Temptations of short-term gains and an attitude that does not take into account all the risks and the mitigation strategies prompt companies to adopt shortcuts, which eventually lead to its downfall
Recently, an Indian IT major was in the news for all the wrong reasons. This company, known for its integrity, was asked by a US court to pay a record fine of many millions of dollars after an investigation found that the company had illegally placed workers at its US client offices using visitor visas instead of the mandated H1B visas. It is alleged that this practice allowed the company to undercut competitors while bidding for the business. For a company built on strong values and widely known as an employer of choice, this comes at a time when the company is struggling to survive the onslaught from the competition and is seeing many senior leaders leave. What should this company do now to get over this black spot?
It is always very difficult to come to any conclusion on a case based on very little information. I will therefore resist from passing any judgments of mine. We will discuss aspects that are fallout of a case like this namely the corporate culture and the reputation of the company.
Building a strong reputation is a very long and drawn out process. It takes several years of systematic and consistent hard work to gain respectability and create an appropriate strong image for any company. Unfortunate cases like this certainly cast long-term damage on the company, which is not easy to repair. This and other such cases in corporate history again lead us to believe that strong governance as well as risk management structures are absolutely necessary for any corporation. Temptations of short-term gains and an attitude that does not take into account all the risks and the mitigation strategies prompt companies to adopt shortcuts, which eventually lead to its downfall.
In this case, building back the reputation will be a major PR nightmare. The company will also need to re-build customer confidence and the employer brand. This may mean a major PR campaign, excellent corporate results, re-establishing the employee value proposition through live examples, genuine ambassadorial role to be performed by the employees, etc.
Such cases also damage the corporate culture that takes painstakingly very long time to build. It will be a significant exercise to build back the internal culture. Most of the employees will never know the real facts and details of the case except what will be reported in the newspapers. Based on the public information, court ruling and whatever the internal communication that exists, to get back the employees to re-believe in the corporate values, practices and processes will be a very significant challenge.
This is a perfect time for the leaders to get closer to the employees, get into significant communication through focused group discussions, town halls, one-on-one chats, building the opinion leaders, storytelling, etc. To rebuild the culture, the corporation may have to refocus on the role modelling behaviors, creating some deliberate examples that re-establish the values, and some punitive actions against those who might have violated the cultural tenets in this case, etc.