While the coronavirus has been hogging the headlines, the Yes Bank saga has been giving customers and regulators sleepless nights. Rana Kapoor was, in many ways, a leadership star. An accomplished banker with stints at Bank of America and ANZ Grindlays, he set up Yes Bank with the vision of building the ‘Best Quality Bank of the world in India’. Yes Bank was a stock market darling but soon the whole success story unravelled and Rana Kapoor is now in jail. His is not the first to fall from great heights. Chanda Kochhar, hailed as a role model among woman leaders, is now derided as someone who stretched the ethical boundaries. What causes successful leaders to stray close to the line that separates right from wrong and then see that line blur while they cross it? What are the justifications they offer themselves?
As young business leaders we can be sure we will be confronted with similar moral dilemmas at some point in our careers. We must recognise the temptation and find the conviction and the courage to say no.
Everyone is doing it
I was naïve when I started my career as a young MBA to believe that corruption was the exclusive preserve of politicians. I firmly believed that the business world was completely free of it. I was confronted with reality when as a first-time manager, I had just completed a hard negotiation with a supplier and agreed on a rate. He was ready to write out the document and asked, “What rate should I put in?” I repeated the number we had just agreed. He again pressed me, “Yes, but what rate do you want me to put?” My veteran colleague who was sitting beside him, quickly whispered something in his ear and he with almost a gasp put the agreed number down. Turns out it was an established practice to put an inflated rate down, with the difference being paid as a kickback to the manager.
My colleague later told me — “Everyone is doing it.” This is an easy temptation to fall for — the morality of the majority or lack thereof. It is this behaviour that was behind the banking crisis when bankers fought with each other to sell junk securities to their trusting customers. Leaders are tempted to find refuge in the comfort of the majority. When everyone is doing it, it has to be right, they tell themselves. If we don’t do it, we will be left behind. But each time the answer should be no.
Leadership is often about being in the minority. Leaders are leaders, not to follow the majority but to lead them. Before we can bring our competence or our skills or our experience to bear on our work, we must be able to bring our integrity.
Just once
This is another justification that is the start of a slippery slope. Some of you will recall an earlier post in this column, on the broken window theory — borrowed from criminology but applicable to human behaviour. It outlined how a building that has a single broken window left untended is soon a mass of broken windows. “There’s never only one cockroach in the kitchen” as the saying goes. If we compromise once, we will soon be nothing but a bundle of compromises. The first time is the biggest test. If we fail it, we have opened ourselves up to a deluge of inappropriate behaviour.
One of the things I’ve found useful in my own life is to choose certain life pledges that make these decisions quick and easy. A pledge rates higher and more sacred than just a resolution. It requires reflection and deep conviction. Once you’ve chosen a life pledge, there is no need for an internal debate, there is no need to be caught on the horns of a dilemma. You are guided by it and find the strength to say no — irrespective of the consequences.
As Robert Brault said: “You do not wake up one morning a bad person. It happens by a thousand tiny surrenders of self-respect to self-interest.”
Nobody will know
Some cultures and value systems are driven by the moral principle of right vs wrong and some are more occupied with the aspect of shame — of losing face. The latter is more concerned with the question: “Will I be caught?” If the risk of that is low, then the behaviour keeps running amok.
A few years ago, in the wealthy northern suburbs of Athens, where summer temperatures often hit the high 90s (Fahrenheit), just 324 residents checked the box on their tax returns admitting that they owned swimming pools. So, tax investigators studied satellite photos of the area and came back with a decidedly different number — 16,974 pools!
A choice of behaviour based on whether I will be found out is fraught with danger. One, it means a life of constant tension; second, it leads to compromises that will threaten the success of the organisations we lead as our personal greed comes into conflict with doing what is best for all employees and someday the poor results will expose us.
This is so small, it hurts nobody
It starts with something as small as swiping office stationery. Soon, it extends to orchestrating official trips to ensure a family wedding can be attended. Before you know it, the behaviour has ballooned into much bigger violations. I was quitting my job at Singapore and returning to India to start TalentEase. I remember a colleague advising me that I should request a transfer to the India operations so that all my shifting expenses would be taken care of by the company …and then I could quit! There wasn’t a trace of confusion in his face, as he dished out the sage advice. Most big crimes start off small.
At Nissan, Carlos Ghosn was finally toppled, I think, because of the sheer arrogance of his violations. They may have started off small, but eventually the investigation report was damning. It outlined “Ghosn’s alleged use of the company’s assets for personal use, including: $27 million for properties in Beirut and Rio de Janeiro; $750,000 to Ghosn’s sister as part of a ‘fictitious consulting contract’; and improper use of corporate jets and expenses for family members.”
His successor came to office on the back of a reputation for toughness and integrity. Hiroto Saikawa was known to use two phones — ‘one phone for personal use and one for company (use) and when he rings his family, he never uses the company phone.’ That sounds like taking care of the small things, but he too resigned when it was discovered he had manipulated a pay change that boosted his compensation by $900,000! Clearly, a culture of exceptions and ethics-doesn’t-apply-to-me had taken hold.
In the final analysis, profits and revenue growth will eventually be forgotten if, along the way, we lose our principles and ideals. If we can’t look the man in the mirror, straight in the eye, even though we think we may have won, we have really lost. As leaders, we need to lead not just by what we do, but by who we are. That ‘yes’ must be powered by the willingness to say ‘no’, when it matters.