Tuesday 27 January 2015

Speak up about speaking out

It's time to speak up about the benefits of speaking-out at work as a key mechanism for alerting a company to potential internal problems before they get out of hand and cause harm and damage, potentially risking reputation. This is why engendering  a speaking out (whistle blowing) culture is in  employers' best interests and should not be seen as a  threat.

However speaking out continues to be discouraged and even punished as research by the charity Public Concern at Work (PCaW) revealed that 75% of whistleblowers claim that they are ignored.  Worryingly the most common action taken against whistleblowers is formal action such as disciplinary or demotion and for many this will be too much of a personal risk. This shows that widespread mistrust still prevails among employees and until doing the right thing results in good outcomes then most are likely to keep quiet.

This is why PCaW set up a code of practice based on the findings of the Whisleblowing Commission and has established its "First 100" campaign, providing public recognition of those organisations striving for best practice. Being one of the 100 (there are now 36 organisations signed up) would seem to make good business sense as studies of US organisations with whistleblower-friendly policies in place decisively show that such an approach eliminates a potential blame culture by shifting focus to understanding the problem and finding solutions, while resulting in fewer external complaints.  Now that's got to be something worth speaking out about!.


Tuesday 20 January 2015

Tesco buyers say "just give me"

As dairy farmers are reported to be on their knees due to the competition by retailers to lower the price of milk to below production costs, the Panorama programme last night reinforced this heavy-handed approach. The programme reported that Tesco suppliers were suffering from aggressive buying with buyers "negotiating" by saying to suppliers " just give me" [whatever the amount] reflecting an arrogance and attitude of not needing to justify the demands. The programme reported heavy fines on suppliers if they did not meed targets or comply with demands.

Thankfully one large supplier L'Oreal is reported to have disputed £1m of charges and eventually came to an agreement with Tescos. But what is most worrying is that suppliers are being squeezed and yet not speaking out even with the protection of the Groceries Code, because no-one trusts the anonymity of the scheme. This is the same reason that employees fail to "whistleblow" because of potential repercussions. This reflects a general lack of trust in today's market.

Over the months this blog has emphasised that one of the ways to build trust is to treat all stakeholders fairly, including suppliers. And while many may think that the retailers have no responsibility for their suppliers, it's business after all, the consequence of screwing them to the wall is that the supplier ends up with no margin for investment and training thereby damaging sustainability. While the retailers may pronounce their actions are to create "better value" for customers, they are essentially short-term measures to compete without any view of the long-term.It is a shame that for a market leader like Tesco it is not in fact leading the sector in fair and ethical behaviours. It has lost its reputation and regaining trust across all stakeholders will take time but fair treatment and transparency are good building blocks and great ways to boost long-term value.Hopefully they will realise this soon!

Friday 16 January 2015

Benchmarking measures up

Measurement was one of the noticeable factors uniting the world's most ethical companies and contributing to their success (see the paper "Changing the story:reasons to believe" in 20th November 2014 blog for details). All companies were active in external benchmarking not only against the sector peer group but also worldwide across industries.

This is important because benchmarking helps to build reputation and once a ranking is achieved, it creates a natural, internal motivation to maintain or better that ranking and position. It becomes self-perpetuating. It requires a leadership team that supports an open culture because the only way to maintain the ranking against your peers is to have a workforce which is actively innovative and creative to improve standards- benefiting the sector and business generally.

So while it is disappointing that the state of our business world needs the likes of Investors in People, Living Wage, Fair Tax  accreditation etc etc it does at least mean that some companies are taking more of an active interest in their social and economic impact and ensures that through benchmarking and innovation, competitors have to measure up.

Tuesday 13 January 2015

SSE use paying tax for competitive advantage



You may have seen the advertisements from the energy supplier SSE in the press recently. SSE is the first FTSE 100 company to be awarded the third party accredited Fair Tax Mark. It shows to what low levels the business community has sunk if paying the right amount of tax can be used for competitive advantage in this way. However, it does help to demonstrate that SSE is listening to the public. It also helps to build the business case for culture change as ethical behaviours can be used for both competitive advantage and sector leadership.

SSE’s Finance Director, Gregor Alexander says “Taxes are the way that every member of society makes a contribution to the cost of providing the public services we all rely on. That is why paying the right amount of tax matters and why SSE has a responsibility to make a fair contribution. SSE has always been open about its tax but we’ve taken our transparency to a new level following the advice received from the Fair Tax Mark.”

The one good thing about getting a mark like this and openly promoting it is that the company now has to work hard to retain it. Let’s hope others beat a path to the Fair Tax door so that paying the right amount of tax just becomes the basic, expected requirement of every, and any, responsible business.

Thursday 8 January 2015

Brands downsizing destroys trust

A number of brands have been exposed recently to "downsizing" ie reducing the size of their products without a drop in price. These include baguettes from Upper Crust and Caffe Ritazza, Birds Eye beefburgers, Pledge furniture polish, Twix and Pizza Express pizzas- which then had to increase the pizza size after customer outrage and damage to its reputation.

The consumer group Which? believes that shrinking products is  an "underhand way of raising prices". It is clear that the intense battle for the consumer's purse is driving "creative pricing" but this is surely no excuse for unethical decision making. As this blog has tried to emphasise over the months, transparency plays such a part in treating customers fairly and both are vital elements in building trust. These brand actions again create short-term gain but damage long-term trust and reinforce consumer cynicism.

Monday 5 January 2015

Would a "good culture kitemark" work in financial services?

In a recent research paper by Katie Evans of the Social Market Foundation there is a call for a Good Culture kite mark in the financial services industry as a signalling mechanism to help consumers in their decision making. The research entitled "Good Culture in Financial Services, Does the Model Matter?" reveals that 40% of consumers would consider switching financial services provider if an alternative provider was behaving in a particularly ethical way.  This would increase to 60% if the individual felt their current provider was behaving unethically.

The key issue however is how do consumers recognise good business behaviour? The kite mark is one of the recommendations on the basis that fear of losing the mark would result in a self-regulating internal culture of positive business behaviours. (This is very similar to the findings from research conducted by the CII see blog 20th November about companies attaining the Ethisphere Most Ethical Company award). This obviously requires companies to recognise that poor business behaviours result in competitive disadvantage.

The report also suggests if the level of the current deposit insurance scheme was reduced, which currently provides high levels of protection for deposits, consumers would be encouraged to undergo their own "due diligence" of competitors actively moving to lower risk companies ie with better business cultures. This potential consumer switching is undoubtedly what the regulator really wants.

Perhaps the area that could really make a difference is in linking the good culture kite mark with the capital requirements and the cost of funding for these companies so that the attainment and any subsequent loss of the mark hits the companies in a way that they currently relate to and understand. This, in addition to Katie Evan's recommendations, could surely make a real difference to consumers?

Friday 2 January 2015

Responsible business resolutions

Here are a few possible business resolutions for decision making in the new year:

I will act with integrity.
I will think for myself.
I will listen to my gut instinct.
I will consider the long-term.
I will develop confidence to put forward my views and challenge confidently.
I will be proud of my decision making and the impact I have on people's lives.

But of course all these individual resolutions also require an organisational culture to support them!