeholder expectations have fundamentally shifted. Consumers, investors, and regulators increasingly expect alignment between corporate values and operational practices across entire value chains. The days of brand positioning divorced from production realities are ending.

Third, early action on operational ethics creates competitive advantages. While LVMH faces regulatory scrutiny and market share losses, competitors who proactively address supply chain transparency and worker treatment can gain market position and regulatory credibility.

Executive Action Plan: From Crisis to Competitive Advantage

LVMH’s crisis provides a roadmap for proactive leadership. Here’s your 90-day-to-3-year action framework:

Phase 1: Immediate Assessment (0-90 Days)

Supply Chain Reality Check

  • Map complete supplier network—every layer, every subcontractor
  • Calculate operational distance: How many degrees of separation between your brand and actual workers?
  • Identify blind spots: What percentage of your supply chain can you monitor in real-time?
  • Document cost structures: Where do your biggest margins come from and why?

Regulatory Risk Assessment

  • Review incoming regulations: EU due diligence laws, state transparency requirements
  • Calculate financial exposure: Penalties as percentage of revenue, not just dollar amounts
  • Identify liability gaps: Which current practices could become illegal under new frameworks?
  • Benchmark competitor vulnerabilities: Who else is exposed and how are they responding?

Brand Position Stress Test

  • Compare public values with documented supplier practices
  • Run transparency scenarios: How would customers react to full operational disclosure?
  • Quantify reputation risk: Current brand premium versus potential reputational damage
  • Test stakeholder reactions: Survey key customers, investors, employees on operational priorities

Phase 2: Strategic Restructuring (3-12 Months)

Redesign Supplier Architecture

  • Shift from cost-only to values-aligned supplier selection
  • Replace audit-based monitoring with direct operational oversight
  • Launch supplier development programs focused on practice improvement
  • Establish supplier scorecard including labor, environmental, and governance metrics

Integrate ESG into Business Operations

  • Link supply chain accountability to executive compensation
  • Create cross-functional teams: procurement + legal + brand + risk management
  • Build early warning systems for regulatory and reputational threats
  • Establish monthly executive reviews of operational vs. brand alignment

Build Proactive Communication Systems

  • Develop transparency-first communication strategies
  • Create regular stakeholder reporting on operational improvements
  • Establish crisis protocols emphasizing accountability over deflection
  • Train leadership team on integrated stakeholder management

Phase 3: Long-Term Competitive Positioning (1-3 Years)

Business Model Evolution

  • Evaluate outsourcing sustainability under emerging regulatory frameworks
  • Consider strategic vertical integration where brand reputation requires operational control
  • Design competitive strategies using transparency as market differentiator
  • Restructure profit models to account for true cost of responsible operations

Industry Leadership Development

  • Position company as operational practice standard-setter
  • Use accountability as premium positioning tool
  • Build regulatory partnerships as solution provider rather than enforcement target
  • Create industry coalitions around best practices

Measurement and Continuous Improvement

  • Establish new KPIs: supplier practice metrics alongside traditional cost/quality measures
  • Monitor regulatory landscape changes and compliance costs across all markets
  • Track brand sentiment specifically related to operational transparency
  • Implement board-level oversight of supply chain and stakeholder risks

The New Business Reality

The luxury industry’s labor exploitation crisis isn’t really about luxury—it’s about how global business practices are adapting to new stakeholder expectations, regulatory requirements, and transparency demands. Companies across industries outsource operations, optimize costs through complex supplier relationships, and maintain brand positions that may not fully reflect operational realities.

The question isn’t whether your industry will face similar scrutiny—it’s whether you’ll be prepared when it arrives. The executives who act proactively on these action steps will create sustainable competitive advantages, while those who wait for regulatory pressure may find themselves managing crisis rather than leading change.

LVMH’s experience suggests that companies who delay addressing these vulnerabilities risk facing regulatory intervention, market share losses, and fundamental business model disruption. But organizations that implement systematic operational alignment with stakeholder values across their entire value chains can turn transparency and accountability from threats into strategic assets.

The luxury industry’s reckoning may be just the beginning. The real question is: What will your leadership response look like?

This analysis draws from extensive reporting on LVMH’s Italian labor crisis, including court documents, regulatory filings, and industry analysis from Business of Fashion, CNN, Fortune, and other sources documenting the systematic nature of luxury supply chain vulnerabilities and regulatory responses.

From Bat Bites to Brand Gold: What Ozzy Osbourne Teaches Marketers About Brand Risk and Crisis Management

Those who know me know my career #1 was in brand marketing, where I worked for the now defuct FUNimation Entertainment. That early career planted the seeds for my knowledge about how people risk impacts an organizations greatest public asset, its brand and reputation. Those who know me a little bit better also know I’m a passionate metal head. When I’m not educating CEOs, you can find me at a rock concert or festival. So, of course, the death of Ozzy The Prince of Darkness hit me hard yesterday.

One of the reasons I admire Ozzy so much is he spent his time on this earth proving that authentic brand management can transform any scandal into competitive advantage. While most brands panic at the first sign of controversy, Ozzy Osbourne built a legendary career by embracing chaos, owning mistakes, and turning crises into cultural currency. His journey from Black Sabbath’s fired frontman to beloved family patriarch offers modern marketers a masterclass in authentic crisis navigation that’s more relevant than ever in our polarized, social media-driven world.

Behind every legendary Ozzy moment was Sharon Osbourne’s strategic genius—a woman who understood that crisis could become currency if handled with authenticity, patience, and long-term vision. Their approach influenced not just music industry practices but broader celebrity brand management, proving that genuine responses consistently outperform manufactured messaging. From the infamous bat-biting incident to reality TV transformation, the Osbourne crisis management model offers actionable insights for any brand willing to prioritize authenticity over perfection.

The accidental genius of turning scandals into brand stories

March 27, 1981—CBS Records boardroom, Los Angeles. Ozzy Osbourne, heavily intoxicated on brandy, grew bored during a sales convention meeting promoting his debut solo album. In front of shocked executives, he bit the heads off two white doves and spit them onto the conference table. CBS immediately threw him out, declaring he’d “never work for them again.”

Most artists would have panicked. Sharon Osbourne saw opportunity.

“Sharon knew immediately that she had an opportunity here,” bassist Rudy Sarzo witnessed firsthand. “She contacted our publicist and she spun it. She spun the ‘myth’ that it is today. I saw it happen, right in front of my eyes: her getting on the phone and saying, ‘Hey, listen, this happened. Let’s make a story out of this.'”

The result? Album sales surged immediately. The dove incident didn’t damage Ozzy’s career—it launched his solo success and established his “Prince of Darkness” persona. Sharon had discovered something most brands still struggle to understand: authentic controversy, properly managed, creates deeper connection than safe messaging ever could.

So perhaps the interim Astronomer CEO was right, terrible how it came about – but Astronomer is now a household name IF they identify the Critical Opportunity.

Patterns = Brand Pillars

This pattern would repeat throughout Ozzy’s career, most famously with the January 20, 1982 bat-biting incident in Des Moines, Iowa. When 17-year-old fan Mark Neal threw a dead bat onto the stage, Ozzy mistook it for a rubber prop and bit its head off, requiring three weeks of nightly rabies shots. Rather than attempting damage control, Sharon again transformed potential disaster into legendary brand mythology. Today, bat imagery generates millions in merchandise revenue and remains Ozzy’s most recognizable symbol.

Modern Brand Risk Lesson: Your brand’s most memorable moments often emerge from unplanned authenticity, not carefully crafted campaigns. The key is having systems in place to recognize opportunity within crisis and respond strategically rather than defensively.

Strategic authenticity beats manufactured perfection every time

1982 was the first year I became aware of Ozzy as an artist. Why? He peed on a monument in my hometown of San Antonio, Texas. The February 19, 1982 Alamo incident perfectly demonstrates how authentic long-term reputation building outperforms immediate damage control. While wearing Sharon’s green dress during a drinking binge, Ozzy urinated on the Alamo Cenotaph—the 60-foot memorial honoring fallen defenders. He was arrested for public intoxication and banned from all San Antonio city-owned facilities for 10 years.

Sharon’s strategy was revolutionary for its patience. Instead of immediate defensive messaging, she allowed the initial scandal to develop naturally. Then, she orchestrated a systematic redemption campaign: a formal 1992 public apology to Mayor Nelson Wolff, a $10,000 donation to the Daughters of the Republic of Texas, and ultimately a 2015 return with son Jack for a History Channel documentary demonstrating genuine education about the site’s significance.

The results speak to the power of authentic redemption. By 2025, even the Alamo acknowledged “Ozzy Osbourne’s journey from regret to reconciliation.” What could have been career-ending controversy became a masterclass in genuine accountability and transformation.

This approach proved crucial again during Ozzy’s darkest moment—the September 2, 1989 incident when, during a drug and alcohol blackout, he attempted to strangle Sharon. Rather than whitewashing the event, both parties acknowledged its severity while contextualizing it within addiction narrative. Sharon dropped charges after Ozzy completed court-mandated six-month rehabilitation, demonstrating that strength comes from requiring change, not hiding problems.

Modern Brand Risk Lesson: Authentic redemption requires time, consistent action, and genuine transformation. Brands that acknowledge mistakes honestly and demonstrate real change through sustained effort build deeper trust than those that never face controversy at all.

Building community that defends your brand during crises

The “Suicide Solution” lawsuits of the mid-1980s revealed how passionate community can shield brands during unfair attacks. When multiple families sued Ozzy claiming his song caused teenage suicides through subliminal messages, he faced potential career destruction. Parents argued the lyrics contained “hidden” commands encouraging self-harm.

Sharon’s coordinated response demonstrated masterful stakeholder management. She balanced legal strategy with public empathy, never appearing callous to grieving families while consistently explaining the song’s actual anti-suicide meaning: “solution as in liquid, not a way out. The song’s about the dangers of alcoholism.” Ozzy’s shocked arrival at LAX to face 200 cameras was carefully choreographed to show genuine concern rather than defensive arrogance.

More importantly, Ozzy’s passionate fanbase rallied to defend him. They understood his authentic character and artistic intent, creating organic brand advocacy that no PR campaign could manufacture. All lawsuits were ultimately dismissed under First Amendment protection, but the crisis revealed something valuable: authentic brands that build genuine community can weather attacks that would destroy manufactured personas.

This principle proved prophetic during Ozzy’s reality TV transformation. When “The Osbournes” premiered March 5, 2002, it broke MTV ratings records with 8 million viewers by showing strategic vulnerability without sacrificing mystique. Former MTV CEO Van Toffler explained: “Ozzy had an allegedly sinister style… People were scared shitless of him… But he’s like a lovable teddy bear.”

Modern Brand Risk Lesson: Build genuine relationships before you need them. Brands with passionate communities can survive controversies that would destroy those with purely transactional customer relationships. Authenticity creates advocates; perfection creates indifference.

From damage control to brand enhancement through consistent identity

Sharon Osbourne’s crisis management philosophy revolutionized how brands can approach controversy. Her core principle: “Turn crisis into currency” by asking “What can this become?” rather than “What damage needs control?” This mindset shift enabled consistently successful outcomes across decades of potential brand disasters.

Sounds an awful lot like my Critical Opportunity method!

Her tactical methods reveal actionable strategies for those interested in mitigating and capitalizing off of brand risk:

Strategic patience over panic response: Sharon understood when to act immediately versus when to let stories develop naturally. The bat incident required immediate media choreography, while the Alamo situation benefited from long-term redemption planning.

Authentic narrative construction: Never completely manufactured responses, but found genuine angles within crises. The reality TV show worked because it revealed authentic family dynamics, not scripted scenarios.

Integration over elimination: Made crises part of ongoing brand mythology rather than trying to erase them. Today, controversial incidents are celebrated as essential Ozzy legend elements.

Controlled vulnerability: Strategic exposure of weakness builds sympathy and relatability without sacrificing core brand strength. Showing Ozzy struggling with TV remotes enhanced rather than diminished his rock credibility.

These principles enabled successful brand evolution through distinct phases: dangerous outsider (1970s-1982), controlled chaos with consequences (1982-1990), reformed bad boy with authentic struggle (1990s-2000s), lovable patriarch maintaining edge (2002-2005), and elder statesman with legendary status (2005-2025).

Modern Marketing Lesson: Consistent brand identity enables evolution without losing authenticity. Brands that maintain core values while adapting to new contexts can transform crises into opportunities for deeper audience connection.

Actionable crisis management strategies for modern marketers

Ozzy’s career offers specific frameworks modern brands can implement immediately:

Build your crisis management dream team before you need it. Sharon assembled consistent partners—same record label, agents, and crew for decades—who understood Ozzy’s brand identity deeply. Modern brands need core teams including brand managers, legal counsel, communications leads, and social media specialists with clear decision-making authority.

Develop authentic response templates, not scripted damage control. Create messaging frameworks that acknowledge problems honestly, take appropriate responsibility, and reaffirm core values through actions, not just words. The key is authentic dialogue rather than defensive corporate speak.

Apply the “75/25 Rule” during polarizing moments. Accept that 25% of audiences may never align with your brand values. Focus on the 75% who share your core principles, making bold decisions that strengthen bonds with aligned audiences rather than trying to please everyone—a lesson Nike proved with their Colin Kaepernick campaign.

Implement rapid response protocols with patience for long-term outcomes. Respond to social media crises within 4-6 hours, but plan reputation recovery in years, not weeks. Sharon’s Alamo redemption took a decade but created permanent brand goodwill.

Transform your biggest failures into brand differentiators. Instead of hiding mistakes, integrate lessons learned into brand storytelling. Authentic vulnerability creates deeper connections than manufactured perfection ever could.

Invest in community building as crisis insurance. Passionate brand advocates provide organic defense during controversies. Build genuine relationships through consistent value delivery, not just promotional messaging.

Conclusion: authenticity as competitive advantage

Ozzy Osbourne’s 50-year career proves that authentic brands can survive anything by turning crisis into connection. Sharon’s strategic management transformed potential career-ending incidents into brand-defining moments, creating cultural currency that manufactured campaigns never achieve. Their model influenced not just music industry practices but broader celebrity brand management, demonstrating that strategic authenticity consistently outperforms safe messaging.

The Prince of Darkness taught us that controversy, properly managed, doesn’t destroy brands—it reveals their true character. In our polarized digital age, where every brand faces potential crisis, the Osbourne playbook offers hope: genuine brands that own their mistakes, demonstrate real growth, and maintain consistent values can transform any scandal into competitive advantage.

Modern marketers face a choice: build brands strong enough to weather any storm through authenticity, or remain vulnerable to destruction at the first sign of controversy. Ozzy’s legacy suggests the path forward is clear—embrace your authentic identity, prepare for crises strategically, and remember that the most memorable brands are built not on perfection, but on genuine human connection forged through both triumph and adversity.

Ready to Transform Your Brand Risk Strategy?

Download our comprehensive Strategic Intelligence Report and discover advanced crisis management frameworks that leading brands use to turn controversy into competitive advantage. This exclusive 47-page analysis includes:

  • Crisis Response Playbooks from 25+ successful brand transformations
  • Social Media Storm Navigation protocols with real-time decision trees
  • Stakeholder Communication Templates that preserve authenticity under pressure
  • Brand Recovery Metrics that measure reputation rebuilding effectiveness

After you download the report, you will receive an invitation to our exclusive 5 Day Critical Opportunity Challenge where you’ll work directly with People Risk Consulting’s crisis management experts to stress-test your brand’s vulnerability and build bulletproof response systems.

Limited to 20 participants per week.

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Transform your next crisis from potential disaster into brand-defining opportunity.

Astronomer’s Kiss Cam Crisis – The Consequences of Organizational Silence

The data infrastructure unicorn Astronomer became a household name overnight in July 2025 when CEO Andy Byron and Chief People Officer Kristin Cabot were caught in an intimate embrace on a Coldplay concert “kiss cam.” TechCrunch +2 What followed was a perfect storm of viral humiliation, toxic leadership exposure, and organizational communication breakdown that transformed an unknown startup into global tabloid fodder within 72 hours. The incident revealed deeper systemic failures where employees had long known about leadership problems—creating a corporate scandal that employees actively celebrated rather than mourned.

The viral moment occurred July 16, 2025, at Gillette Stadium when Byron, 50 and married with two children, was filmed embracing Cabot, also married, during Coldplay’s performance. Both panicked when they realized they were on camera, with Cabot covering her face while Byron ducked behind a barrier. CNNNewsweek Coldplay frontman Chris Martin quipped to the crowd: “Either they’re having an affair or they’re just very shy.” Newsweek +5 The TikTok video exploded to over 45 million views, generating more than 22,000 news articles in 24 hours and reaching over 15 million readers. Axios +2 Byron resigned within four days. NBC News +6

The ‘open secret’ that wasn’t so secret

While company officials never used the phrase “open secret,” the research reveals a pattern of toxic leadership that employees had long recognized and resented. Former employees immediately began celebrating Byron’s downfall in group chats, with one telling The New York Post that “everybody’s laughing their ass off and enjoying the hell out of what happened and him getting exposed.” SyFeed RSS Reader +4

Former employees described Byron as “toxic,” “aggressive,” and “sales-obsessed,” Axios with multiple sources claiming he would “lash out against employees who disagreed with him, including threatening to fire them.” BollywoodShaadis +3 This toxic culture was documented in Glassdoor reviews spanning 2023-2025, with employees consistently criticizing executive leadership while praising individual contributors. One May 2023 review stated: “Leadership is a disaster. Everyone with a ‘Chief’ in their title is in a power trip.” GlassdoorGlassdoor

The disconnect was stark: employees worked to “keep the company afloat” while dealing with “leadership whims,” according to reviews. Glassdoor +2 A July 2025 review posted during the crisis referenced workplace boundaries using Coldplay song titles, suggesting employees were already aware of inappropriate leadership relationships: “Some higher-ups seem to be Lost! in their own Paradise, leaving us wondering if workplace boundaries are just A Rush of Blood to the Head.” GlassdoorGlassdoor

Timeline of a 72-hour corporate meltdown

July 16, 2025: The kiss cam incident occurs at Coldplay concert

July 17, 2025: Video goes viral; Byron’s wife deletes social media after removing his surname Newsweek

July 18, 2025: Company remains silent for 24+ hours while fake statements circulate

July 19, 2025: Astronomer finally releases statement; Byron placed on administrative leave; Pete DeJoy named interim CEO NewsweekCNN

July 20, 2025: Byron officially resigns NBC NewsCBS News

The 24-hour communication vacuum proved catastrophic. According to Axios, the delay occurred due to “Byron’s slow resignation and exit package negotiations,” allowing fake statements, memes, and conspiracy theories to dominate the narrative. Axios Crisis communication experts described the response as “too little, too late,” with the company losing complete control of its story. Axios

Internal dynamics and missed warning signs

The incident exposed fundamental organizational dysfunction across multiple levels. Byron had personally hired Cabot in November 2024, publicly praising her “exceptional leadership” and calling her “a perfect fit for Astronomer.” In hiring announcements, he emphasized that “our people are the most valuable asset”— Astronomer +2 a statement that became deeply ironic given the subsequent scandal. Newsweek +2

Systematic communication failures existed long before the crisis. Employee reviews consistently mentioned that “teams don’t always have insight into each other’s roadmaps,” creating planning challenges. Glassdoor The company had experienced layoffs in 2023 with impulsive decision-making that employees described as management “not knowing what they are doing.” Glassdoor

The fact that the scandal involved both the CEO and the head of HR created unique internal damage. As workplace experts noted, “the fact that it’s with the chief people officer is even worse” because it undermines the credibility of the entire human resources function and policy enforcement structure. FortuneEntrepreneur

Corporate consequences and leadership transition

The fallout was swift and comprehensive. Byron, with an estimated net worth of $50-70 million including significant Astronomer equity, deleted his LinkedIn profile and was removed from company leadership pages. CNN +2 His wife changed her name on social media and deleted all accounts. NewsweekNewsweek Cabot, who had purchased a $2.2 million New Hampshire home just months earlier, was placed on administrative leave with her status remaining unclear. Fox BusinessMen’s Journal

Pete DeJoy, the company’s co-founder and Chief Product Officer, took over as interim CEO and acknowledged the surreal nature of the situation: “while I would never have wished for it to happen like this, Astronomer is now a household name.” CNBC +3 The board launched a search for a permanent CEO replacement while emphasizing business continuity. CBS News +2

From a business perspective, the timing was particularly damaging. Astronomer had just closed a $93 million Series D funding round in May 2025, achieving a valuation exceeding $1 billion. CNBC +7 The company serves over 700 enterprise customers with its Apache Airflow-based data orchestration platform and had been experiencing 150% year-over-year revenue growth. Crunchbase News +2

How better organizational systems could have prevented the crisis

The Astronomer incident reveals critical gaps in organizational listening systems that, if properly implemented, could have prevented the public embarrassment:

Early warning detection systems: The company needed anonymous reporting channels and regular culture surveys that could have identified toxic leadership patterns before they escalated. Multiple employees were aware of problems but had no effective mechanism to raise concerns about executive behavior.

Robust crisis communication protocols: The 24-hour response delay demonstrated absent crisis management procedures. Axios Organizations need predetermined communication strategies, designated spokespeople, and rapid decision-making frameworks that prevent narrative vacuum situations.

Executive accountability structures: Better board oversight and 360-degree feedback systems could have identified Byron’s toxic leadership patterns earlier. The fact that employees celebrated his downfall suggests systemic accountability failures at the governance level.

Professional boundary enforcement: Clear policies around executive relationships, particularly involving HR leadership, should have been established and monitored. The power dynamics inherent in CEO-HR relationships require special oversight mechanisms.

Cultural feedback loops: Regular employee sentiment monitoring and exit interview analysis could have revealed the disconnect between stated company values and actual leadership behavior. The company claimed to value accountability while employees experienced the opposite.

Conclusion

The Astronomer kiss cam crisis represents more than a viral moment—it exposed how toxic leadership can persist in high-growth companies when organizational listening systems fail. Employees knew about leadership problems, celebrated when they were exposed, yet the company lacked mechanisms to address these issues before they exploded publicly.

The incident joins a growing pattern of CEOs losing positions over workplace relationships, from Norfolk Southern’s Alan Shaw to McDonald’s Steve Easterbrook. AxiosFortune However, the Astronomer case is unique in its viral nature and the clear evidence of employee relief at leadership change. For organizations, it demonstrates that traditional crisis management assumes leadership credibility that may not exist internally. When employees celebrate their CEO’s downfall, the crisis extends far beyond a single incident to fundamental organizational culture failure.

The company’s path forward requires rebuilding leadership credibility, implementing robust feedback systems, and addressing the cultural dysfunction that allowed toxic leadership to persist. While Astronomer achieved its goal of becoming a “household name,” the method serves as a cautionary tale about the importance of internal organizational health in an age of viral accountability. Fox BusinessCNBC

Your Team Already Knows What Could Destroy Your Business. The Question Is: Will You Find Out Before or After It Goes Viral?

The Astronomer kiss cam scandal wasn’t just about a CEO’s poor judgment—it was about systematic organizational listening failure that allowed toxic leadership to persist while employees suffered in silence. Their “celebration” when Byron fell reveals the depth of cultural dysfunction that could have been prevented with proper listening systems.

The harsh reality: If your employees would celebrate your downfall, you’re already in crisis—you just don’t know it yet.

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In 72 hours, Astronomer went from unicorn to cautionary tale because they had no early warning systems for leadership toxicity. Don’t let your company’s reputation, valuation, and culture collapse because you missed the warning signs your team was already seeing.

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What You’ll Get:

Strategic Early Warning System (SEWS) Framework: Combine employee voice with AI-enhanced detection to catch weak signals before they become costly problems

ROI Implementation Roadmap: Proven system delivering 354-455% first-year returns while avoiding $402,000+ annual losses from poor communication

Phase-by-Phase Action Plan: From securing executive buy-in to full deployment with clear accountability structures

Listening Champion Assignment Guide: Designate and empower senior team members for systematic implementation and oversight

The choice is simple: Build the listening systems that prevent disasters, or become the next viral case study of organizational failure.

Your employees are watching. Your board is watching. Your competitors are watching.

The question is: Are you listening?

People Risk Consulting transforms workforce intelligence into competitive advantage. We help growing companies hear what matters before it becomes a crisis.

How Silence Culture Can Put Your Company at Risk

In many cultures, silence is a sign of hierarchy or respect. Sometimes, silence provides space so others can be heard. But there’s another side of silence people don’t talk about—silence culture. Silence culture and its effects create quantifiable risk and revenue loss for organizations. However, the upside of enabling, and preparing, for the use of employee and customer voice can be significant.

What is silence culture?

Silence culture is an environment where speaking up is neither encouraged nor rewarded. Within silence culture, speaking up carries a great deal of perceived or real consequences for employees. So, questions are not asked and risks are not pointed out. You may have heard silence culture referred to as “not making waves.”

What problems are caused by silence culture?

The problems caused by lack of disclosure can be significant. Our founder, Diane Dye, created the ID Framework for Non-Disclosure Risk, which is proprietary to People Risk Consulting, to explain the four types of disclosure silence culture discourages. This teaching framework has four components.

  • Incident Disclosure
  • Instructional Needs Disclosure
  • Idea Disclosure
  • Identity Disclosure

Incident Disclosure

Definition: The likelihood an individual would disclose the occurrence of an incident.

Problem: 50% of workplace injuries go unreported. Direct costs include workers’ compensation payments, medical expenses, and costs for legal services (OSHA, 2024). Delayed reporting and care for workplace injury can result in fines in some states or worsening of the condition including damage to tools, equipment, and other property (WCF Insurance, nd). It can also result in time lost for replacing damaged equipment, spoiled work, and loss of production.

What You Might See: Physical safety risks, legal risks, cover up of costly mistakes, waterfall effect of a series of small incidents leading to larger, and more costly, failures.

Who Cares: This is often the biggest focus organizations have when it comes to the use of employee or customer voice in the workplace. Safety managers, risk managers, occupational health and safety care about this.

Instructional Needs Disclosure

Definition: The likelihood an individual would disclose their need for instruction.

Problem: Poor employee training and lack of identification of gaps in understanding can lead to low productivity, inefficiency, poor customer service, high turnover, and low-quality outputs of services and products (The Training Associates, 2022)

What You Might See: Decreased customer satisfaction, increased customer churn, employee turnover, workplace injury

Who Cares: Learning and Development functions focus on closing gaps in instructional needs, although some current performance management processes and levels of psychological safety within business units do not support individual disclosure of instructional needs until a costly mistake is made and a reactive response is necessary. Operations executives also care if people, process, and systems align.

Idea Disclosure

Definition: The likelihood an individual would disclose an idea or the disagreement with an idea.

Problem: According to a Gallup survey, disengaged employees cost U.S. companies between $450 billion to $550 billion annually in lost productivity and is an $8.8 trillion global problem. Sustained lack of innovation can lead to high employee turnover, increased recruitment costs, and a negative impact on bottom-line results. Disengaged employees are less likely to go the extra mile for customers, leading to subpar customer experiences. 

What You Might See: Lack of data on voice of the employee (VOE) or voice of the customer (VOC), stunted innovation, employee turnover, employees leaving to take their ideas to the competition, loss of competitive advantage, failure to speak up about detrimental ideas or plans that could create incidents

Who Cares: CEO, Chief Customer Officer, human resources executives, Chief Revenue Officer, risk management, change management

Identity Disclosure

Definition: The likelihood an individual would disclose or defend their identity.

Problem: Identity problems in the workplace can include identity conflicts, social identity (belonging or lack thereof), and identity crisis. It can involve a lack of clarity about personal role or organizational culture alignment including one’s values, skills, interests, or sense of self. People problems spurring from identity are costly to organizations.

What You Might See: Employee withdrawal, disengagement, behavioral concerns, employee retention problems, increased complaints and investigation

Who Cares: Human Resources leaders, DE&I executives, risk managers interested in harassment, and other human issues

If you would like to understand the ID Framework for Non-Disclosure Risk and how PRC can help you apply it to your organization, connect with us on a quick inquiry call. Workshops, leadership training, and assessment services are available.

People Risk Consulting (PRC) is a human capital risk management and change management consulting firm located in San Antonio, Texas. PRC helps leaders in service-focused industries mitigate people risk by conducting third-party people-centric risk analysis and employee needs assessments. PRC analyzes and uses this data alongside best practice to make strategic recommendations to address organizational problems related to change and employee risk. The firm works alongside leaders to develop risk plans, change plans, and strategic plans to drive the human element of continuous improvement. PRC provides technical assistance, education, training, and trusted partner resources to aid with execution. PRC is a strategic partner of TriNet, Marsh McClennan Agency, Cloud Tech Gurus, Predictive Index, and Motivosity.

Q&A with a Fortune 500 Whistleblower

In this Q&A, Diane Dye, CEO of People Risk Consulting talks to an anonymous whistleblower at a Fortune 500 company. This female executive shares her experience of encountering unprofessional and unethical behavior in a top organization, leading to harassment, racism, and a hostile work environment. Despite multiple reports over years with no action, this whistleblower took the initiative to report the misconduct, ultimately resulting in the individual’s dismissal after a lengthy investigation.

The Q&A highlights challenges in incident reporting and organizational preparedness for handling such issues. It sheds light on the importance of strong leadership qualities like integrity, trustworthiness, and effective communication skills to prevent toxic workplace cultures and ensure a safe environment for employees.

Diane: All right, so I am here today with a behind the scenes of the failure of when organizations do not fulfill incident reporting or enable voice within their organizations to the level that is going to help them, you know, really deal with the reality. So, tell me your story.

Executive: I worked for a very large organization in a leadership role. And when I was hired by this well known organization, that’s actually listed as one of the top 20 places to work, I was reporting to someone that I could see really quickly, was not professional, was not necessarily ethical in their behavior, in the way not just I was treated, but several people were treated. It was a man, and he definitely said things that he should not say. A lot of things were about women, and he was, like, targeting women and things like that, and just a lot of really unprofessional behavior for an organization that did not expect that from at all. So that’s how it started. And I was very surprised.

In fact, I was, at my first week or two of work, I knew right away that this was going to be a problem. And I was considering leaving within the first week or two. What I ended up doing is continuing on. As a leader, I felt like it was my obligation to make sure this got reported so that this wasn’t happening to me or to anyone else. And I saw it was happening to a number of people. It had been going on for years. People had reported this person and nothing came of it.

Statistic: 77% of employees believe their workplace has measures in place for reporting harassment. 50% of employees have reported some form of harassment. 54% of harassment complaints are fully resolved. 9.6% of female employees say raising the issue made it worse.

Diane: What were some of the reasons, you believe, nothing came of it?

Executive: And I think part of the reason for that, quite frankly, is a lot of these people that had reported this man didn’t really understand the human resources processes for corrective action. So they way they reported it was not tangible. So this person got off the hook over and over again. In hindsight, I believe someone should have dived deeper into this because so many people had turned him in and nothing happened. When I did this, I had so much to keep in mind. I’ve been a leader for over 25 years. And so I had a lot of really solid information. This was not okay. He gave information about employees that he shouldn’t have given and said completely inappropriate things in front of employees and clients.

Diane: What kind of innappropriate things were said? Was it racism? Harassment?

Executive: All of the above. Everything rolled into one. So there was racism and harassment. It was both. It was really both. I’ll give you some verbatim things that he would say.

He basically told one person that she “could be a poll dancer,” and another lady that started work, he goes, “yeah, she’s just blowing and going.” There was a girl that actually had to work in Winnemucca, Nevada. And he goes, “oh, I want to go with her to Winnemucca. And I’m going to get a shirt that says Winnemucca. Because that sure rhymes with a lot of things…”

I could go on. I mean, it’s just so much stuff, especially targeting women. But it was about sexuality, sexism, and prostitution and just saying, like, sayings and things that are really inappropriate in a very world class place.

And also he gave medical information about people, talking about why he fired people in the past and saying it in front of, like, in the lobby of a client’s building, talking about a person and firing them because of their specific medical issues. He was making comments about middle eastern people that were racist.

And honestly, I sat back and watched some of it because it is not a really fun experience to have to report someone. So, after watching for awhile, what I ended up doing is I addressed him personally. I let him know his behavior wasn’t appropriate. I had to be at a conference with him, and he started talking about the legs of this woman and how he’s “seen a lot prettier people.” This was an HR person he was talking about.

And I just told him it wasn’t appropriate and I don’t appreciate that. And it wasn’t well received. He was very angry that I said it. Then, later, it just continued and continued. And he basically told me, “there’s no way I’ll ever get fired from this organization because I have dirt on two of the people I report to. It’s like I’ve got so much dirt on them, they can never fire me.” What I ended up doing, just because I believe in giving people a heads up, I let his boss know that this wasn’t going well and that I was planning on reporting this. So I gave him a heads up and he told me to talk to HR.

HR said, “this is so out of control. You need to report this to the corporate hotline.” So I did that, and I gave, like, ten pages of documentation. And after I did that, it took corporate a long time to investigate and to complete the investigation. Every single thing I had documented, I had witnesses. It wasn’t just me and this person. Everything was witnessed. I had to continue to report to this person. And obviously, as the investigation went on, he knew I turned him in because it was very specific information and conversations that were had. So he knew it was me. I had to continue reporting to him for over three months.

Statistic: 1-2 weeks is the average and recommended time for an HR investigation to take.

Diane: How was that experience for you?

Executive: It wasn’t fun. What happened then is corporate compliance got back to me and said every single thing that I had reported was validated. They had made recommendations to his department and to his leaders. The recommendations were that he was a pretty big liability, obviously, and it was recommended to let him go. But instead of doing that, what they did is they moved him to another department, and he still had a team of people reporting to him.

The boss called me, said, “oh, I’m sure you’re happy you aren’t reporting to him now.” And I said, “actually, I didn’t do this just for me. This person can’t have people that he’s leading. It’s just not appropriate. It’s a huge liability and risk, and it’s not great.” So I said I wasn’t happy with the solution and the outcome. And what ended up happening is, after I had reported this is he got moved. He didn’t lose pay, but he got a different position, kept the same pay, and had a team reporting to him. Several other people came out of the woodwork and came forward with more information that they turned in about him.

And he continued the same behavior even after getting chance after chance, continued the same behavior. More people came forward with new information, and finally he was let go. So that’s how that went.

Diane: How many years were there between when you noticed this reporting to him, to the time where he was finally let go?

Executive: From when I got involved, probably about a year. But keep in mind, I wasn’t the first person to report something about him. It was six to eight years from the first incident until the company let him go. And, actually, there was another woman who reported to him who also had to call the corporate hotline at the same time I did. So there were two of us that had to call corporate hotline at the same time. Before us, though, there were many who either didn’t know how to document or didn’t know the process. So they fell through the cracks. This went on for six to eight years.

Diane: So, so that’s a huge systemic breakdown that perpetuates risk. In incident disclosure, because you have an individual who is putting the company at risk with his language, comments, harassment, sexism, racism. In today’s climate, that’s not freedom of speech. That’s creating a hostile working environment.

So where you have the breakdown occuring is in the incident disclosure. And it not that the disclosure didn’t take place. It’s the preparedness on the other end. And its the preparedness to understand there are some instructional gaps on how to document and report in a way that aids investigators. I believe organizations want to have these things documented. But they’re not prepared on the back end to deal with the complexities of what happens if someone does disclose. The defer you to the hotline. But, meanwhile, you’re still reporting to the person and your identity as a whistleblower is not protected. This put you at risk as well.

Executive: Being a whistleblower, I was in actually a way worse of a situation after I did that. The corporate hotline was so short staffed. So it took them a long time to investigate. Three months. It took three months to complete the investigation. And during that time, the working environment was made much more hostile for me be him because he knew I blew the whistle.

Diane: So there was no protective process. Therefore, for that three months while he was under investigation, because the allegations were so specific, you were at risk. Apparently he was told about the specific allegations as well, which allowed him to link that to you.

Executive: Yeah. The way that it worked is they had to question him about incidents that occurred. And obviously, what was the common link and denominator? That was me. When he was questioned about it, he obviously put it together. But there was no protection for me. None.

Diane: The risk on top of that is that you have someone who’s being investigated for a hostile working environment. Meanwhile, as a part of the investigation, a hostile working environment is being actively created through the process, or lack thereof, to protect a whistleblower. This disincentivizes anyone who sees something to say something. Because there is increased risk in reporting. You can have a reporting process in place. But if you don’t have a process for the protection the whistleblowers, that can actually do more harm sometimes than good. That leads to hush culture. It leads to just don’t say anything because it’s going to get worse once you say something.

Executive: And in addition to that, I stayed with the organization for three and a half years. This happened in my first year. After that, there were people internally who protected this person. He’d been there doing this for eight years before I even got there. And they were not happy that this happened with him. So I was targeted by some of his friends that were in high leadership positions as well. It was not an easy three and a half years for me at all.

Diane: That’s really difficult. And I’m sorry to hear that you went through that. So, if you were to flip the script and it was done differently. So you’re a leader. You’re, you’re an executive. You’re, you’re not unfamiliar with process and procedure around things and the right way to have things be done. If you were to flip the script and you were in charge of this disclosure, how would you have done this differently?

Executive: Well, first of all, it wouldn’t have gone on this long. There’s no way that the things that were continually turned in should have been addressed a long time ago. It would not have happened like this. The other thing that would have happened is direct conversations with this person and corrective action. In addition to that, if someone had reported a leader, there would have to be arrangements made so that they’re protected and not continuing to report to this person.

This particular case has such a long tail to it because it’s an eight year long collection and reporting of these incidents. These incidents created this hostile working environment with this particular leader. So that process from the first incident and the first reporting and the documentation of it and the correction or non correction of behavior is part of it. It really starts way back before it reaches critical mass. And it’s about an organization being willing to put their foot down on their values and say, “this is not us.”

There are very strong values instilled in the organization. I would say this is just one arm of the organization or a pocket where this is happening. I don’t believe that’s true in other areas because I’ve worked in other areas. So, it was one little pocket slipping through the cracks. But that pocket can create risks for the whole organization. There are very high values instilled in most areas in the culture that weren’t being honored in this pocket.

Diane: How do you think it was that pocket slipped through the cracks?

Executive: It’s a little bit different division and the oversight of that area is an anomaly. I do think there are leaders, though, that should have taken accountability for that. They didn’t. They just allowed it to happen because they were buddies with this guy. I think what happened, too, is the HR group that was specific to this little pocket, maybe wasn’t the strongest HR group. They were understaffed. And so, when things got reported, they didn’t handle it appropriately.

Diane: What would have made a stronger HR group?

Executive: It was just two people, and they weren’t escalating things the way they should have. When multiple people report things like this, there should have been better direction to the leaders that have this guy that this guy reported to. They could have also provided training to the leaders.

So really, there’s also an accountability thread within the organization, within the HR function. Even if you have a large organization where you have to have assigned team members for specific business units, that there has to be some thread of accountability as to what’s happening within those business units for corporate oversight and transmission of values. So there was a breakdown in oversight of that business unit’s assigned HR personnel.

Diane: Right. Well, let’s just go there and call out the elephant in the room. Were all these. Were all these male leaders, perhaps older?

Executive: Yes.

Diane: I truly believe that the younger generations are going to save us all. I really do, because this type of behavior is not acceptable. Misogyny is not acceptable. Racism, discrimination, overt sexism, all of that. But, you know, these men, they come from a different era completely. And we giggle and laugh at the absurdity of shows like Mad Men.

This is a mindset that is still present in some places. And it’s generational. But also, we are dealing right now with this cusp period of where this generational thought has to be dealt with in today’s context, because it’s not okay. And I have talked to leaders, executives in that generation, and some of them long for the good old days where you could say and do things like that. They long for those good old days like you long for your favorite candy as a kid. But the fact of the matter is there’s a high level of risk involved in that way of being.

Executive: Absolutely.

Diane: So although they are to their identity, they are not welcome to their identity of that variety within the workplace. I mean, if they want to exist like that in their social circles outside, you know, fine. It’s your life and your circle – also your personal consequences or not depending on who you surround yourself with. But, if you’re going to bring it inside the workplace, you have to understand as a leader, regardless of what generation that you’re in or what you believe, that you are dealing with an environment where it’s not the 1950s. It’s just not okay to be racist, sexist, educationalist and ageist, even all of those. It works both ways. Right? It’s also not okay for leaders who are younger than them to start saying, “well, you know what, old man? You’ve been in this job for too long. Get out.” It does work both ways.

Executive: Absolutely.

Diane: And we’re in a time where the workplace must have structures in place to disclose what’s counterproductive to not only the working environment, but the customer environment and things that directly impact the bottom line. Because I bet you dollars to donuts, if there’s a customer that’s within earshot of some of these things, that customer is not going to feel so good working with that company.

Executive: There were plenty of inappropriate customer interactions as well.

Diane: What was the net effect with the customers?

Executive: Honestly, some of them occurred before I got there. But I was there for one. And I shut it down pretty fast because I was present. You can definitely be at risk with losing a customer because it’s not appropriate. It’s a huge customer risk within the organization. And its a risk for anyone else that he interacted with.

Diane: Look at laws surrounding harassment and laws surrounding hostile working environment. I’m not an attorney. But this is a risk that can be mitigated by creating a certain environment within the workplace. Do whatever you like in your private life. Be whoever you want. But when you and your buddies impede on the workplace, that is a completely different animal. Then you have risk.

Executive: The interesting part was this person was giving, given multiple opportunities to change behavior and didn’t happen. They continued the same behavior. There were no repercussions for the behavior for years. It went on too long.

Diane: Exactly. And, and that going on too long can be headed off at the pass by being disclosure prepared and understanding those nuances of how incident reporting and the process of incident follow-through, communication and ancillary risks, like this is carried out. The internal communication aspect is important. How do you conduct an investigation without revealing the identity of the individuals that are bringing it forward? How do you protect the whistleblower within the organization to encourage employees to report? A lot of lip service can be done to “see something, say something.” And the fact of the matter is, if employees are saying something until they are blue in the face and nothing is happening, that too can impact the working environment,

So carrying this forward into your future, into your new career. How has this impacted you in a positive way?

Executive: Well, one of the things that I do is I actually consult on leadership. That’s one of my purposes, is really to help empower leaders and create really great leaders in organizations that build their teams and have positive cultures. So that is one of the things that I take from what I went through. I can relate to other people that may be going through similar experiences and really help teach leaders how to do the right things with their people.

Diane: What are some aspects of a really great leader?

Executive: Oh, gosh, there are so many. One is integrity, though. That would be one of the top. Its integrity, trustworthiness, being vulnerable and open, being honest, great communication skills and providing a great vision. Those are some of the key things.

People Risk Consulting (PRC) is a human capital risk management and change management consulting firm located in San Antonio, Texas. PRC helps leaders in service-focused industries mitigate people risk by conducting third-party people-centric risk analysis and employee needs assessments. PRC analyzes and uses this data alongside best practice to make strategic recommendations to address organizational problems related to change and employee risk. The firm walks alongside leaders to develop risk plans, change plans, and strategic plans to drive the human element of continuous improvement. PRC provides technical assistance, education, training, and trusted partner resources to aid with execution. PRC is a strategic partner of TriNet, Marsh McClennan Agency, Cloud Tech Gurus, Predictive Index, and Motivosity.

Q&A with Diane Dye by Darren Prine, Chief Revenue Officer, Cloud Tech Gurus

In this interview, Darren Prine, Chief Revenue Officer of Cloud Tech Gurus discusses the relaunch of WWC into People Risk Consulting and the importance of adoption risk mitigation up front in the requirements collection process of software or solution selection.

Darren: Can I tell you something? I’m just picking up a great energy vibe from your company rebranding. I see a lot of excitement and positivity in what you’re doing at People Risk Consulting. 

Diane: I just feel good and there is, so thank you for that feedback. I started What Works Consultants (WWC) in 2016. It’s been great being this trusted advisor to the C-level, helping them with board communications. But I had this nagging feeling the business wasn’t capturing my “why” as a CEO, you know? And, you know, Simon Sinek says start with why, right?

Darren: Someone else brought up his “Find Your Why” book to me on a call yesterday, and now I’m going to have to read it.

Diane: Oh, yeah, you have to. It’s the purpose-driven energy. That’s what you are experiencing is coming from. And as I proceed in my doctoral studies, which I’ll finish this year, I have just uncovered this passion for use of voice and disclosure.

And what happens, especially linking the purpose of our two companies, is you have solution adoption risk. You have a big adoption risk any time you make technological changes. Adoption risk begins with not doing the proper research on the front-end to determine where the current solution was lacking and how that aligns with what you want to achieve.

You don’t want to get excited about adopting something new and, because you missed the end-user or the CX element, recreate the problem with a different solution. That’s frustrating.

So, it’s a different approach to requirements collection. You want to look at both the power users within the organization and the customer-facing reception and how it impacts the customer experience.

When evaluating, ask yourself…

  1. What impacts has the current solution had? Positive and negative?
  2. What pain does the current solution create that you are looking to solve for? If there is no current solution, what are the reasons for seeking a technological solution to a problem?
  3. How has the people element of change been considered?
  4. What advocates and resistors exist within the organization?
  5. How does this transfer into your ability to drive full solution adoption?

You have to ask these questions because, otherwise, people will stay pretty tight-lipped internally if you don’t ask. This lack of inquiry creates a data vacuum that can add risk to a change effort.

I mean how many times have you heard, “we’re just going to stick with the status quo because we don’t want to open that can of worms. It’ll be fine.” It results in a kind of ostrich syndrome. Then, they get surprised when ignorance is anything but bliss from a risk perspective.

Darren: This is a good time to have this discussion. I recently had some issues with Airlines. I had a flight from Costa Rica, coming home from a trip there, and last minute they canceled the flight. There was really no information. I was in a giant line of people at the airport trying to figure out what to do. I then spent six hours in the chat queue, trying to get an agent. During that six hours, I went ahead and just booked another flight with Southwest instead of American to get home. After six hours, finally, they got on the chat. And I told them what was going on and how poorly they handled it. And at least they got them to refund me on the flight. But that’s an awful customer experience. But the part of that which is really sad is that there are so many technologies and solutions available that could have kept my experience from happening. 

Diane: And I can also understand and empathize somewhat. It’s not easy when the world is changing all around you. What they are worried about is the AI chat bots creating more liability for them than solving problems. But that’s a garbage in, garbage out kind of problem. And if you are engaged in the adoption of your solution, that’s a risk that can be mitigated.

Darren: American Airlines either doesn’t care or they’re like the ostrich and are happy with the status quo. And from a professional perspective with years in the call center industry, there are things they can do immediately to fix this. They can use Realtime AI agent assist to speed up agent interactions so agents can handle more interactions. They can use AI to automate 30% or more of their voice and digital interactions. We have partners who have thousands of on-demand gig agents trained and skilled who could be utilized during times of high interaction fluctuations. Our partners can fulfill that very quickly to handle surge times and improve customer experience on the fly.

Many organizations don’t know it but – they’re an ostrich. Most of them opt to save the money now not realizing the risk they are opening themselves up to. But it’s not just a risk mitigation play, there’s plenty of reward. Most of them have like a 5x to 10x ROI or more but they’re just not doing it.

And I see it all the time with companies. They will have an AI adoption team meet with consultants like you to look at their the full picture, someone outside the organization who’s agnostic, who’s going to look at the whole landscape of the company. They look at people, processes, leadership, training, how do they create leaders, etc., and map that out so they can understand it. By the end of it, the executives understand the root causes to some of their expenses and problems, customer care calls that could be avoided if they handled something differently or had better self-service, but there’s a resistance there.

Diane: Everyone wants to be the first person to win. No one wants to be the person to publically fail. But failure is a necessary risk of change. Kaizen says experiment fast, fail fast. Rapid prototyping is a core of innovative behavior. And the philosophy behind both is you never really fail, you just learn and innovate. But there’s a fear. And when there’s fear, there’s paralyzed action until its too late and then there’s a crisis. My workbook takes this concept down to an elementary but effective level anyone can understand.

Darren: It’s like there’s a fear and a resignation at the same time. I know my systems. I know my job. It’s not perfect. And ultimately it’s not that bad so I don’t care.

Diane: It’s also about empowerment too, the confidence someone has if they speak up that their voice will be heard and heeded. Inability to create change can be a real demotivator of the most brilliant people. Like this is the way it’s always been, this is the way it always will be. I’ve accepted that.

So they just kind of suck it up and do the day-to-day of job, even though the risk of failure is so much greater with inaction. But the interpersonal risk comes in because in their mind, they say, “you open your mouth you might piss the wrong person off and lose your job.” It’s self-protective.

That’s where that’s where psychological safety comes in. As an executive, you have to set up these structures where people can speak up. Otherwise, you’ve got your company or department set up like a horse with blinders on. You don’t get suprised by external circumstances. You blindside yourself in a way. And this chaos that comes from silence and avoidance could literally bring your company down. Southwest really got hit hard. I was part of that. Actually I was traveling with them during that time. They gave me a 25,000 air miles, an apology and a refund. I was fortunate to be in driving distance from where I was going, from Reno, Nevada to Scottsdale, Arizona. So, I just hopped in the car and just drove myself in my own car. But a lot of people aren’t that fortunate.

When that whole story broke, it was like, “their systems are how old? Their training process is what?” And then it became known it was always this project or that pushed in front of updated booking and call center systems. And ultimately, it required a crisis moment to make a choice.

You can see the tsunami, you can see the water pulling back from the shore. You don’t have to wait until people are drowning to take action. That’s why I tell our clients: Are you ready to take the RED PILL, Matrix-style? Because we can assess all day long, but a company has to be willing to say yes. We will invest today to avoid drowning in the flood tomorrow.

Darren: I think what you’re saying is so important.

Diane: I am really passionate about activating the voice of the organization (VoO) and the voice of the customer (VoC) and unifying them to create meaningful organizational change.

People Risk Consulting (PRC) is a human capital risk management and change management consulting firm located in San Antonio, Texas. PRC helps leaders in service-focused industries mitigate people risk by conducting third-party people-centric risk analysis and employee needs assessments. PRC analyzes and uses this data alongside best practice to make strategic recommendations to address organizational problems related to change and employee risk. The firm walks alongside leaders to develop risk plans, change plans, and strategic plans to drive the human element of continuous improvement. PRC provides technical assistance, education, training, and trusted partner resources to aid with execution. PRC is a strategic partner of TriNet, Marsh McClennan Agency, Cloud Tech Gurus, Predictive Index, and Motivosity.