Punch cartoon (1907); illustrates the unpopularity amongst Punch readers of a proposed 1907 income tax by the Labour Party in the United Kingdom. (Photo credit: Wikipedia)
Today, the news told me that the in the UK, our Treasury lost £42bn through tax fraud, avoidance and underpayment of income tax. This means that our public services, already in the red, will lose out when the next round of funding is again, pared down. £5.8bn should have been paid in tax by people under-declaring their earnings on tax self-assessment forms. People who are paid ‘cash in hand‘ managed to evade £1.3bn in tax and those working second jobs without declaring them, got away with not paying £1.8bn. And that’s just the individuals. Limited companies were even better at dodging tax bills, to the tune of £6.9bn! (Figures from The Independent) This dishonesty worries me. It’s not a joke to fiddle the Treasury, even if they fiddle us, and we know that corruption is a two way street, but that doesn’t make it right.
In business reputation is everything and that means being straight with everyone you have dealings with. I would say that integrity is a very necessary component. It builds trust. In these difficult financial times you must feel you are dealing with an organisation that works to an ethical code, has built a reputation for this and is reliable and honest. Tax evasion, once discovered and publicised, will not help.
Finding the way to make your contact with clients, staff and others as honest as you can, will be challenging. Avoiding tax, making unrealistic promises about deadlines or expectations, denying that things are going pear shaped are all ways to make an organisations fail and lose a previously good reputation. Competitors are out there, waiting for the next mistake.
Honesty in business is the only way to create trust. But what sort of honesty? It is comparable to the honesty we promote in out own personal lives? Once, there was a notion that business was like a card game and standards were different. A statement in the Harvard Business Review, January 1968 was entitled ‘Is Business Bluffing Ethical?’ Albert Carr, the author put forward his theses that some measure of deceit was pretty much acceptable. He wrote: ‘Executives from time to time are almost compelled, in the interest of their companies or themselves to practice some sort of deception when in negotiation with customers, dealers, labour unions, government officials or even other departments of their companies. By conscious misstatements, concealment of pertinent facts, or exaggeration – in short, by bluffing – they seek to persuade others to agree with them.’ You had to play the game and if you didn’t…
But, I hear you say, there must be times when telling the complete and utter truth is not appropriate? You wouldn’t tell a mate that her new dress didn’t fit her and she looked ungainly and fat in it, would you? Maybe you would. But you might suggest she wears something warmer, cooler, more conservative, with a jacket? In business, could tact sometimes become little white lies? Establishing when this is apt is the secret. Clarity is a priority because it is only one step from all that careful tactfulness to telling downright lies.
Where staff are concerned, how open should you be? Giving away every last detail is not a good plan, especially when things start to unravel. Uncertainty is threatening and while every business goes through periods of doubt, employees like to feel that it will succeed in the long run. A vision is crucial when times are hard. Openness in meetings creates a sense of working together and sharing the good and bad times. Every business has its bad times. A workforce who work in an atmosphere of trust and inclusion, will be ready to be there when the chips are down. The payoff is respect and loyalty. And I believe it encourages creative thinking in a workforce. Resolving problems may need confrontation. But this can be creative, too. In a safe open arena, anything can be discussed. Even if bad news is the outcome.
There are so many good things that come out of honesty that it is hard to believe that some people will discount it. The current global culture of seeing what you can get away with, for as long as you can get away with it, has to change. For some time now, corruption and dishonesty have been seen as acceptable. Look at the Murdoch scandal. And it permeates down through society, so that smaller businesses and even Councils find ways of ‘getting away with it’, be it tax evasion or secret hand-outs to get planning applications passed.
Finally, it’s as well to remember that clients can be dishonest, too. Making promises to honour contracts and then pulling out a day before those contracts are signed, or refusing to honour a contract, with all the time and costs that might incur in the courts, is often seen as acceptable. It’s not. All good relationships are based on trust and business is no different. It can only thrive and prosper when there is a true belief that what one is doing is truthful.
