2017 is not yet over, but is on track to go down as one of the most natural disaster laden years on record. But there have been some spectacular man-made disasters as well, especially scandals relating to abuse of power. Here’s just a few of the headlines of this year’s scandals:

  • Wells Fargo compelled employees to open thousands of fake accounts in customers’ names;
  • City officials in Flint, Michigan knowingly permitted the city’s contaminated drinking water to poison thousands of its citizens;
  • Fox News Corporation’s culture of sexual harassment was exposed, resulting in high profile firings, and millions of dollars in settlements paid out to complainants;
  • Volkswagen was found guilty of installing software in diesel vehicles to deceive environmental regulators in the US and Europe between 2006-15, resulting in criminal charges along with penalties, fines, and settlements in the billions of dollars.

What’s more, this is far from a conclusive list, but just a few instances of abuse of power making headlines in 2017. Many of the scandals are still unfolding at the time of this writing.

The public response is outrage. Outrage is useful; it raises awareness and mobilizes people to action. But it can also lead to a sense of false assurance that punishing these organizations or their leadership is enough. When a large company, government agency, or other organization commits an abuse of power, it makes headlines because of the scope of abuse and the organization’s high profile. Yet these abuses of power are also happening at a smaller scale, and in lesser known organizations.

Outrage shouldn’t mask the fact that we’re all capable of abuse of power. Every abuse of power begins with a behavior, prompted by emotion, conscious or unconscious: denial, justification, ambition, fear, self-protection, greed. And none of these emotions is unusual, psychopathological, or criminal. Each one of us is susceptible to being driven by base, petty, or negative emotions.

To derive learning from these cases of power abuse it’s important to ask ourselves: how does it happen? Can it happen to me, to my organization or team? Can I recognize the behaviors that lead to abuse? How do we know if our organization is at risk?

There are factors that increase the chance of abuse of power: things that, in and of themselves, may not be harmful, but taken together, and given the right combination of circumstances—ambition to succeed, unethical or disengaged leadership, lowered oversight and regulations—can snowball into a major scandal. Let’s look at some of the factors underlying the cases cited:

The stronger the organizational identity, the greater the need to protect it

An organization’s identity, just like an individual, is an ego. And the bigger the ego, the bigger the need to maintain it. It’s not just size that makes an organization’s ego big but also things like success or status. Some organizations, like the Catholic Church, have a long and illustrious history and tradition to uphold. Other organizations have prestige and status to maintain, such as private schools and universities. Some organizational egos are based on their financial success, for instance financial institutions and technology companies. And some organizational egos reflect a unique or exceptional culture, which is often the case of organizations with charismatic founders.

The bigger the ego, the more organizations will defend it, especially under threat. When an organizational identity feels threatened, ethical action and decision-making often becomes a casualty.

Consider the Catholic Church. There may not be another organization on earth with such an important identity. The Church is a 2000-year-old, global organization with over a billion followers, underpinned by a powerful theology and worldview. It’s more than an organization: it’s a beacon of hope, a symbol of salvation and redemption, and the promise of an eternal afterlife. Its organizational “brand” shines exceedingly bright. As such, it casts a very dark shadow.

Over the past decades, it’s come to light how church officials around the world went to enormous lengths to cover up and deny the sexual abuse of thousands of children by its clergy. Officials ignored warnings, denied allegations, and knowingly reassigned repeat sexual offenders to different positions, rather than removing them outright, continuing to place children in jeopardy.

On a much smaller scale, Pennsylvania State University football program, another institution with a venerable reputation to uphold, was rocked by a child sexual abuse scandal. A grand jury report released in November of 2011 found that former Penn State defensive coordinator Jerry Sandusky sexually abused eight young boys (later increased to 10 victims) over a period of at least 15 years. Officials at Penn State were aware of the incident, but purposefully failed to notify authorities after learning about these incidents. The administration, including renown football coach Joe Paterno, ignored and attempted to cover up Sandusky’s sexual assaults, thereby allowing him to assault children for 14 more years until one of the victims came forward.

Both the Catholic Church and Pennsylvania State football program had strong organizational identities to protect. And in both cases, a positive identity worth protecting. But an organizational identity does not need to be a positive one for it to protect itself under threat. Such is the case with Volkswagen.

In 2015 Volkswagen admitted to the U.S. Environmental Protection Agency that it had installed illegal defeat devices in nearly 500,000 diesel engines to pass U.S. emissions test. In the wake of the revelations, former Volkswagen CEO, Martin Winterkorn, resigned, and while accepting responsibility for the diesel “irregularities,” admitted to no wrongdoing himself. In June of 2016 the US Justice Department reached a settlement with VW to pay $14.7 billion in fines. Deputy US General Attorney called the automaker’s deception “one of the most flagrant violations of environmental and consumer laws in our country’s history.”

Volkwagen AG is a 78-year-old company known for its strong identity and Winterkorn was known as a demanding, authoritarian boss who set overly ambitious goals, and didn’t tolerate failure. According to an article in the New York Times, VW’s culture was marked by an extreme deference to authority, intimidation and fear, and a lack of tolerance for dialogue and dissent. With its insular board, deferential culture, and a long and proud legacy to protect, VW had a climate ripe for abuse.

A strong organizational identity can be a prized asset but there’s a thin line between healthy culture and a rigid one, between an ego that is strong enough to withstand criticism and scrutiny, and one that protects itself at the expense of its most vulnerable members.


As we consider these cases above, one question comes to mind: why didn’t these organizations fire the bad actors? Why do some companies put themselves at great risk, spend millions on legal fees and payouts, lose good employees who refuse to work in a toxic climate, incur bad publicity, and even lose customers, all to protect a few bad apples?

Fox News Corp paid $13 million dollars in settlements over sexual harassment claims from five women against Bill O’Reilly, Fox’s top-rated news host.  Travis Kalachnik, former CEO of the ride-hailing start-up, created such a toxic, sexist culture that eventually he and almost his entire leadership team had to resign or were fired.

This is not just a matter of protecting organizational identity. This is a case of over-valuing “superstars,” or brilliant jerks, a term popularized by Netflix CEO, Reed Hastings. There’s a perception that it’s better to keep superstars, regardless of their effect on the team or culture, because their contribution far outweighs the costs associated with their negative behaviors.

But is this true? A recent study by Michael Housman and Dylan Minor for the Harvard Business School found otherwise. They directly compared the costs of keeping high performing versus terminating and refusing to hire toxic workers. They found that:

 [E]ven if a firm could replace an average worker with one who performs in the top 1 percent, it would still be better off … replacing a toxic worker with an average worker by more than two-to-one. That is, avoiding a toxic worker (or converting them to an average worker) provides more benefit than finding and retaining a superstar.”

The fact is, no company can afford the long-term effects created by a negative, hostile, or toxic environment. Studies have found that employees who are the targets of incivility, bullying, rudeness, and aggression from co-workers are more likely to quit their jobs, report lower levels of health and well-being, are less committed to their job and less satisfied with their work, and experience higher than average rates of anger and anxiety. Even minor moments of incivility and rudeness can create a negative work environment

Closed Systems

Closed systems pose a greater risk for abuse. A closed system is an organization that has limited or no flow of information exchange with the outer environment. It doesn’t solicit feedback from the outside; it doesn’t subject itself to external review; it doesn’t question its own assumptions. Closed systems are more prone to confirmation bias: to choosing information that confirms what it already thinks and ignores that which doesn’t.

For instance, private schools and universities, religious institutions, sports organizations, and even the military and police operate like closed systems in their insistence on prosecuting offenders and disciplining wrong-doers. However, they frequently fail at it.

Universities have routinely underreported sexual abuse cases on campus, and mismanaged those that were reported. In 2014, the U.S. Department of Education’s Office for Civil Rights opened investigations into 55 colleges and universities over how they have handled sexual assault among students, a number which reached over 300 by January 2017.

The Pentagon insists the military should be in charge of investigating and prosecuting sexual assault within the military—through its own chain of command—even though a large percentage of sexual assaults reported are committed by member of the victim’s chain of command. A Department of Justice Sexual Assault Prevention and Response survey of victims of sexual assault reports that of those who responded that they have been victims of unwanted sexual contact, 62% say they have already been retaliated against.  The Department of Defense’s own statistics shows that 60% of cases have a supervisor or unit leader responsible for sexual harassment or gender discrimination.

Another hallmark of a closed system is how it treats whistleblowers. Those who complain, raise an alarm, or report wrongdoing are punished, reassigned, demoted, or disregarded as troublemakers, poor performers, or those who “couldn’t cut it” or didn’t “fit in.”

For instance, when doctors brought evidence to Flint, Michigan city officials of heightened levels of lead in children’s blood, and researchers from Virginia Tech and the American Civil Liberties Union of Michigan brought evidence of water contamination, city officials disputed the research and assured citizens the water was safe to drink. State officials even went so far as to call the water expert at the Environmental Protection Agency who found Flint water to be corrosive a “rogue employee.”

 Like defending an organizational ego and protecting a toxic superstar, a closed system that refuses to look at itself with a critical eye, take feedback, or question its assumptions is at heightened risk of committing an abuse of power.

Dark corners

Finally, let’s not overlook the fact that at the heart of many scandals lie taboos—things people don’t want to talk about. These are society’s shadows, things like money, sex, and power. The more secretive the topic, the more a society or organization refuses to deal with it, the more it’s ripe for misuse and abuse.

This summer, an investigation by the Indianapolis Star–USA Today found that over the past 20 years, at least 368 gymnasts in the United States—many of them children, and almost all of them girls—were victims of some form of sexual abuse, perpetrated by coaches and the Olympic team doctor, Larry Nassar. Knowing of the allegations, just like the Catholic Church and Penn State, the USA Gymnastics association didn’t report allegations, and allowed abusive coaches to relocate to other gyms.

Nancy Hogshead-Makar, an Olympic gold-medal swimmer and CEO of the advocacy group Champion Women blames a “culture of silence” for the scandal:

“It’s just too easy for coaches to keep getting hired and hired and hired. Sexual abuse thrives on the fact that people are embarrassed about the topic, ashamed to talk about it, and they keep quiet about it. And that’s exactly why molesting coaches keep getting hired at the next place. Nobody talks about a coach that is inappropriate with athletes; the coach quietly moves away and gets hired someplace else.”  

The same charge can be levied at Penn State. Sandusky was a pedophile, but in the macho culture of sports, who was going to talk to him about his sexual interest in young boys? Of course, the administration was driven by the need to protect the school, but it’s hard to fathom that it was only organizational protection that prevented the men who worked closely with Sandusky for years, coaches and educators who devoted their lives to young men’s development, from raising concerns. Certainly, they were incredibly uncomfortable with the issue, which added to the denial and their unwillingness to address it.

The lesson here is this: Look at what you or your organization marginalizes. Wherever there is a taboo, there is a domain ripe for abuse.