Wake up call for businesses

As we see the unraveling of Satyam…maytaS…i.e. the reversing of Satyam, there are some learnings from a due diligence perspective. It is surprising that a case of this size has escaped notice for several years. Maybe it is time for the general public also to step up vigilance, so that all the people are not fooled all the time.

There are some practices which are typically followed, such as review of past financials and business performance, reviewing management policies, looking at churn of employees etc. In addition, there are some learnings from the Satyam Saga. Below are some initial thoughts to trigger thinking:

  • Looking for signals: Signals of what could happen are often visible, for those that want to see. In the case of Satyam and Maytas (A key Satyam Group company), one warning signal was the breaking of the link between Delhi Metro and the Hyderabad Metro project a few months back. Maytas was one of the key members in the Hyderabad Metro project. The Chief of Delhi Metro hadstrongly come out against practices of Maytas; this was in the public domain and widely reported in the press.
  • Outsourcing our thinking: Many times, we get some expert reports and go by these and do not do our individual thinking. We tend to believe what is reported in media and get influenced by awards and accolades. Satyam did get several awards in the past. Before having a blind belief, we need to do our own thinking and not get carried away by expert opinions and reports. i.e. we cannot outsource our thinking.
  • Seeing beyond one dimension: We tend to be carried away by big names and power and particularly money power. We are in many ways one-dimensional. When we are students, the dimension is marks. We automatically associate high marks with intelligence. When we are adults, we tend to associate prestige with money and display of wealth. Probably we can consciously look at the other dimensions in business, not just the quantity of performance, but the quality too?
  • Believing that business and ethics can go hand-in-hand: There is perception amongst some that business cannot be done in a value based manner. It is now time to relook at the basic assumptions re how business can be done as the world is getting flatter and more transparent. The way business is being done is different today as compared to even a decade ago. Perhaps the leaders in business in the future will be those that uphold ethics and corporate governance? Whom are we choosing to align with?

It is a time for stock take as an entrepreneur. What is the message you are sending your employees and customers? What is the message you would you like to send out? How do you want to do this? It is not easy, but then, entrepreneurship is about making tough choices.

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About Anjana Vivek 45 Articles
Anjana Vivek, Advisor, Independent Director, Professor, Author, Mentor

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