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Trauma-Informed Leadership for Loss Prevention Management

In today’s fast-paced business environment—particularly in the wake of a global pandemic that left scars both visible and invisible—leadership styles need to adapt to new business challenges, such as remote work, increased crime, and unsafe work environments. Loss prevention management is responsible for reducing operational losses, including issues like workplace violence, employee theft, and collusion with organized retail crime. Therefore, loss prevention teams need to work closely with human resources and operations to ensure that the highest‑risk stores and locations receive a new form of leadership that is optimal for the post‑pandemic economy. One emerging leadership style that offers promise is trauma-informed leadership.

What Is Trauma-Informed Leadership?

Trauma-informed leadership recognizes the widespread impact of trauma on employees, consumers, and communities. This approach aims to create a safe and empathetic organizational culture by adopting a nuanced understanding of the vulnerabilities and triggers of job candidates, employees, vendors, and customers who have experienced trauma. Trauma-informed leaders prioritize emotional intelligence, active listening, and a commitment to equitable treatment.

Recent Psychological Research on Trauma-Informed Leadership

My research team recently made a presentation on trauma-informed leadership at the 2023 Conference of the Society for Police and Criminal Psychology. My coauthors were Gary Behrens, Dr. Michael Cunningham, and Brian Dreschler. This research examined the statistical relationship between a trauma-informed leadership mindset and job performance with 306 managers across the United States. In our study, high trauma-informed leaders were more likely to report supporting others with an awareness of and sensitivity to personal reactions to traumatic workplace experiences or stressful job events. These trauma-informed leaders tended to convey sincere and compassionate acceptance, offer support, and fulfill commitments to emotional welfare in a transparent, consistent, and fair manner.

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Using a research measure of the trauma-informed leadership mindset, our empirical study documented that a stronger trauma-Informed leadership orientation was associated with higher rated leadership performance in general. Moreover, compared to leaders with lower trauma-informed leadership orientations, the stronger group of managers was more likely to create a supportive and safe workplace, remain hardy and resilient in the face of stress, engage in conscientious and trustworthy leadership activities, and suppress workplace violence.

The Need for Trauma-Informed Leadership in Loss Prevention Management

The purpose of this column is to expand on how the strategic placement of trauma-informed leaders could support loss prevention management. The post‑pandemic economy has changed the landscape of loss prevention in several ways. With the rise of remote work, digital transformation, and socially distanced environments, new forms of loss have emerged. Coupled with the emotional and psychological scars left by the pandemic, social tensions, and a challenging economy, employees and consumers alike are more vulnerable to making decisions that could result in loss for organizations. Although a few of the following bullets require more applied research, they at least serve as viable hypotheses as to why trauma-informed leadership is essential for loss prevention:

  • Rising Mental Health Concerns: The pandemic has aggravated mental health issues, with increased stress and anxiety becoming commonplace. Ignoring these challenges can result in higher instances of workplace violence and theft as people act out due to emotional or psychological distress.
  • Growing Digital Vulnerabilities: The shift to remote work and e-commerce has amplified opportunities for loss, from digital fraud to employee data theft. A traumatized employee who is not supported properly may resort to unethical behavior as a coping mechanism.
  • Deteriorating Community Relations: With communities hit hard by the pandemic’s social and economic consequences, collusion with organized retail crime has become more tempting for some. Trauma-informed leadership builds relationships that reduce this risk.
  • Human-Centric Approach: A traditional loss prevention model can often be perceived as punitive, relying solely on disciplinary action to deter theft or violence. A trauma-informed approach seeks to understand the underlying factors that contribute to these behaviors, creating preventive measures that are conceivably more effective and humane in the long run.
  • Enhanced Organizational Resilience: Fostering an environment where employees feel supported leads to higher productivity, lower turnover, and ultimately, a more robust framework to prevent loss through both human and operational channels.
  • Store-Specific Crime Forecasts: Both retail and non‑retail organizations are increasingly using site‑specific crime risk forecasting with their stores to help them develop tailored risk management strategies for stores in the highest-risk locations. Ensuring that trauma-informed leaders are assigned to these high-risk stores appears to be a prudent loss prevention strategy.

Five Examples of Trauma-Informed Leadership in Loss Prevention

The following five program concepts serve to highlight how trauma-informed leaders can take a slightly different approach to controlling loss. These post-pandemic leaders still have proven leadership skills and competencies at their disposal, but they can also tap into their trauma-informed leadership toolkit.

  1. Employee Training and Sensitization Programs

Trauma-informed leaders might invest in training programs that focus not only on the technical aspects of loss prevention but also on emotional intelligence, conflict resolution, and recognizing signs of trauma among peers. This comprehensive approach prepares employees to handle potentially violent or risky situations with empathy, thus reducing the likelihood of escalation.

  1. Open and Safe Communication Channels

Creating an atmosphere where employees can speak openly about their challenges removes the taboo associated with discussing mental health. This leads to early identification of issues that could manifest as theft or violence, allowing for proactive action. Of course, human resources must be consulted at all times to ensure privacy protection.

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  1. Enhanced Support Mechanisms

Offering mental health support through employee assistance programs, professional counseling, and support groups can serve as a safety net for traumatized employees, making them less likely to engage in activities that result in loss for the organization. It is hypothesized that trauma-informed leaders are more likely to promote and utilize these programs to ensure the safest workplace.

  1. Community Outreach Programs

Being active members of the community can act as a deterrent to organized retail crime. Trauma‑informed leaders understand that by supporting community programs focused on education, rehabilitation, and poverty alleviation, for example, they are indirectly reducing the pool of potential criminals in the future.

  1. Fair and Humane Disciplinary Actions

In cases where loss occurs, a trauma-informed approach to disciplinary action can help in rehabilitating the employee instead of simply ostracizing them. This is beneficial for both the individual and the organization in the long run.

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Trauma-Informed Leadership Will Only Continue to Gain Momentum

In a post-pandemic world that is grappling with collective trauma, a trauma-informed leadership style offers a way to be both humane and effective in loss prevention management. Whether it’s through reducing the likelihood of workplace violence, curtailing internal theft, or preempting fraudulent activities, the six facets of trauma-informed leadership listed in the table play an integral role in creating a more secure, ethical, and productive environment.

Incorporating understanding, empathy, and active support into the very structure of an organization helps trauma-informed leaders build resilient teams, departments, stores, and districts that are not only less likely to contribute to loss but are also more engaged, more productive, and more loyal. While research is still needed to confirm some of the loss prevention possibilities shared in this column on trauma-informed leadership, this style of leading is surely going to gain momentum as a much-needed form of community responsibility that is simply good business.

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