A new column by marketing whiz Walter Vieira
There was an article written recently by Jayanta Roy, in Speaking Tree, a supplement of the Times of India, Mumbai. This article really made me think back to my 50-year career in the corporate world, where I have seen that adherence to ethical principles really pays off in the long run, even in a country, which is globally labelled as being among the most corrupt. Some of the points in this article are reproduced below.
#In the 1960's, a family business managed to build a big turnover, marketing an excellent biscuit in the South of India. It was as popular as Parle or Britannia biscuits were, in the West or North India. Brooke Bond decided it would benefit greatly from putting tea and biscuits together and made a very good offer to K biscuits to buy them out. K had no succession plan. Their share value was very high. The owners were getting on in age. And the offer was not only fair but also, very attractive.
The K family thought about this offer for some time. They had no questions about the price in the offer. It was more than fair. But most of their distributors and salesmen had been with them for decades. They had helped to build the business and bring it to where it was now. They wanted to be fair to them. So, they put in a condition that the distributors will be continued for two years after the deal; and the salesmen will remain employed till they reach retirement age.
This was a burden BB did not want to carry. They already had their own large distribution chain. And they already had among the largest selling forces in the country!! Why would they want to add on some more??
BB said NO. And KB responded with a SORRY. The deal did not go through. Over a period of time, the news filtered down that the owners had turned down a great offer, because they wanted to protect their dealers and their loyal salesmen. Both groups subconsciously decided to work more and efficiently to ensure the success (greater success) of their masters (Principals). Sales and profits of KB grew wild beyond expectations - and a new chapter had begun!
Was it Ethics in Business? Was it Loyalty in Business? Was it both?
The Company and Its Customers
#Keith Roy, personnel director of Glaxo in 1964, asked Tellis, who worked in the purchase department, and was the president of the workers' union, to come to his office to discuss some issues, over a brief meeting. When Tellis came in, Roy was immersed in reading some papers, and had his feet resting on the top of his desk. He absently waved Tellis to a seat in front. Tellis sat, waited a while and then put his own feet on the table on his side of the desk. Roy looked up—but he was not annoyed. He apologised profusely for his own bad manners. Both laughed and put their feet on the ground—and the meeting got off to a good start!
The Company and Its Employees
# When Azim Premji of Wipro was reportedly told by a manager in Mumbai, that the customs officials wanted 'facilitation' for clearing a very large consignment of computer parts, which were urgently needed by the factory, Premji said NO. Nothing doing. The manager explained that there can then be a delay in clearing the consignment, and the company will have to pay a heavy demurrage charge, much more than the amount asked for. “Perhaps. I will pay demurrage even if is higher, but will not pay a bribe!”
Such examples set the culture of the organisation. They (Wipro) do things their way.
The Company and Government Authorities
# I once met a road building contractor who had built some of Mumbai’s best roads – with cement concrete. The roads lasted for decades without potholes, ensuring smooth rides and satisfaction all round. But quite soon he discovered he was getting no contracts. The powers that be, wanted roads that needed to be repaired every year—to hopefully earn a yearly kickback. But did he change? He did not, and culturally, he could not! He moved to another career where he did not have to make such compromises.
Small Business Fighting Unprincipled Giants
#Sir Adrian Cadbury was caught in a fix. Kraft had acquired a majority stake in Cadburys and the founder family was now a minor partner, losing management control after four generations. Cadbury had provided employment to most of the people in the town for over a century. Sir Adrian had no resentment towards the new buyers. His only request was that Kraft should not move the facilities from the town, and render all those workers jobless, and perhaps later, homeless. Kraft agreed initially. But, after a few years, they moved the manufacturing to Poland, because of lower costs and the pursuit of greater profit and shareholder value.
Changing Managements and Changing Goals and Cultures
# Why did some large exporters of pharma products from India to US (among the largest being Ranbaxy) supply substandard or adulterated drugs, just because each batch is not tested by the FDA of US, and thinking they can get by? The new book A Bottle Full of Lies exposes companies that were doing business of millions of dollars every year and for many years using misleading analytical reports and playing with the lives of thousands of patients.
Companies, which do not have any ethical concerns at all, whether to customers, to employees or to society
However, all is not lost!
# When you see the way Costco in US is being run, with each employee smiling, wanting to help, and proudly wearing a badge with their name and the number of years at Costco 15 or 30, and the legend, ‘Proud to be at Costco’.
Would you be cheated at Costco? Impossible. Since they have a policy that anything bought at Costco can be returned with full refund: the chances are that they may themselves be cheated. But they make good profits and Wall Street are unhappy that they pay their employees more than required instead of making more profits and making shareholders happier!
# And it is the same with Starbucks, where even temporary workers are provided full medical insurance, from the day they join. A great relief in a country like the USA where medical costs are unusually high.
# And the Tata group in India, where Ratan Tata, the chairman, rose to the occasion after the terrorist attack at the Taj Mahal Hotel in Mumbai (a Tata enterprise) and volunteered to help out all those who were injured, and to take care of the families of all those who had died in that horrific attack. And he kept that promise.
(Walter Vieira is a Certified Management Consultant; and a Fellow of the Institute of Management Consultants of India (FIMC). He has written 11 books – some of them best sellers – translated into Chinese and Indonesian and 3 books in collaboration with Prof. C. Northcote Parkinson of Parkinson’s Law fame. Mr Vieira has straddled the space between business and academia – and shares his vast experience with students and peers, to help make this a better world!)