This is a post about ethics more than it is about sales.

Look at Lance Armstrong, arguably the world’s greatest cyclist. A cancer survivor. Doper. Completely ignored the drug testing people, could not care about them. They in turn left him alone. Lance had a private doping doctor. An amazing fighter – who is now being forced to give up. He is giving up, albeit unwillingly.

Look at Lehman Brothers, arguably one of the top Merchant / Investment bankers. Long history. Great Networking includes best of the people in the networking game. No respect for SEC. Fixing regulators not too much of an issue. They also knew all the Rules of the Game. Leveraged 1:140, wrote derivative positions, borrowed short and lent long – almost broke all rules of the game. One day they just lost it.

Look at the sales function. Agents mis-sell and think it is their right. Top notch companies, so called blue blooded ones encourage it. Name the company and you can get examples of violations. Husband selling on wife’s agency is NOT even seen as a violation. ‘Pass-back’ is illegal only in the IRDA’s imagination. The private sector players say ‘Ask LIC to stop first’. Sales people of course do whatever it takes to achieve sales. Products are tweaked to suit mis-selling (and of course mis-buying). Management chuckles when the awards are given, rules are flouted. CXO says ‘what to do Subra…everybody is doing it’. It sucks. Sales guys are rewarded on ONLY one number: ‘how profitable was the sale’. Nothing else matters. Quality of sales? not even measured. Regulator? he as usual speaks in the language of the strongest player.

What happens when people like Lance, companies like Lehman, and these ‘salesmen’ operate?

The people who live by the rules leave. Ayn Rand says this in her book does she not? When the fixers start ruling the good people have a choice – lower the ethical standards or quit. They choose to quit.

This is sad. The best guys go and choose do something else, they cannot afford to reduce the standards – it is just not done. Careers are destroyed. Crime prevails. Chaos rules. Satan Rules.

When Lehman crashes, or Lance is crucified….no tears are shed for them. However some of the people who were right, feel vindicated. If you came second in the Tour De France you have a right to cry, or blame Karma.

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  1. Hi,

    Subra sir even though we know that a saleman is doing mis-selling is there any place where we can complain against him?
    unless there is fear that someone is watching and action will be taken if they do wrong saleman will continue to do mis-selling beacause they know a customer cannot do any harm to them even if he becomes aware of mis-selling later.

  2. It’s good to be back as a ‘commenter’ after a gap. No one would have missed me but I missed my own comments:-)

    Even the awards presented by business media, fund houses, wealth forums are all based on how well you sell- it’s quantity that counts. There is no way to measure quality and no one is interested in the same too. Institutions say, what is the use of quality if it does not give short term numbers?!.

    In insurance selling, MDRT is considered as a big achievement. By selling only term insurance, one can never get into MDRT. Again quantity counts. MDRT holders have passport stamping from even 30+ countries. Whose money?

  3. srk

    ‘unless there is fear that someone is watching’ itself is amusing to me. Right and Wrong is a choice. Somebody watching or not does not decide between R and W. Sad.

    You can complain to IRDA, media,, ……and hope sense prevails…

  4. Our next door neighbour for the past 5+ yrs is MDRT holder. And we escaped being snared 🙂 Now they have given up on us but it was very difficult initially.Every conversation (even with our guests) used to end at insurance policy like the story of the cow and the student.Talk of single-mindedness.

  5. “Right and Wrong is a choice. Somebody watching or not does not decide between R and W”

    true right and wrong is a choice but not in case of mis-selling its always wrong.
    and when say watching i mean there should be some agency to regulate distributors.
    one can complain to IRDA in cases of insurance but what about other products where mis-selling happens

  6. “The people who live by the rules leave”

    Where do they go? There is not any place where they can go. Sadly, in every profession or business, you will come across people who break rules, more or less.

    May be you tone down your expectations, sacrifice quantity and try to give quality.

    Unfortunately in most professions, if you do not have a minimum quantity, your quality of service is going to suffer. You simply do not get enough experience if you do not have quantity.

    I have not found answer to this dilemma.

  7. Sachin Fund management in the real sense has enough demand. Few competent people do that. I have friends who handle 200-500 crores. Surely they make Rs. 1-10 crores a year, not bad right? No sales target, no brokerage target only WEALTH target…

  8. Sachin if the excuse is ‘there is no place to go’ then u cannot go anywhere, right? there are good salesmen, cheating salesmen, great salesmen. Similarly you can change professions – go from sales to ops, tons and tons of opportunities…

  9. Mis-selling is everywhere – real estate, pharma, Retail, whatever u name it. Even road side veg vendor says the fruits are fresh. Sales guys says IT IS THEIR JOB!!! But we had to check and decide whether to buy or not. So it’s buyer who had to beware.

    Subra sir at least u r preaching to ppl who want hear & learn.

  10. By a weird coincidence, I find the same thing to be true of driving on Mumbai roads. Poor driving combined with bad roads bring out the worst in Mumbai drivers. When one gets away with rash or negligent driving time and again, even the good drivers feel cheated. The urge to cut the gap, add an additional ‘lane’ at the signal, overtaking from the left, and driving on the wrong side just to overtake a few vehicles is turning even the most decent drivers to the dark side.

    Case of bad money drives out good money.

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