This article has been written by Abhishek Ray pursuing an Executive Certificate Course in Corporate Governance for Directors and CXOs from Skill Arbitrage.
This article has been edited and published by Shashwat Kaushik.
Table of Contents
Introduction
Business growth comes at a cost. Cost of a human culture vanishing within the organisation. Cost of employee mental health and its effect on his/her family. Cost of crossing the ethical line to achieve the target. Cost of tarnished relations amongst colleagues due to undercutting your teammate. And last but not least, which hurts the most, is the cost of the undue burden we put on the environment. So much lost for a successful board room meeting, so much lost for looking down upon your competition!
Cost that doesn’t reflect on the balance sheet
With each passing month, as we embrace so much technology in our lives and witness Sensex cruising towards the $80,000 mark, we are losing on one thing. The one single most important trait we have that differentiates us from animals is humanity. We all have our own experiences; we come across so many instances in print where a corporation is losing its human currency. A corporate culture where ethics, culture and integrity are all on display is virtually nonexistent. Calls and reviews on a week off unapologetically have become common and are considered normal; non-compliance will tag the employee as non-competent, not a team player and a future potential. A leader walking into the office at closing hours and taking the entire team hostage till late for an unplanned review is no longer a rare occurrence. Someone on that team might have been looking forward to the date he had planned—maybe a daughter’s 2nd birthday party at home. These actions have emotional impacts, which we need to address, especially with the growing mental health issues surrounding us. It’s a cost paid by a family for a business growth decision taken by the corporation. The constant fear of being chucked off, impacting millions every day, is a cost for business growth. Needless to say, these impacts extend from the individual suffering to his family most of the time. So many companies ( big brands ) tag the word family to them in their quest to market themselves as employee friendly places on social media. But how many of their employees have been laid off or had to leave due to their toxic culture inside. Is this what we call a family, because a human family would seldom see its members being changed or missing all the time. That qualifies as a shameless act of perversion of the essence of a family.
The ever-increasing pressure to perform, where the worst end is losing your job, sometimes leads employees to take a path that is not ethical. Corporate ethics simply means doing the right thing by staying within legal and moral boundaries. Corporate unethical behaviour is a vast array, from fudging numbers, violating process, forgery to disrespectful behaviour towards colleagues and the list is never ending. While white collar crimes are mostly committed with greed as the backbone, it is also committed to adhere to the business pressure on an employee to achieve growth by doing gamed sales. And that is a cost paid for business growth. We all might have come across a horrible online team review video of a renowned bank a few months ago. In the video, a senior person is seen to be going through a fit of verbal diarrhoea, spurting all possible kinds of invective words to his team members. While the perspective behind what we saw is not clear, one thing is for sure that if the video is not fake, then no person on this earth has the right to disgrace fellow members with such words and rage. Now there can be various possibilities, like the man might be a habitual abuser, but the most relevant reason, it seems, especially after listening to the conversation, is the inability to manage the business pressure from the top, which led to this gross ethics violation, which is a cost paid by all those in the video for business growth. The other frightening part of it is that the organisation in this corporate scandal is a respected bank where many of us put our hard earned money and go for a peaceful sleep.
At India Inc., on a C suit level, the encouraging fact is the increased mention of corporate culture with respect to the past. Also encouraging is the spending on workshops, consultants, and surveys to improve their corporate culture. What is discouraging is the outcome. Now to dissect what is going wrong is beyond my intellectual capabilities; however, one reason is very clear to me, and that is my inability to implement. Inability to walk the talk. Most companies rely on a forced curve performance management system, which essentially pits employees against each other to gain some rewards and needs a certain percentage of employees to be at the bottom. This tactic undercuts collaboration, thereby undercutting team building, another corporate buzzword for years. Employees who are humans end up losing long-term relationships, which at the individual level would have helped them a lot in the unforeseen future. Not to forget the scarring effect on the minds of those who are at the bottom of the performance pyramid. That is a cost paid for business growth.
Finally, the collective cost paid by mankind is the fleecing of natural resources, leading to environmental degradation. In a race to emerge as the winner in the sales quarters to come, is production linked to consumption? Is the consumption habit based on the reduce, reuse, and recycle principle? You may have seen across the major cities in India so many High rise residential units built to near completion and lying vacant as inventory while the builder is on a spree of new launches. Forget the number of units left partially completed and lying under litigation. Just have a look around your own household (none being an exception) and try to estimate the products, clothing, and food items that you may have purchased, not used and will probably never use. That is the effect of consumerism on us. We are being told, guided by the marketing guns, to consume as many products and services as we can, creating a severe imbalance between need and want. The result is depleting flora and fauna, drastic change in weather cycles, dried up rivers and coughed up lungs. That is the cost paid for business growth.
Stopping is not an option
So what should we do? Put a brake on our quarterly targets, lay off sales people, reduce manufacturing capacity and further reduce employment. While India is eyeing stepping further up in the top ranking economies of the world, is it suggesting a pragmatic way ahead? Growth is imperative and is the basis of the world we are living in today. Earning money is important for everyone, but in the race to earn more and more, we, as a society, must not forget all the tangible and intangible costs we end up paying. It’s high time we adopted a sustainable way of living, not just for us, because we will surely see through our earthly odyssey. It is important for future generations who are yet to come or have just arrived. What shall we leave behind? is what we must ask ourselves before we press the buy buttons.
The answer lies in transformative change and not in austerity and sudden changes. It cannot be achieved by putting brakes on our businesses, but by adopting a long-term approach to reduce, reuse and recycle.
Transformation is the way forward
Business growth redefined
The transformation must occur by shifting our approach to how traditionally we have looked at business growth. We have been monitoring our sales team based on units and volume pushed into the market; it’s time we monitored efficiency and quality of sales. Efficiency in manufacturing by reducing waste and using innovation to recycle and reuse will increase the profits we seek. All these parameters have been there but have been the topic of review only towards the end of the review meeting, taking away the sanctity. Businesses need to control the temptation of quarterly growth and shift towards long term growth by investing in research and development of sustainable ways of manufacturing and supply chain management. A circular model of economy with the 3 R’s is the answer for business growth while safeguarding the environment.
Sustainable employment
Hiring should be based on long term vision and commitment and not on a quarterly need basis. Investment must be made in upskilling and training employees, which would help them increase their contribution towards sustainability. Empowering internal controls, ethics committees by appointing independent experts will yield multiple benefits. This will truly safeguard employee interests and provide the will to help safeguard employee well being while creating a superior public perception of being an ethics driven organisation. An independent presence in these departments will present the company with a new perspective and help achieve employee friendly status beyond online postings and presentations.
Culture of sustainability
We, the people, must spread and imbibe sustainable consumerism by keeping the impact on the environment and society in mind with our buying choices. Consciousness when buying is the way forward. Society and not only businesses need to be held accountable with their own sustainability reports stating their carbon footprint. Finally, education and awareness programmes shall be the pillars on which the culture of sustainability shall thrive.
Conclusion
It’s all easier said than done but imagine what the microsteps taken by each of us can result in. As we collectively made Black Friday a huge success, can we make a planet saving buy nothing day or a heartwarming giving day? Instead of going on a buying spree, it’s wise to ignite our creativity and create something out of the pile of leftovers we have at our place. Let’s collectively bring sustainability and the environment out of the hashtags and make them part of our daily lives.
