The Danger of Blind Trust: How Employee Loyalty Can Lead to Insider Threats
“Train people well enough so they can leave, treat them well enough so they don’t want to.”
You have recently embarked on a new job, immersing yourself in an unfamiliar work environment. Whether it involved switching roles within the company or relocating to a different city, everything feels fresh and exciting.
As the first month passes, you gradually grasp the culture and values of your new team. With time, you begin forming bonds with some of your co-workers. Simultaneously, your understanding of the inner workings and dynamics of the business expands.
Slowly but surely, a sense of trust starts to develop.
Now, the question arises: which comes first, loyalty or trust?
Before we delve into that, let’s explore a common saying: “one of the organisation’s greatest assets is its employees, but it is also its most significant risk.”
Employing someone is a crucial decision for any organisation, and rightfully so. The quality of its employees can determine a business’s success or failure, regardless of the tasks they undertake. Yet, those very employees also pose a significant threat to the organisations that hire them.
No matter how meticulous the recruitment process or comprehensive the policies and procedures, there is always a potential for disputes or breaches to arise.
Interestingly, when an insider breach occurs, it is often referred to as a breach of trust rather than a breach of loyalty.
Employers typically strive to cultivate a culture of loyalty, as it can lead to a motivated workforce, increased productivity, and long-term commitment. However, organisations must recognise that unwavering employee loyalty can also pose risks in the form of insider threats.
This article aims to explore the dangers associated with unquestioning employee loyalty and shed light on how organisations can mitigate the risks to safeguard their interests.
What is employee loyalty?
Employees are arguably the organisation’s most valuable assets.
They are the people that work day in, day out to strive to meet organisations’ missions and objectives.
Loyal employees can do absolute wonders for the future of the organisation.
Typically, employee loyalty refers to an employee remaining with a company for an extended period because they feel valued, appreciated, and believe in the overall mission of the company.
However, what does loyalty mean to you?
Does it mean:
- That the employee must always be faithful and always act in the organisation's best interest?
- Should they refrain from speaking negatively about their employers or team members?
- Is it expected that they would decline a new job offer even if it comes with a better compensation package?
- Should they never divert a business opportunity that rightfully belongs to the employer?
- Are they forbidden from stealing trade secrets or disclosing confidential information to outsiders?
Consider this an example of a “breach of loyalty.”
Example: Virgin Atlantis sacks 13 cabin crew over unsavoury remarks
What happened?
Virgin Atlantic has sacked 13 of its cabin staff after they criticised the airline and some of its passengers on social networking website Facebook.
It was found that all 13 staff participated in a discussion on the networking site Facebook where they described passengers as “chavs” and made jokes about faulty engines.
What were the consequences?
The staff were dismissed for their behaviour as it was totally “inappropriate” and had brought the company into disrepute, said Richard Branson.
Question – What would you think if you heard the following: “I don’t know whether this employee is loyal?”
Your mind will be racing to seek questions and answers… Determining someone’s loyalty can be challenging, relying on subjective judgments and personal experiences. It often involves observing their behaviour, building trust, and fostering open communication.
Increasingly, employees define loyalty based on the specific job they perform.
They strive to learn and excel in their assigned tasks. Once they have mastered their roles, they may seek new opportunities for greater responsibility or higher wages.
Their mindset becomes, “You pay me to do X, I do Y, and we are even.”
They consider themselves “loyal” as long as they fulfil their obligations, whether they work for a company for ten years or ten months.
More and more workers are taking the view that they are the sole drivers of their careers.
And this is evident by the recent report from the 2023 Gallup State of the Global Workforce, showing that 51% expressed some level of intent to leave their jobs.
Gallup went on to say that an analysis found that engaged employees require a 31% pay increase to consider taking a job with a different organisation. Not engaged and actively disengaged employees, on average, want a 22% pay increase to change jobs.
What is employee trust?
Trust is the underpinning of life, relationships, transactions and behaviours. Trust is about “confidence”.
The opposite is distrust. When you trust people, you have confidence in their integrity and capabilities.
When you have distrust, you are suspicious.
In today’s global economy, trust is king. It serves as the social framework for behaviour and reality, providing certainty and confidence in our day-to-day interactions. Without trust, our lives would be paralysed, leading to inaction and potential chaos.
Low trust creates friction, whether it stems from unethical behaviour or incompetence in ethical behaviour. It exacts the greatest cost on individuals and organisations, giving rise to hidden agendas, politics, conflicts, disagreements, and defensive/offensive behaviour.
When a new person joins an organisation, they are entrusted with significant trust and the belief that they will represent the organisation’s best interests. They enter a “temporary probation period” where both employee and employer assess each other’s suitability, determining the continuation of the employment relationship.
If the new employee successfully proves their worth during this probation, they earn full trust. From that point forward, their trust is not questioned unless they commit a wrongdoing.
Consider this example of a breach of trust:
Example: A former Google executive stole trade secrets to start his own autonomous trucking company
What happened?
It is alleged that the former Google executive had downloaded over 14,000 files containing proprietary information and trade secrets related to self-driving car technology, giving him an unfair advantage in his new venture – Otto. Uber later acquired Otto.
What were the consequences?
The case attracted significant media attention and resulted in a high-profile legal battle between Waymo (Google) and Uber. The former executive was later fired from Uber, and the company settled with Waymo, agreeing to provide financial compensation and ensure its autonomous vehicle technology did not utilize Waymo’s trade secrets.
This case of employee disloyalty and theft of trade secrets demonstrates the potential harm caused to an organisation when an employee breaches their duty of loyalty.
However, it can also be considered a breach of loyalty. Both trust and loyalty are interconnected, and determining which comes first is complex.
What is the difference between trust and loyalty?
Whoever said, “trust takes years to build, seconds to break and forever to repair”, was correct.
We understand that loyalty among employees is beneficial for both individuals and the organisation.
However, if not managed correctly, loyalty can also foster unethical behaviour.
Consider the following examples:
- Enron's downfall, largely caused by financial fraud, was fuelled by employee loyalty. Blinded by their devotion to the company, employees overlooked what was actually happening.
- Theranos, the former medical technology company that claimed to revolutionise the industry, used employee loyalty to create departmental silos, preventing collaboration necessary for developing safe and functional products. By keeping teams isolated, they could attract more investments while avoiding the reality of their failing technologies.
Trust is the foundation of any healthy relationship, whether personal or professional.
It involves having confidence and belief in the reliability, integrity, and honesty of someone or something.
Trust is built over time through consistent actions, open communication, and fulfilling promises.
When trust is established, it forms the basis for loyalty.
Loyalty, on the other hand, is a deeper emotional commitment or allegiance to someone or something.
It implies a sense of faithfulness, support, and dedication.
Loyalty often develops as a result of the trust that has been built. People tend to be loyal to those they trust because they believe in their character, competence, or the value they provide.
While trust is the foundation, loyalty can be seen as a subsequent outcome or expression of that trust.
However, it’s important to note that trust and loyalty are interconnected and can reinforce each other.
Building trust can lead to loyalty, and loyal behaviour can further strengthen trust.
Ultimately, the relationship between trust and loyalty is complex and can vary depending on the specific circumstances, individuals involved, and cultural or personal values.
Here are some examples where trust and loyalty are true.
- In a loving relationship: Family members trust and rely on each other for support, understanding, and care. Loyalty is demonstrated through standing by each other's side during challenging times and supporting one another's well-being.
- Friendships: Close friendships are built on trust and loyalty. Friends trust each other with personal information and confide in and support each other's goals and dreams. Loyalty is shown through being there for each other, offering a listening ear, and maintaining the friendship through thick and thin.
- Mentoring: In a mentor-mentee relationship, trust and loyalty are crucial. The mentee trusts the mentor's guidance, advice, and expertise, while the mentor remains loyal by investing time, effort, and resources to help the mentee grow and succeed.
- Community: Trust and loyalty are essential within communities. Members trust each other to promote safety, respect, and cooperation. Loyalty is shown through active participation, volunteering, and supporting community initiatives.
Here are some examples of where trust and loyalty differ:
- Passengers trust the pilots to fly safely to their destination but do not need to be loyal to the airline brand.
- Patients trust their doctors to provide health care but do not need to form close friendships or be loyal to that doctor.
- Car drivers trust the driving rules and that other drivers will follow the same rules, but they do not need to be loyal to the Government that has laid out the rules.
- Soldiers might surrender to the enemy trusting them not to shoot them, but they will not be loyal to their combatants.
Blind Trust
Whoever said, “trust takes years to build, seconds to break and forever to repair”, was correct.
We understand that loyalty among employees is beneficial for both individuals and the organisation.
However, if not managed correctly, loyalty can also foster unethical behaviour.
Consider the following examples:
- Enron's downfall, largely caused by financial fraud, was fuelled by employee loyalty. Blinded by their devotion to the company, employees overlooked what was actually happening.
- Theranos, the former medical technology company that claimed to revolutionise the industry, used employee loyalty to create departmental silos, preventing collaboration necessary for developing safe and functional products. By keeping teams isolated, they could attract more investments while avoiding the reality of their failing technologies.
Blind trust can arise from an excessive reliance on employee loyalty, leading to complacency.
When employers or managers place too much faith in their employees without maintaining appropriate vigilance, blind trust can result in negative consequences.
Blind trust occurs when employers become overly comfortable and neglect to exercise due diligence in monitoring their employees’ actions, performance, and adherence to company policies.
It can stem from a long history of loyal and dedicated employees, creating a sense of complacency within the organisation.
As a result, employers may overly depend on their employees’ loyalty, overlooking potential warning signs or misconduct.
This blind trust can lead to several detrimental outcomes:
- Employees may take advantage of the situation by engaging in unethical behaviour, such as misusing company resources or participating in fraudulent activities.
- Productivity may decline as employees perceive a lack of accountability.
- Additionally, blind trust can stifle innovative ideas and constructive feedback, hindering organisational growth and progress.
Example: How One Woman Stole $53 Million
What happened?
Rita Crundwell, who was a city official in the little town of Dixon, Illinois, was also the town financial comptroller. For 22 years, Rita funneled around $53 Million to build her own personal horse breeding empire while slashing police budgets, neglecting infrastructural needs and cutting staff.
When she was done raiding the taxpayers’ coffer, her crime was the largest case of municipal fraud in American history.
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“Trust is like the air we breathe,” Warren Buffett once said. “When it is present, nobody really notices. But when it’s absent, everybody notices.”
When you think of trust, you feel confident or open with the person or organisation. And should that bond of trust ever be broken, you should be able to recognise it.
Unfortunately, with blind trust, the confidence and openness are still there…but if the bond is broken, you probably won’t recognise or see it. I guess that’s why they call it “blind faith”.
It’s okay to trust people in both your personal and professional life. My question would be, to whom should you give blind trust? And is blind trust appropriate in the workplace?
