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What do corporate awards really signify?

I wrote this in 2009: “I am about to lose quite a few friends with my next sentence, but here goes anyway. I don’t believe in corporate awards; I think they are shallow, fickle and pointless, and we should not pay too much attention to them.”

I once worked for a large professional services firm that ran an annual corporate awards programme. It would run a survey to ascertain the most respected company and CEO every year. This would culminate in a glittering annual ceremony to name the winners.

As a senior member of the firm, I was expected to attend this ceremony and participate in the function. I pretty much never did. My contrarian attitude probably didn’t do me much good, but I couldn’t make myself participate in something I thought so little of.

Years later, Imperial Bank has collapsed here in Kenya, and shows little sign of being revived. It has been exposed as running a massive fraud on its depositors. But go to its website and you will still see a prominent page listing all the awards the bank gathered over the years. You will see there, count with me, no fewer than 29 gongs received. Including, wait for it, awards for financial reporting and presentation of accounts.

The fact that an enterprise that was running a parallel bank and presenting utterly misleading financial statements to the world was able to win awards for those things tells you all you need to know about the award-giving. It tells you how exactly how seriously companies are analysed and assessed in order to win these awards.

In the days I began objecting to corporate awards ceremonies, they were a rarity. Now they are an industry in themselves. Pretty much everyone and his uncle purports to offer awards. And now, because everyone must feel like a winner, there is a multiplicity of awards in every programme for even the most feeble accomplishments.

The sad truth about most of these awards? They are sponsored by the very group of companies that then become eligible for the awards. There is often little analysis done, and the award is rotated amongst the key supporters of the programme. The winners will mostly be leading organizations that the award-giver has a vested interest in applauding. And the awards ceremonies themselves, as I wrote years back, are just shoulder-rubbing events where people go to see and be seen, a chance to inject glamour into the humdrum of business life. They rarely have any more depth than that.

But I have objections beyond the mere shallowness of the enterprise. First, awards can be used to bestow a false credibility to corporations. Those who are up to no good are often the most keen to win these awards and get applause for good corporate citizenship. They will parade the awards prominently in their reception areas and on their websites. In some cases they are no more than masks, used to delude potential investors, create frothy feel-good for employees, and distract regulators.

Secondly, what exactly do we award? Success in a given year in a particular achievement? What’s the big deal with that? Anyone can flare like a comet and then burn out. As we’ve seen, companies can be celebrated one year (when they’re booming) and be derided the next (when they’re imploding) for doing exactly the same things. This is because a very significant part of business success comes from sheer luck: being in the right place at the right time. Much short-lived success also comes from exploiting monopolistic positions, or even from outright malfeasance. Do we want to celebrate those things?

My third major objection is this: a good business actually has no need for external awards. They are superfluous. A genuine, sustained track record will tell anyone anything they need to know. A business has three core constituencies: its customers, its employees and its shareholders. All three reward the enterprise (if it deserves it) by sticking with it. Those are the only awards needed: the loyalty of customers, staff and investors. Those awards are given because real value is created in return for the givers. No fancy ceremony is needed, and no winner’s speech.

If the company is duping its customers, pulling a veil over the eyes of its employees and conning its shareholders, however, no trophy cabinet will save it. The end will come. That’s how business works. If you do it right, you survive. If you mess it up, you don’t. We must all learn to look at sustained, honest success achieved over decades, and away from glitzy awards nights.

(Sunday Nation, 17 April 2016)

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