Over the last few years we have increasingly heard of companies implementing more and more policies ostensibly around the issue of ethics. Many have web pages speaking loudly about their professionalism and business ethics, and like many things, this falls under ‘thou doth protest too much’, but the reality of these companies couldn’t be farther from the truth.
One large Consulting Firm offers ‘ethics’ lectures to their employees, and distribute booklets on their ‘code of conduct’ while simultaneously the Senior Executives exhibit mind numbingly dishonest behaviour, and will spare no effort or expense to sign a contract. We hear of trips to Florida with expensive escorts, casino nights in the high roller suites, where the huge losses of the poor losers are covered in exchange for the signature on a tasty contract. Other gifts which are widely spoken of in the industry include Mercedes, condos, rumour of one VP receiving a cheque for, yes, get ready for it, $1 million in exchange for a particularly large contract. Another executive is rumoured to have received a 150 foot boat. There is constant chatter in the market, however no one is prepared to go public with these allegations for fear of never being able to work again.
Another huge firm is rumoured to be paying for expensive golf club memberships, apparently the fees at one club in Toronto are in excess of $200,000 annually……private boat trips for executives and their families in exotic locations, some of the payoffs are insane, in some of the smaller firms, one particularly pushy individual (I am being polite) is known for purchasing everything from dishwashers to wall to wall carpet and snazzy cameras to ensure he has exclusivity.
One company we were working with changed their policies along the way, and decided that all their suppliers in IT had to sign a new contract in order to provide Consulting or Search services. We were rushed off our feet by a particularly unpleasant young woman in HR, and as it was the means to an end, we went along with this as several Directors and VP’s had indicated their desire to work with us. I found myself being rushed to sign and deliver the document. Well, when something smells fishy, there are probably rotten fish somewhere …….and there certainly were. The last trip to see her, was different. This time I was actually received in her office instead of a small conference room. When she left the room for a moment to confer with a co-worker, I was able to cast a peek around the room and on the surface of her desk. There were many signs that she favoured a competitor, cups with logos, a leather notebook cover embossed with their logo, snazzy desk accessories, but the real tell was the $2500 Louis Vuitton purse and the silk $500 Hermes scarf carefully draped on the back of her chair. When she re-entered the room, I carefully checked her shoes and clothes, and it was clear that they were not in the least expensive, in fact, quite the opposite.
If she had the means to purchase the purse and scarf, she certainly would have not been wearing $60 shoes and a polyester suit. So, clearly they were gifts which she cherished from our competitor, and the type of gifts that we will NEVER provide.
Several months went by, no contact, no mandates, utter silence. No way to reach her, emails not answered, phone calls not answered. One day I called her from the reception area of a client’s office as I was told I would be waiting a while for the client to get back as they were stuck in traffic. I had space and time on my hands, as well as unlimited use of the phone the receptionist kindly provided, so I decided to use my time well. I called our Princess and, lo and behold, she answered immediately with a perky voice!! I introduced myself and politely asked if she had been travelling as she was difficult to reach. Always a good approach. I also mentioned that we had received to mandates or follow up whatsoever to the signing of the contract, at which point she rudely told me that ‘just because you have a contract do NOT expect any business’ ….
So what was all this about?? Why run suppliers off their feet to sign a contract if you have no intention of giving them any business??
Turns out, I spoke to a couple of other individuals in other firms who had the same experience. One gentleman was so angry that he decided to do a LOT of digging…..and was told that purchasing had signed numerous vendors to protect themselves from any image of impropriety, but the reality was that they have 2 ‘Preferred Vendors” who wine and dine them at incredibly lavish restaurants, send them on exquisite trips and buy them fabulous gifts, so unless one is prepared to offer up even better gifties, there is absolutely NO chance of ever doing any business in that firm. ….. . . . And it just gets BETTER………just this week a close business friend was offered a contract in that firm through a personal friend. He went for an interview, and was then sent to meet the Vice President as part of the so called vetting process. On his way to leave, the VP told him that he expected $5.00 per hour in CASH for every hour he worked there. My friend was speechless. He shook the VP’s hand and left. Now he finds himself in the situation where he needs the revenue but has no intention of paying. He is terrified that the VP will find an excuse to terminate him if he doesn’t pay up. THIS IS INCREDULOUS.
For the record, this is a huge semi public corporation, vendors are screened within an inch of their lives, but NO ONE is watching the employees who are making these rules and enforcing them. Increasingly we hear of companies where everyone from the Secretary, Purchasing and Senior VP’s are receiving huge gifts from vendors. Apart from being beyond dishonest, the other serious problem is that this behaviour is stifling small industry.
If start-ups are the driving force for the success of a growing economy, they are systematically being choked out before they have a chance. Many companies are forcing their suppliers to produce their financial records, and allow them to audit their accounts at any time. This is arrogant to a fault.
If a small start-up has an incredible product but a minus cash flow, how are they ever to get their product to market? To say these practices are disgraceful is an understatement.
One last comment on these practices, is that it is also a dishonest power play enabling large corporations to effectively steal great ideas from these little firms as they do not have the financial means to protect themselves.
Where are the ethics in this??
At some point these practices will be exposed and it will be a frightening sight to see the public reaction to this.