It’s really a wonder that I haven’t dropped all my ideals, because they seem so absurd and impossible to carry out. Yet, I keep them, because in spite of everything, I still believe that people are really good at heart — Anne Frank
It may be trivial to use this powerful quote from an iconic personality as an analogy to the business world. But, often, there are similarities between a war zone and a boardroom. Not in terms of nationalistic fervour, but about how a war and a company are both led by a handful of people who direct a larger majority to do something they have no idea why they’re doing. They only know what the consequences would be if they stopped.
Morality being at rock bottom, and staying alive against all odds are strangely similar to the environment employees of companies and corporates face today, as they grapple with the pressure of competitors, changing customer preferences, scarcity of resources and the rising costs.
Yet, upholding ideals such as integrity (in management), loyalty (to stakeholders), courage and humility (to admit flaws) means the triumph of character at the top management, which then inevitably percolates down to the entire organisation.
While abandoning values can have short-term benefits, in the long run, it is detrimental and could cost companies a whole lot of money.
The funny thing is, the pressure of consistent performance can lead to what is called ‘low standards in high places’.
Of scams and scandals
A quality-conscious company such as Toyota fell prey to just such a situation, when, in 2011, the company was forced to recall nine million cars from across the world due to a mechanical failure.
It was later found that Toyota leaders knew about the defects before they became public, but instead of taking corrective measures, they chose to hide the facts and distort the scope of the problem. This ultimately cost the company billions, to say nothing of the damage to their reputation.
Enron and Bear Stearns, on the other hand, had reward systems that incentivised dangerous behaviour and easily overpowered the effect of the control systems designed to prevent fraud and ethical breaches.
Recent instances
A third iconic example which highlights what the lack of values do to a company is the Toshiba scam of 2015, in which profits were inflated by $1.2 billion for seven years, with fabricated figures amounting to 30 per cent of the company’s ‘profits’ since 2008.
After this, CEO Hisao Tanaka and five other executives resigned. The 15-second apologetic bow would have made more sense if the corporate culture, in which employees were afraid to speak out against their boss’s push for unattainable earnings targets, was more open and honest.
While there are numerous such examples, the point is even companies such as Volkswagen, Ford and GM, all of which have been embroiled in scandals, realised how much they almost lost because they forgot what they really stood for.
Closer home...
But there have been examples where some companies realise how much they would gain by standing by their values — especially in the wake of a crisis.
The 26/11 terror attack imprinted in viewer’s minds the image of the burning domes of the majestic Taj Mahal Palace Hotel. But it also reminds them of the bravehearts who stood their ground and put the safety of guests first.
As many as 31 people died, but the Taj’s reputation only grew — the employees’ overwhelming sense of customer-centricity, the desire to protect guests disregarding their own personal safety, and their spontaneity was a huge contributor.
Touching tales of valour emerged about how restaurant staff rushed people to safe locations such as kitchens and basements, how telephone operators stayed on duty, how kitchen staff formed human shields to protect guests during evacuation attempts. Eleven employees lost their lives while helping 1,300 guests escape.
The reason why employees had such high levels of integrity was because of the HR practices, where recruitment was done with a major focus on hiring candidates who had values that matched the Taj Group’s and thereby the Tata Group’s — including hospitality, selflessness, respect for elders, and consideration.
It is clear that such acid tests either teach companies to uphold their values and thrive or suffer the consequences of compromising on their ideals. Such inflection points distinguish the best from the rest and give rise to heroes, who are remembered forever.
(The writer is a student of IIM Trichy)