Ten Obstacles to Building a Centennial Enterprise-World Credit Organization
Ten obstacles to building a century-old enterprise
Six Enterprises cannot prevent the crisis brought about by leadership change.
Seven companies cannot discover crises and changes in customer needs at the fastest speed.
Eight companies cannot prevent moral hazard and moral torture.
Nine Enterprises cannot prevent the crisis caused by the dishonesty of internal employees.
Ten Enterprises cannot effectively prevent the crisis caused by wrong systems.
The first major obstacle The decision-making level of the enterprise lacks the confidence to build a century-old enterprise.
Brief analysis: The decision-makers have no confidence or no confidence in the social environment, lack of belief, think that it is impossible to build a century-old enterprise, and are discouraged from building a century-old enterprise. Objectively speaking, building a century-old enterprise is indeed a difficult task. It requires more dedication, long-term persistence, perseverance, and the courage to be the first to eat crabs.
Practical harm: The decision-makers of the company lack the confidence to build a century-old company, making it difficult for the company to pursue the goal of building a century-old company, and it is difficult to become a century-old company.
ICE8000 solution: ICE8000 system stimulates and guides the decision-making level of the enterprise to establish the determination and perseverance to build a century-old enterprise through the integrity management system and integrity culture construction, and finally gains confidence and belief.
In addition, through the analysis of the social development trend in the WTO era by credit experts, the confidence of corporate decision-makers in the social environment will be enhanced.
Finally, units that pass the ICE8000 assessment or rating can join the International Integrity Enterprise Association [ICEA], and the association's mutual assistance mechanism can also enhance the ability of enterprises to fight non-market risks and enhance the confidence of corporate decision-makers in the social environment.
The relationship between determination, perseverance and confidence is as follows:
The second biggest obstacle The decision-making level of the enterprise lacks the concept of integrity and social responsibility.
Brief analysis: Honesty is a necessary condition for the long-term development of an enterprise. We conducted research on more than 100 century-old brand companies around the world, and found that their management mechanisms, corporate cultures, and business models have different characteristics, and their methods of dealing with competitors are also different, but they have one thing in common: respect for customers, cooperation Partners, investors, and employees are always honest.
Development economics believes that the economical take-off of a country or region requires entrepreneurial resources. The two essential characteristics of entrepreneurs are: first, a sense of social responsibility; second, a pioneering and innovative spirit.
The actual harm is:
1. Enterprises that lack the concept of integrity and social responsibility often do not hesitate to harm the legitimate interests of others and seek interests in violation of the principles of social justice. Once this behavior is known to the society, the development of the enterprise will be severely damaged, and it is difficult to build a century-old enterprise.
2. Enterprises that lack the concept of integrity and social responsibility cannot gather talents with the concept of integrity and social responsibility. The larger the enterprise develops, the more moral risks and management loopholes will be accumulated. Employees without the concept of integrity and social responsibility will follow the example of the enterprise. Legitimate behaviors infringe on the interests of the enterprise from different angles, causing the enterprise to be in crisis, and it is difficult to build a century-old enterprise.
ICE8000 solution: The social responsibility and professional ethics guarantee mechanism of the ICE8000 international credit standard system and the trustworthiness mechanism can not only enhance the social responsibility of the decision-making level of the enterprise, but also make it difficult for the enterprise to make violations of social responsibility. The matter effectively and systematically solves this problem.
The third major obstacle Enterprises do not have clear core values and social mission.
Brief analysis: Core values and organizational mission are indispensable motivations for the sustainable development of enterprises. Many outstanding companies in the world have clearly established core values and social missions that are in line with social public interests, public morals, or promote social progress, and they are committed to implementing them. For example: the three traditions advocated by General Electric are "Insist on integrity, focus on performance, and desire for change"; the seven spirits of Panasonic Electric "serve the country by industry, be aboveboard, unite as one, strive upward, be polite and humble, adapt to the times, and be grateful"; Wal-Mart's basic beliefs "Respect every employee, serve every customer, and pursue excellence every day"; Nokia's value is "people-oriented science and technology"; the horizontal plaque of "abstinence from bullying" of Hangzhou Huqingyutang Pharmacy, founded in 1874, reads "Pharmaceuticals are related to life, especially Don't be bullied", "Purchasing is realistic, manufacturing is refined" and so on.
When Daft discussed the corporate social benefit evaluation system in "Principles of Management", he divided all corporate social responsibilities into five levels, as shown in the figure below.
1. Enterprises with the economic responsibility of profit as their core value and social mission generally adhere to the business philosophy of "making money at all costs". Often, while making money, there is a risk of bankruptcy. Such enterprises can become stronger and bigger for a while, but It is difficult to grow long. Generally, when they reach the goal of becoming bigger, they start to decline. Managers who are determined to build a century-old enterprise should not pursue this core value and social mission.
2. Companies that take the legal responsibility of abiding by the law as their core value and social mission will generally make full use of loopholes or imperfections in the law to evade their responsibilities. For example, some companies do not need to pay huge mental damage fees after seeing the harm to consumers in China , so deliberately reduce product quality and performance. Such enterprises will also have excellent self-discipline and performance in a society with a sound heteronomy mechanism. However, in a society where the heteronomy mechanism is not sound, such enterprises often do things that are not illegal but not just for the purpose of pursuing profit.
3. An enterprise that takes ethical responsibility as its core value and social mission, engages in a legitimate business and avoids harming others and the society will surely gain the trust and respect of customers and the society, and can attract and bring together honest talents to form long-term core competitiveness , so as to achieve the goal of "becoming stronger, bigger and longer".
4. An enterprise whose core value and social mission is to improve the quality of life of the society and human beings will never return after setbacks. Its efforts will surely win the trust and respect of customers and the society. Excellent people do extraordinary things and form long-term core competitiveness, so as to achieve the goal of "becoming stronger, bigger, and longer".
The actual harm is:
1. Enterprises do not have a clear social mission and core values, and cannot gather suitable talents. Excellent talents always yearn to work in companies whose corporate mission and core values are in line with their own life goals and value orientation. Only in this way can they have a sense of accomplishment and stimulate their potential.
2. Enterprises do not have clear core values and social missions, and cannot resist the third temptation. To build a century-old enterprise, you must have determination. Enterprise development is faced with three motivations, as shown in the figure below:
We also call it the third temptation. Because the motivation ① and the motivation ② are on an upward straight line, the development goal of the enterprise is clear and the motivation is full. Enterprises whose corporate mission (motivation ①) is not clear or correct are often unable to resist the third temptation (motivation ③), and eventually walk out of a slanted line, making it difficult to become a century-old enterprise. In fact, companies without corporate mission (motivation ①) are in the third, fourth and other countless temptations all day long. They often go out of many curves and go bankrupt in constant choices.
We can use a realistic example to illustrate that there are two food companies that started at the same level. The first company did not establish a clear core value and social mission, and the decision-makers completely aimed at economic profit. Therefore, when the company found that real estate was profitable, it invested in the real estate industry; when it found that health care products were profitable, it invested in health care products. Up to now, the company's main food business is no longer competitive, and the entire company is on the verge of bankruptcy. The second company has established the corporate mission of "working hard to improve the quality of people's food". With this clear goal, although the food industry is slightly profitable compared with real estate and other industries, the decision-makers resisted the third temptation. Now the company is in In 2004, the sales volume exceeded 10 billion yuan, and it has alreadyThe food industry is extremely competitive.
3. Enterprises do not have clear core values and social missions, and cannot properly handle extraordinary affairs. For some affairs, the handling methods and procedures have not been stipulated in the enterprise system, and employees have no basis and reference for decision-making when dealing with them. Taking the second food company mentioned above as an example, a grassroots employee found that the additive used by the company had been eliminated internationally, and another additive was more beneficial to people's health. In order to pursue the corporate social mission of "working hard to improve the quality of people's food", this employee leapfrogged to write a suggestion letter to the company's leaders. After receiving the letter, a vice president immediately conducted research and investigation, and did not ask for information about his overseas experience after confirmation. The president immediately replaced the additive. The use of new additives increases costs and reduces profits for enterprises. After returning to China, the president did not criticize the vice president for exceeding his authority, but praised the practice of suggesting that employees and vice presidents take the corporate mission as the basis for their work and decision-making.
ICE8000 solution: ICE8000 international credit standard system integrity certification clearly requires and helps enterprises establish core values and social missions that are in line with social public interests, public morals, or promote social progress, and use institutionalized means to continuously strengthen.
The fourth major obstacle Enterprises lack a system to effectively guarantee, improve and accumulate credibility method.
Brief analysis: Ensuring credibility is the premise and basis for improving and accumulating credibility. The real basis of customer choice is credibility, not popularity. Because popularity can represent credibility to a certain extent in a certain period of time, many companies mistakenly confuse popularity with credibility.
Due to the differences in the real motives and management systems of enterprises, the relationship between enterprise popularity and credibility can be divided into the following four models, as shown in the figure:
Note: The arrow points to "high" (the same below).
A mode B mode
C mode D mode
Pattern A is the least desirable. The development of his popularity and credibility is opposite. The higher the popularity, the lower the credibility. This is a vicious circle, but in reality there are many such companies, and they often extremely underestimate public wisdom and do not respect customers. They do not strive to improve the quality of products and services, but rely on a large amount of advertising expenditure and commercial hype to attract customers, and customers shouted that they were fooled after purchasing the goods. This model cannot build a century-old enterprise. Enterprises adopting this model are all thinking of buying and selling with one hammer. Many of these companies have closed down or are in the process of closing down.
B mode is also not advisable. Due to its imperfect or unscientific management system, the credibility and popularity have not been accumulated simultaneously, and the role of advertising fees has not been fully reflected.
C mode is preferable. Due to its scientific and perfect management system, its credibility and popularity have risen simultaneously. It is suitable for enterprises with sufficient funds and large advertising expenses.
D mode is also desirable. It relies on honesty to bring value-added experience to customers, and the word-of-mouth communication brought about by this credibility has increased its popularity. This model is suitable for businesses with low capital or low advertising spend.
Practical harm:
The lack of effective methods to ensure credibility, improve credibility and accumulate credibility will make the company's products uncompetitive, and will also cause the funds to be used ineffectively, and may also cause the capital chain to break and fall into a vicious circle .
ICE8000 Solution:
The ICE8000 international credit standard system establishes the credit mechanism, the integrity asset accumulation mechanism, and the risk prevention mechanism for dishonesty effectively solve this problem systematically.
Fifth Obstacle Companies do not have a systematic approach to prevent risks such as accounts receivable.
Brief analysis: It is not acceptable for an enterprise not to sell on credit, but it is also not acceptable to sell on credit improperly.
Three stages of accounts receivable management:
In addition to accounts receivable, enterprises also have various risks, which require a scientific and reasonable procedure to identify them in a timely manner and formulate corresponding preventive measures.
Practical harm:
1. Without a systematic management method for accounts receivable, blindly eliminating credit sales will affect product competitiveness, and improper credit sales will cause enterprises to fall into trouble due to excessive arrears.
2. Without a risk identification and prevention system, it is impossible to discover and respond to various risks in a timely manner.
ICE8000 Solution:
The ICE8000 international credit standard system's credit risk prevention mechanism has effectively and systematically solved this problem.
Sixth Obstacle Companies cannot prevent the crisis caused by leadership change.
Brief analysis: Many well-developed companies have declined due to the change of leaders, and eventually failed to become century-old companies. Human life and career cycles are limited, and building a century-old enterprise will inevitably encounter the crisis of leadership replacement.
The personal charisma and characteristics of leaders can help enterprises succeed in entrepreneurship, and can also help enterprises develop rapidly in a certain period of time, but the personal charisma and characteristics of leaders are not inheritable and reproducible. The goal cannot be sustained here. If leaders want to build a century-old enterprise, they should strive to eliminate the dependence of enterprise development on their own personal charm and characteristics within their own business cycle, and establish a self-improving, inheritable management system and integrity culture.
Practical harm:
Leadership replacement crisis will affect the sustainable development of enterprises and the realization of century-old corporate goals.
The figure below illustrates the relationship between the enterprise's dependence on the leader's personal charisma and traits, the enterprise's dependence on the system, and the crisis of leadership replacement. The higher the company's reliance on charismatic traits of leaders, the greater the crisis of leadership turnover. The higher the enterprise's dependence on the system, the lower the dependence on the leader's personal charisma, and the lower the leader's replacement crisis.
ICE8000 Solution:
ICE8000 International Credit Standard System Integrity Certification establishes a complete set of self-improvement and inheritable management system and integrity culture for enterprises. crisis.
Seventh Obstacle Companies cannot detect crises and changes in customer needs as quickly as possible.
A brief analysis:
Hayne's law in management science points out that all crises of an enterprise often have signs before they occur. Even if a crisis has already occurred, the best time to eliminate the crisis is when the crisis has just occurred. The quickest detection of a crisis can reduce losses.
Customer demand is the reason for product upgrading and the reason for new products and new industries. Discovering customer needs is equivalent to discovering new business opportunities and development opportunities. The fastest to discover customer needs is the fastest to discover opportunities.
To sum up, crisis information and customer demand information are extremely important to the development of an enterprise. However, crisis information and customer demand information often reside in complaint and suggestion information, but because complaint and suggestion information will have an impact on the interests of internal employees, it is most likely to be misinterpreted and intercepted.
The following figure is the information flow diagram of the enterprise.
Practical harm:
The inability to quickly discover the crisis will cause the enterprise to lose the best opportunity to solve the crisis; the inability to quickly discover customer needs will cause the enterprise to lose development opportunities.
ICE8000 Solution:
The ICE8000 international credit standard system information rapid communication and crisis management mechanism effectively and systematically solve this problem. The information flow diagram of enterprises that have passed the assessment of the ICE8000 international credit standard system is as follows. When the complaint suggests that the information is misinterpreted, it can be passed up through the credit department.
Eighth ObstacleCompanies cannot prevent moral hazard and moral torture.
A brief analysis: The concepts of moral hazard and moral torture
1. Moral hazard is a concept commonly used in management and economics. It refers to the possibility that an organization (referring to a unit or individual, the same below) will cause loss of interests to others or society due to violation of morality. Moral hazard is often caused by information asymmetry, rewards and punishmentsSymmetry and asymmetry of rights and responsibilities.
For example: Zhang San entrusts Li Si to buy 10 tons of flour, and he pays Li Si at the price of 2,000 yuan per ton, because Zhang San does not know the quality and price of flour, so when Li Si buys flour, he It is possible to deliberately buy 1,800 yuan/ton of low-quality flour in violation of morality, and let the merchant issue an invoice at 2,000 yuan/ton. If Li Si violates morality, he will receive 2,000 yuan of improper income. 2,000 yuan is a moral hazard for Zhang San.
2. Moral torture is a new concept put forward by the World Credit Organization [WCO] in integrity management. It is produced when people face moral hazards (whether to abide by morality and give up improper benefits, or to obtain improper benefits in violation of morality) of) psychological conflict.
People have a moral standard (whether the standard is high or not, people have the nature of pursuing justice) and consciously abide by it. When the system is flawed, if people violate their own moral standard, they can get illegal or illegal legitimate interests, and the chances of being discovered or held accountable are very small. In this case, people will face a dilemma, that is, the choice of whether to abide by morality or obtain illegal (or improper) interests. This choice makes people feel Pain, the World Credit Organization [WCO] calls this kind of psychological conflict moral torture, which is the product of the conflict between normal self-interest in human nature and human moral standards.
A person faces moral torture. If he chooses to abide by morality, he will not be reconciled to the benefits he can get. If he finds that other people have obtained such benefits, he will feel even more psychologically unbalanced; if he chooses Gaining illegal (or improper) benefits by giving up morality, he will have anxiety caused by guilt or fear. After this anxiety intensifies, he will become numb and empty, without happiness, and he will seek stimulation to obtain Happiness, but only superficial happiness and no real happiness. In addition, those who fall into moral torture and choose illegal (or inappropriate) interests, in order to increase their sense of security, will hope and guide others to make the same choice, but this behavior will conflict with their moral standards again, and after gaining temporary security At the same time, the sense of accomplishment and happiness is greatly reduced. In short, when people encounter moral torture, whether they choose to abide by morality or choose to obtain illegal (or improper) benefits, it will make people feel pain or anxiety, and affect their sense of happiness and achievement. In the face of moral torture, the higher the moral standard of the self, the greater the pain or anxiety.
Take the above example of Zhang San entrusting Li Si to buy flour. When Li Si buys flour, he assumes that Li Si is a moral person. If you buy 1,800 yuan/ton of flour, you will lose 2,000 yuan in benefits; if you buy 1,800 yuan/ton of flour, you will violate your own morality.
The relationship between personal moral standards, system defects and moral torture faced by individuals is as follows:
Next, let's analyze the relationship between moral torture and personal happiness index.
Facing moral torture, if people choose to abide by morality, people will not be reconciled to the benefits they can get. If they find that other people have obtained such benefits, people will feel even more psychologically unbalanced; With illicit interests, people will have a sense of guilt or fear. After this anxiety intensifies, people will become numb and empty, with no sense of happiness in their hearts, and then they will seek happiness by pursuing stimulation, but this is only on the surface Happiness without real happiness. In addition, people who fall into moral hazard and choose improper interests, in order to increase their sense of security, will hope and guide others to make the same choice as themselves, but this kind of behavior will conflict with their moral standards again. , which again increased the sense of guilt. In short, when people encounter moral torture, whether they choose to abide by morality or choose to obtain improper benefits, it will make people feel pain or anxiety, and affect their sense of happiness and achievement. In the face of moral hazard, the higher the self's moral standards, the greater the pain or uneasiness.
The relationship between personal moral standards, personal moral torture, and personal happiness index is as follows:
Practical harm:
1. Moral hazard and moral torture reduce the happiness index of employees and affect their physical and mental health.
2. Moral hazard and moral torture force excellent employees to lower their moral standards.
3. Moral hazard and moral torture lead to the reverse elimination of talents, forcing outstanding talents to leave the company.
4. Moral hazard and moral torture will promote the increase or concealment of system defects, and exacerbate unhealthy and corrupt behaviors.
5. If moral hazard and moral torture are not eliminated, the enterprise will eventually lose its righteousness, vitality and competitiveness, and will not be able to become a century-old enterprise.
ICE8000 solution: The way to reduce moral hazard and moral torture is to eliminate the defects of the system and reduce the opportunity for employees to encroach on the interests of the enterprise; Under the circumstances, they dare not encroach on the interests of the enterprise. The ICE8000 system systematically avoids moral hazard and moral torture for staff within the organization, increases and guarantees the happiness index of staff while curbing and eradicating corruption.
The Ninth Obstacle Companies cannot prevent the crisis caused by internal employee dishonesty.
Brief analysis: Human risk is one of the biggest risks in the development of an enterprise, such as: employees leak or sell corporate business secrets; Mountain tops; employees and customers colluded with customers to use credit sales to embezzle corporate assets; employees' irresponsible work caused major accidents; It can be said that the risk of employee dishonesty runs through all risks of the enterprise.
Practical harm: If the risk of employee dishonesty is not resolved, it will be difficult for all other risk prevention systems to effectively exert their effectiveness.
ICE8000 Solution:
1. Establish a personnel system for all employees to establish personal credit files. Requirements: All employees have a personal integrity level of B-level or above (including B-level), and attach a "+" sign. Promote self-discipline with social heteronomy.
2. If necessary, formulate a work ability training plan and actively implement it to ensure that the ability of the staff meets the job requirements.
3. Formulate a credit culture construction plan and actively implement it to ensure that staff have professional ethics and professionalism.
4. Clarify the reward and punishment measures in the system.
5. Prevent employees from facing moral hazard in system construction.
6. Use the information communication mechanism to discover and correct staff mistakes in a timely manner.
The Tenth Obstacle Enterprises cannot effectively prevent the crisis caused by the wrong system.
Brief analysis: Looking at ancient times and today, there are two failures in the world, one failure is due to the system. When people have problems, even the best system may also have problems. But the biggest failure is when summing up the reasons for failure, blaming the system for failures due to people, or blaming people for failures due to the system, which may cause new failures.
Practical harm: There is no absolutely perfect system, and if the wrong system is not improved and corrected in time, it will bring crisis to the development of the enterprise.
ICE8000 solution: The ICE8000 international credit standard system requires regular and irregular evaluation and improvement of the system, and the information rapid feedback mechanism of the ICE8000 international credit standard system will find a certain errors or imperfections in the system.
The above content is excerpted from: "Building an Integrity Unit——Risk Control and Integrity Management" (by Fang Bangjian)
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