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Do the right thing. Not because you have to, but because you want to.



COVID-19 is changing the face of business. It is teaching us as humans, some great lessons in humility. Hopefully, it has made everyone aware of how vulnerable we are and also has given the courage to be open about it. Probably, it has exposed us to the hard truth of life, making each of us aware of what is truly essential and nonessential to our life.


As more parts of the world go under lock-down, threatening the economy, jobs, growth - it is teaching the Corporate world a lesson or two in humanity. Suddenly articles, views, opinions and advice - on how the Corporate world should respond to this pandemic are going viral over digital media. Most CEOs are responding well to the call, and are being empathetic, more sensitive to the "humans" employed by these corporates. Most noticeable is the decision of some Corporates, offering pay-cuts over job cuts. A look at a trending thread triggered by the HBR article on the connected topic is assuring enough to say that everything is not lost. Optimist in me says that however cut-throat, capitalist, and "business-like" these CEOs appeared in the past, they have a heart that beats. They care about people.


But the pessimist in me asks - Really? Why should it be "people first" only in crisis? What happens later? Has COVID-19 served a final notice to all businesses that run with profit as their primary purpose while treating their employees as "resources"? Will this act of shifting focus back to their "people" sustain? Only time will tell.


Ricardo Semler, a visionary entrepreneur who believed in keeping people at the center of everything while managing Semco for over three decades, had institutionalized the practice of "salary cuts over job cuts." He had built his organization in such a manner that in rare instances when such a drastic decision was needed, it wasn't the management deciding it. It was taken bottoms up and keeping staff with the lowest wages untouched. He practiced a very high level of transparency of financial data in Semco. Everyone knew the financial status of the organization so, they were able to make informed decisions, and it wasn't a surprise to anyone. Going one step further, Ricardo ensured that when the company recovered and started to do better, the salaries get restored to previous levels and any loss in between paid back in the form of bonus.


Even with today's crisis, we all believe (and hope) that this phase is temporary, and things will go back to normal. The economy will start looking up. Factories will start producing to their capacity. Consumers will get back the buying power and start purchasing nonessential goods as much as the essential. The stock markets will reach their past glory and even create new highs.


A real test of the Corporate world will be when all this happens. Will the Board-rooms slide back to their obsession with profits and play for the "streets"? Will the corner offices continue to get their handsome bonuses when the "shop-floor" lose jobs? Will the reduced pay become a new baseline for employees, and other cost controls get introduced, putting more pressure on them? Or will CEOs pledge that once their business goes back to normal, they will restore everyone's salaries to the pre-COVID19 level?


What Ricardo Semler did a couple of decades back is undoubtedly a hard thing to do. But it's not impossible. Even today, CEOs can achieve this if they are determined to do the right thing. With some help, they can build a sustainable organization. COVID-19 has sensitized organizations and brought people together in sharing the pain. But now, whether it will be “Pandemic we share, Profits I pocket” or we can make "Share the pain and gain " a new normal. It’s up to us.

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Semocostyle Institute India LLP,Bengaluru, India.  All Rights Reserved