Poor values can kill a business
Mar 03, 2011
SIMEON owns a construction company. Ever since he got connected to powerful politicians, business has been booming. He is always assured of winning every three of the five tenders that he bids for.
EXECUTIVE TALK
By Abdallah Amiri
SIMEON owns a construction company. Ever since he got connected to powerful politicians, business has been booming. He is always assured of winning every three of the five tenders that he bids for.
Unknown to many, his success formula does not lie in the strength of his team, but in his ability to “oil†the system by paying the key decision makers about 10% of the contract price.
The formula has been working well for him and he sees no reason for looking for any other success recipe.
Within his company, it is common knowledge that the end justifies the means. Therefore, bribery and other unethical activities are ignored and even applauded as long as they lead to more business for the company.
On the other hand, Joel has a mid-sized consulting firm with a highly experienced and multi-skilled team of 10 people.
Since it was set up two years ago, he has only succeeded in winning a few small jobs despite presenting good proposals.
The situation has been worsened by his recent decision to sack two of his managers. Their crime was trying to convince him to offer bribes so as to win a big contract with one of the leading NGOs.
This new development has further dampened the already diminishing staff morale.
Most of his staff cannot understand why one would be penalised for trying to bring a crippled business back to life.
To further drive his point home, Joel has sent out a stern memo to his staff informing them that the firm has a zero-tolerance policy to behaviour that contravenes the firm’s value of “honesty and integrity in all dealingsâ€. The memo adds that he will not hesitate to take more stringent measures if anyone is caught doing the contrary.
Joel believes that it is better to lose a juicy contract than embrace any dealings that may later tarnish his and the firm’s good name.
At a certain point in time, almost every business faces this kind of ethical dilemma.
Many times, owners are torn between taking the unethical, but quickly rewarding path or sticking to one’s values and ideals. The decision that one takes depends on self examination.
As a new business owner, it is always advisable that you come up with a set of guiding principles and values before you recruit your first staff. The values you select should be ones that you cherish.
It is never advisable to just “copy and paste†the guiding principles from other companies without fully understanding what each of them would entail for an employee in your company.
Once you have come up with the guiding principles, ensure that every employee you bring on board understands them.
For a business with premises, ensure that the values are hanged in all the strategic areas. This will be a good daily reminder to the staff as they go about their daily business.
However, hanging up well printed values and guiding principles does not necessarily mean that the people in the business are abiding by them.
There are a number of entities that have taken the step of having glossy prints-outs of their values, yet the actual behaviour of the employees is contrary to the printed values.
To avoid such a situation, you have to ensure that the top management adheres to the values in all aspects of their lives right from the beginning. This will also propel the other staff to follow suit.
Otherwise, how will you have the moral authority to reprimand an employee for coming late to work and yet her supervisor always strolls in three hours late?
As long as the decisions that you take are in line with your beliefs, bravely move towards building a solid foundation for your business.
In the next strategy series, we will discuss the importance of setting five-year goals for your business and why this can be a good way of keeping your team focussed.
The above are personal views of Abdallah Amiri, a senior consultant with Ernst & Young.
Abdallah.Amiri@ug.ey.com
By Abdallah Amiri
SIMEON owns a construction company. Ever since he got connected to powerful politicians, business has been booming. He is always assured of winning every three of the five tenders that he bids for.
Unknown to many, his success formula does not lie in the strength of his team, but in his ability to “oil†the system by paying the key decision makers about 10% of the contract price.
The formula has been working well for him and he sees no reason for looking for any other success recipe.
Within his company, it is common knowledge that the end justifies the means. Therefore, bribery and other unethical activities are ignored and even applauded as long as they lead to more business for the company.
On the other hand, Joel has a mid-sized consulting firm with a highly experienced and multi-skilled team of 10 people.
Since it was set up two years ago, he has only succeeded in winning a few small jobs despite presenting good proposals.
The situation has been worsened by his recent decision to sack two of his managers. Their crime was trying to convince him to offer bribes so as to win a big contract with one of the leading NGOs.
This new development has further dampened the already diminishing staff morale.
Most of his staff cannot understand why one would be penalised for trying to bring a crippled business back to life.
To further drive his point home, Joel has sent out a stern memo to his staff informing them that the firm has a zero-tolerance policy to behaviour that contravenes the firm’s value of “honesty and integrity in all dealingsâ€. The memo adds that he will not hesitate to take more stringent measures if anyone is caught doing the contrary.
Joel believes that it is better to lose a juicy contract than embrace any dealings that may later tarnish his and the firm’s good name.
At a certain point in time, almost every business faces this kind of ethical dilemma.
Many times, owners are torn between taking the unethical, but quickly rewarding path or sticking to one’s values and ideals. The decision that one takes depends on self examination.
As a new business owner, it is always advisable that you come up with a set of guiding principles and values before you recruit your first staff. The values you select should be ones that you cherish.
It is never advisable to just “copy and paste†the guiding principles from other companies without fully understanding what each of them would entail for an employee in your company.
Once you have come up with the guiding principles, ensure that every employee you bring on board understands them.
For a business with premises, ensure that the values are hanged in all the strategic areas. This will be a good daily reminder to the staff as they go about their daily business.
However, hanging up well printed values and guiding principles does not necessarily mean that the people in the business are abiding by them.
There are a number of entities that have taken the step of having glossy prints-outs of their values, yet the actual behaviour of the employees is contrary to the printed values.
To avoid such a situation, you have to ensure that the top management adheres to the values in all aspects of their lives right from the beginning. This will also propel the other staff to follow suit.
Otherwise, how will you have the moral authority to reprimand an employee for coming late to work and yet her supervisor always strolls in three hours late?
As long as the decisions that you take are in line with your beliefs, bravely move towards building a solid foundation for your business.
In the next strategy series, we will discuss the importance of setting five-year goals for your business and why this can be a good way of keeping your team focussed.
The above are personal views of Abdallah Amiri, a senior consultant with Ernst & Young.
Abdallah.Amiri@ug.ey.com