“This is not who we are — it’s not how we do business”
Why admitting corporate detachment from what a business really does, is more damning than defence
Followers of bad responses to crisis will have enjoyed the line Centrica Plc, the owner of utility company British Gas, provided to The Times’ astonishing allegation that the company “routinely sends debt collectors to break into customers’ homes and force-fit pay-as-you-go meters, even when they are known to have extreme vulnerabilities”.
On the face of it the line “this is not who we are — it’s not how we do business” is an appealing sentiment. In the face of an objectively horrendous and dehumanising story which will attract moral outrage, it shows those responding for business to be on the right side of the issue and a sympathetic voice.
Except of course, the dehumanising story is who they are, and breaking into vulnerable people’s homes is how they do business, because that is the reality of an encounter with British Gas for those The Times says include single parents to young children and those with severe mental and physical illness. What should alarm shareholders and other stakeholders is that the central management and teams responding to the allegations don’t recognise it.
It is a common occurrence in large businesses. When General Motors faced allegations of widespread and institutional racism at an Ohio plant, there it was again – “we have zero tolerance for discrimination – this is not who we are”. Several lawsuits were founded on individuals for whom it is exactly who the business was.
Consistently some of the worst corporate behaviour – and worst responses to reputation issues – come from businesses where the corporate centre is completely detached from the operational reality of what the business does. It is no doubt a heartfelt response from a board, a legal and a comms team who have worked on a set of values they believe their business operates by to think that an issue “isn’t who we are”.
Yet once a business becomes incredibly large with long reporting channels, long reporting lines and layer upon layer of targets and objectives, the centre and those writing the values soon lose the ability to dictate how those targets are met. It’s for precisely this reason that laws around corporate governance have evolved to create failure to prevent offences – in the UK first bribery, now fraud – to enforce accountability for businesses that set targets those outside the corporate centre choose to, or can only, meet through unlawful means. For the corporate HQ it ceases to be a defence to argue that this too is also not who they are.
Shareholders in a competitive energy market may wish there was a failure to prevent offence for spotting behaviour that is an obvious reputation risk. The answer for those who want to do better is to stop falling back onto corporate values bullshit, and look instead as a business at who you really are and how you really do business, and then decide whether you like it.