People & Their Problems

New Delhi, 8 August 2009

Say Not To Temptations

CANCER OF BUSINESS CORRUPTION

Vivek Asrani Talks to Michael Smith

(Vivek Asrani, Managing Director of Keymo Stapling Company, in Mumbai, has made integrity a cornerstone of his company’s ethos. The small family business of 90 employees has a reputation for incorruptibility. Here he tells how his company has resisted the temptations of compromise)

We are India’s market leader in office and pneumatic industrial staplers with between 25 to 35 per cent of the Indian market. This keeps us on our toes.  But it is not about being the biggest; it is about being beautiful as a company—allowing the size to develop because the customer sees us as the preferred option. We take a reverse approach: we don’t compete, we excel. The energy that flows out from us is not about wanting to beat somebody else; it is about wanting to make ourselves better, more attractive, and more desirable to the customer. The customer is king. He is our annadaata—the one who gives us our daily bread. And who forgives us for some of our trespasses! With that approach we continue building in the manner we know best: sticking to our principles and getting challenged because of them.

When we were a $250,000 company in 2002, one tenth of our size now, I was negotiating an order which was worth about $200,000. It would have eventually doubled our business, but it was one of the most corrupt purchase departments I have ever come across. There was a clear expectation of a kickback and payoff. I remember walking away from the order and coming back to tell our people: “We will not do this. We will not take this order. We will not sell to them on their terms. We have given them our pricing; we have given them our offer.” I also said, “What does it take to win the game?”

We knew we were handicapped by not indulging in unfair practices. We were entering the race with one hand tied behind our back. But that challenged us to bring about a higher level of innovation, creativity, strength, courage, faith; so let’s find all of those. The handicap was our integrity and I clearly remember asking one of my managers when we lost another order, “How can we be penalized for being honest?”

We developed a highly process-driven organization, such that other organizations came to study our systems and processes. We set up India’s largest service centre, for after-sales service of our products. We opened offices all over India. We keep an inventory of over 3,000 spare parts. We increased our product range from 25 to 300—tools and consumables.  When I look back I say to myself, “Thank you for saying no”, because this became a stepping stone to something much bigger, better and more beautiful.

The interesting thing is that the customer came back to us about six years later to buy from us on our terms without us having to bribe them with even a single rupee.

More recently, a senior manager told me that a customer wanted to buy a huge order for staples. Their purchase manager had hinted, “Of course we can give you the business, but you guys don’t do anything for us.” Which was a polite way of saying, “You scratch my back and we’ll scratch yours. There is no baksheesh coming from your side.”

I allowed my manager to walk down this path a bit more before stopping him. “What do you think we should do?” I asked him.

He said, “Look, I know the principles of the company. I know the policy. I know what we stand for. But it’s too big an order.”

I said, “Yea, and what do you suggest?”

He said, “It’s a one off. Let me take care of this cash. You know it; I know it. Nobody else needs to know it. It’s too big for us to let go of.”

I said, “Alright. If we do it, what’s going to be the impact and the consequences?”

He looked and me and said, “Well, we do more business. We get a big order.”

I said, “What of it?” He stared at me blankly. I said, “Let me tell you the consequences that I see. At some point you are going to have aspirations to grow in this organization. You will need to handle a much larger portfolio of business. Then you will hand over this account to your subordinates. When you do that you will call them into the room and say, ‘Listen, I’m handing you this account. There is something about it which you need to know which only Vivek and I, and now you, know about this—that this guy has been paid off and this is how we take care of it.’ And from that day onwards that manager is going to start doubting everything he has heard in this organization. Second, he’s going to wonder is there a double standard in this organization. They say something in public but there are things done behind closed doors.’”

I said, “When he’s under pressure he’s going to resort to a similar thing—only you will know, he will know, and his one further down will know. Over a period of time it will become the way business is done in this organization. One cancer cell is going to start multiplying. It will replicate itself and before you know it, it will consume the organization.  More importantly you will never be able to find the conviction to stand in front of anyone, and say, ‘We do not indulge in unfair business practices. We are purely ethical. You will lose that edge. You will lose the conviction.’”

I said, “Now let’s do the mathematics. There is a loss in letting go of this business. And there is a loss in corrupting the entire organization which is going to be detrimental to our future. Which of the two is the bigger loss? You do the maths and you tell me, what’s the right answer?”

He grinned and said, “Alright. I’ve just got to go back and get the order without corrupting the system.”

It took us two years. We have that business today without having to pay a single rupee. The question I asked myself is: “Within the parameters of ethical business, what do we need to do on price, quality, relationships and service, to get the business? We work hard on it. We looked at pricing. I believe our character comes through not when times are good but when we are tested. And every time we are tested it reconfirms our willingness to say no to the temptation. The only thing I look for is the wisdom that we make the right decisions, the courage that we are able to live by our convictions and principles and the strength that we are able go the distance.  That is really what we are all about. We are living true to our natural being—the divinity in each one of us, which is a purity we all live with and which we are all born with. We just allow that divinity to be expressed through us as individuals and therefore as a business. That’s the faith, that’s the courage and the strength we live with.

Do we always succeed? Success is very relative because people measure it in a narrow and short-term time frame. When we did not bribe that purchase officer, were we successful? No. Today, do we have that business? Yes. So let us truly understand what it takes to build an institution beyond just a profitable business. When you start inculcating it with principles, that is the joy and fun of working, and that is the legacy I would like to leave. ---INFA

(Copyright, India News and Feature Alliance)