I recently had a dinner meeting with an experienced compliance professional and we got to discussing Indian companies that were known for their values. I gave him the experience of my teaching Business Ethics at a B School for 3 years where, in the opening session, I would ask students to name companies that in their perception were known for ethical behaviour. Each successive batch voted the Tatas as the most ethical Indian corporate. He then asked me how a diverse group like the Tatas manages to build and sustain an ethical ethos.
From my personal experience of working in India for a highly ethical corporate, there are four key aspects that set companies like the Tatas apart from the others.
The first and foremost is exceptional ethical leadership at the very top. Leaders like JRD and Ratan Tata have radiated righteousness at all times, shaping the attitudes of their senior managers and business heads continuously. The business leaders in turn act as role models for the rank and file. A remarkable demonstration of this value percolation is the way each and every employee of the Taj Mumbai reacted during the 26 Nov crisis, putting the safety of guests ahead of their own. In my opinion, there has been no greater demonstration of business ethics than this in corporate history. Consistent and persistent ethical role modelling at each layer of the organisation can do what no number of training sessions can achieve.
The second factor is the age and experience profile of senior management. In business houses like the Tatas the CEOs and Board members of group companies are normally in their 50s, and have spent long years in the company. They know that the only way to reach the top is by demonstrating 'sustainable' performance, as opposed to the focus on short term performance in many new age companies. This implicitly fosters responsible behaviour towards all stakeholders. If you look around the world at major governance lapses, you will invariably find people involved who have grown too fast and too early in life. BE has a lot to do with experience, and the unfortunate truth is this cannot be fast tracked.
The third factor is perhaps the most important. Employees in these companies know that they will not be faulted for the business consequences of ethical behaviour. To the contrary, they know that the organisation will stand by them in such situations. I was once the Commercial Manager of our manufacturing unit in Jammu, and we had a holiday home for executives in the beautiful city of Srinagar. I got a demand from a senior Government official to stay in the holiday home, that I refused. Soon thereafter, we had cases filed against the company demanding huge amounts for non-compliances that we were not guilty of. We had to go through long legal battles to extricate ourselves, but at no point was I faulted for the situation we were in. This is a tough attribute for a business to build, especially when it comes to pressures around revenue targets, product launches and investor expectations. On the contrary, if in such a situation the superior says "I need results and not excuses", the subordinate is very likely to go back and break the rules.
The last but most subtle factor is peer pressure. There is a sense of pride and belonging to the ethical ethos in these companies, that people who step out of line are ostracised by their peers and feel quite like a naked person on Oxford Street. Rotten apples do appear once in a while, but are quickly ejected from the system. I have seen this peer pressure operating at all levels right down to the shop floor, and the way erring employees work hard to regain the respect of their colleagues.
It has been a long blog, but building an ethical ethos takes long and sustained effort, and a short blog would be rather unjust to the topic.
No comments:
Post a Comment