The Importance of Values: Why You Should Follow Rules
Most narratives about business in this country in popular art, cinema, and literature depict the businessperson as one who habitually takes short cuts, looks for ways of gaming the system, will lie and cheat to make more profits, and is generally anti-social in the way they conduct their business. The incredible maze of rules and regulations that laid the boundaries within which business was to be conducted, made it almost impossible to run a business honestly and still make a profit. I said ‘almost’ deliberately because, of course, there were many exceptions to this.
Today, the regulatory framework has been eased to some extent, but many of the complex and often antediluvian rules remain. Many new startups will enter business in such an environment, and may be tempted to follow the advice of well-meaning but mistaken people, and follow the practice of paying off officials to get favours and being let off for violations. That would be a serious mistake.
The values a business adopts and the policies the business will follow to practice those principles, will determine the kind of business you end up building. As the tag line of Infosys says: ‘Powered by Intellect, Driven by Values.’ Another tagline of Edelweiss Capital states: ‘Ideas Create. Values Protect.’ Let us examine what these statements mean, and why they are not mere motherhood statements.
First, following rules and regulations is not an option. Statutory compliances are obligatory, and the sooner you realise that, the better it is for your company. Violation of rules will lead to penalties and prosecution, and can take a terrible toll on a business. In this country, we are still accustomed to thinking that any problem, even a violation of a statute, is something that can be fixed.
This creates two sets of problems. On the one hand your people will get used to short cuts, will not read and understand the regulations and statutes that lay down the boundaries within which business must be conducted and hence, become lazy and sloppy. This means that violations will become common, and it will become an embedded practice to get these ‘resolved’ using the usual under-the-table methods. If on the other hand, they spent time reading and understanding the regulations, they will find it easy to comply, making any fixing unnecessary. Secondly, regulatory compliance is still poor in this country, due to the combined effect of inefficient enforcement and imperfect business ethics.
Regulation is, however, gradually improving, as rules get simpler. India is making mighty efforts to enhance its ranking in the Ease of Doing Business study conducted by the World Bank. India currently ranks 100 out of around 175 countries surveyed. The top ranked is Singapore, which has among the strictest enforcement of business rules and regulations in the world. Investment will flow to those places that have clear and transparent rules, which are enforced impartially and fairly. Businesses also find that it is simpler to run an enterprise in such an environment, devoid of ambiguity and opacity.
Following rules and regulations imposed by external authorities is one way of making your organisation one that is rule-based and process-driven. This is especially important as the company grows, and the number of people working there multiplies. It is important for these people to know that they work in an organisation that has processes which are rule-based, clear, and transparent.
Morale will be higher when people know that they will be rewarded for the work they do, and not for who they are related to. Core business processes, including procurement, quality assurance, production planning, business development, human resource development and marketing will evolve better as they become process-driven. Finally, statutes and rules were created to accomplish an objective, ie to make work places safer to work in, and to ensure that society and community in which a business is located are not harmed by the activities of the company.
It is therefore, a win-win proposition for you and your company. By following rules and statutes, and running business in an ethical manner, you are making your company better and more efficient at what it does.
THE VALUES ONE ADOPTS AND THE POLICIES BASED ON THEM WILL DETERMINE THE KIND OF BUSINESS ONE WOULD BUILD