The High Cost of Losing Integrity and Trust

A close up of chip printed ciruits. Attribution Jack Spade, Wikimedia Commons.

The Pressure to Adapt

These days, there are enormous pressures to adapt and to conform, and sometimes succumbing to these pressures is erroneously interpreted as being ‘in step’ with the market or as responding to market needs.

There is however a great risk when doing so, if the response is reactive rather than pro-active and undermines the integrity of the company.

Let’s look at a simple example: About two decades ago, during the Silicon Valley boom, a number of IT firms were hiring very qualified and highly paid research engineers to work on developing specialty IC chips for other technology companies.

Unfortunately for some of these firms, there was a breakdown of management priorities: On the one hand, the engineering teams were focused on completing the product lines, from design to production. At the same time, the sales teams who were primarily interested in their respective commissions, bonuses and the company’s cash flow, were focused on gaining new contracts. The problem for some of these companies was that management did not require the sales teams to check in with them, prior to making new commitments for the respective companies.

For these IT companies, it had become, for all intents and purposes, a sales-run enterprise, with a lack of coherent management, with the result that engineering teams were repeatedly moved away from completing designs, and instead were asked to start over with newer, more lucrative design commitments.

Although initially, most of these companies was not in a challenging financial situation, after a while, three things happened:

1. Some of the research engineers began to quit, because they were both frustrated and concerned that the company was not really finishing anything. They moved on to companies that were better managed.

2. The turnover of staff delayed the finishing of projects and the ability of the companies to meet their commitments, even further.

3. Legal difficulties arose for these companies due to unmet deadlines and commitments. Much more serious was the fact that the companies began to develop a reputation of being unreliable, began to lose new prospects and eventually went into receivership.

What happened to these companies, which by all counts should have been very successful, was that they had lost their integrity. They allowed themselves to be managed by their sales team rather than by their management teams. It pushed aside commitments that had already been made. In a sense, the companies had lost their connection to their core and to their purpose.

Internally, the companies had lost their integrity in the eyes of their employees. The engineers that resigned to find positions elsewhere had lost trust in their respective employers. They felt that their work was not being honored or appreciated each time they were asked to discontinue the projects that they had committed to, in order to fulfill the narrow desires of the sales teams in their focus to increase their personal profits. For these engineers, the lack of integrity was disheartening and eventually led to their leaving.

Had these companies maintained a clearer sense of their own commitments and integrity, management would have had a better understanding of what was realizable and what was not, where its real commitments were and thus what the sales teams was authorized to contract. Management needed to define what was a priority, the order in which tasks were completed and as a result, what the sales teams was authorized to promise new clients.

Of course and on hindsight, it would have been better if the sales teams was required to check in with management for direction and final approval.

Instead, when each of these companies allowed their integrity to be pushed aside by the allure of new sales, they lost everything. By the time the mistake was realized, it was too late to recover.

Originally Published 2010. Copyright © 2010-2012 by Roman Oleh Yaworsky. All rights reserved.