Tan Kin Lian's Blog: Integrity and honesty

Wednesday, March 03, 2010

Integrity and honesty

Integrity is being honest. Some companies claim to serve customers, but they will find ways to make profits by overcharging customers or give them a poor deal.

It is acceptable for a company to make profit, but it has to be done in an honest and fair way. In the past, the standard of ethics and integrity was quite high. A trusted company would not destroy its reputation by telling lies or deceiving its customers.

In recent years, the standard of ethics had dropped significantly in the quest for profits or other commercial goals. This is what "being different" is now like.

Tan Kin Lian

19 comments:

Anonymous said...: In this society where power and money speak the loudest, how much does integrity and honesty cost?; March 03, 2010 8:24 AM
Anonymous said...: I'd certainly agree that integrity standards has dropped.

Performances of CEOs and managers are measured on a quarterly basis.

Little wonder that long term performance measures like customer trust and satisfaction are abandoned.

Any manager or worker that focuses on the long term performance measures will be fired (prematurely) for failing the short term performance measures.

In such an environment, you have to take the profit now, even if it means alienating the customer.

Case in point: Merger of Prudential and AIA, Straits Times, 3 March 2010, page A4.

Prudential paid US$35.5billion to acquire AIA. The market cap of Prudential is US$20.2billion (approx.)

So how to economically justify the purchase in immediate short term? Answer: Economies of scale (i.e. a bigger entity will ask for volume discounts from suppliers) and productivity improvements (eliminate duplication of operations like human resources, IT and policy servicing).

I'll leave it to your imagination about the importance of customer satisfaction (and other motherhood values) in such an environment.

The new business model believes in "buying" customers by acquiring competitors (it's faster). Not winning customers over with better service (too slow).; March 03, 2010 8:26 AM
Anonymous said...: Where got integrity and honesty these days? In fact if anyone or a company says that they believe that honesty is the best policy, this is the company to avoid quickly becuase their actions show otherwise.
They cut your bonus to buy more chairs and to spruce up their building and give their salesemen misleading titles. Why do you think they need spending money on them? Of course to fool you .; March 03, 2010 10:01 AM
C H Yak said...: Perhaps, integrity and honesty are considered "personal traits" only to be looked for in a job interview.

Trait of employees having "commercial thinking" and "inclination to seek and make profits" to support a profit maximisation model is very often viewed by organisations as traits to look for to promote an employeee.

Employees often hide under a "corporate veil" for profit maximisation to justify their wrong commercial deeds. Hence these people could be a totally differnt person in their own personal life...Double standards!

Quite often the standard of ethics dropped because of the failure of HR practices which compromise and condone this sub-standard in ethics.

Similarly unscrupulous "cost cutting" measures by corporates, particularly against own employees, are also distasteful and poor business ethics. To promote good business culture in turn, such bad internal business culture should also be avoided.; March 03, 2010 10:40 AM
Anonymous said...: Mr. Tan KL
Why does your previous company, that claim to be a social enterprise, introduce new policies that give a poor return? Are they taking care of the policyholders, or are they trying to make more profit, like AIA and Prudential?

Are they being honest to call themselves a social enterprise and behave no different from the commercial insurance companies?

They also cut the bonus for the old policies and promise to pay higher bonus on maturity. Can they be trusted to keep their word? How do I know if I am getting the right amount of bonus? Where is the transparency?

What social enterprise?; March 03, 2010 11:51 AM
jamesneo said...: NTUC is not the social enterprise it was when Mr Tan was the CEO. Its new direction is profit maximization at the expense of their old and new clients.; March 03, 2010 12:11 PM
God fearing said...: Success is measured now days by the KPI yardstick.

KPIs do not have customer satisfaction index or honesty index.

All KPIs focus on bottom line, date lines.

So just cut to the chase and just earn the money will you?

Even if the corporate mission statements say: "we believe in looking out for each other"
is meant to make life easier for the bosses.. dont need to motivate staff...it will be on auto pilot.

Name me one company that has staff happiness as a KPI for any of their managers or directors.

Name me one company that has integrity and honesty in any of their KPI for managers or directors.

They are not measurable, therefore it is never included and therefore the commercial world just relies on upbringing and religious leaders to keep everyone on the straight and narrow path.

Some find comfort and solace in donating to charities to atone for their misdeeds and greed.. well, good luck to them.; March 03, 2010 12:28 PM
CONsultant said...: I work in the business centres of the social enterprise. I can say that 99.99% of consultants will not recommend term or decreasing term. Why? Simply because of commissions, sales quotas, cash & holiday incentives.

We will mainly push Vivolife, Revosave, and regular ILP coz these give the biggest API and AFYC to earn commissions and incentives, and chalk up targets for posh dinners and holiday trips.

For such expensive par plans, our approach to customers will be based on their available budget for insurance, and not on needs. For sure these expensive policies can never be affordable if based on real insurance needs.

Let me give an example of a 30yo male. If he has a max budget of $200/month for insurance, the consultants will push him to take up Vivolife payable for 25 years. For $200/mth this policy will give him a basic cover of only $96,814.

For the consultant, he will achieve API of $200X12 = $2,400. In terms of commission, he will chalk up 40% in just the 1st year = $960. If the consultant is a field agent and not working in the biz ctrs, he will continue to get 12% commission in the 2nd year and 5% in years 3-6.

If this same 30yo male customer were to buy a DTA from the social enterprise, he can get a $1,000,000 DTA for 30 years at price of $89.50/month.

But the consultant will only get 10% yearly commission = $107.

So is it any wonder why insurance agents do not want to talk about such low-cost plans? In fact my sales managers in this social enterprise will criticise and ridicule any consultant who sells term and DTA. This is becoz the low premiums also affect the sales managers' monthly bonuses and affect their ability to qualify for holiday trips and make them look bad to the Vice President.

Some other shenanigans in the business centres are telling old customers not to surrender their policies but instead to APL it at 5.5% interest, because the Best Kept Secret promises to return them 6% and so their policies will be self-sustaining and will not lapse!!!

Often when we get leads from potential customers asking for medical insurance, many consultants will just throw their contacts into the dustbin. Becoz the commission is too low and complicated to explain the benefits, deductibles, co-insurance, medisave etc etc.

As for myself, I just tell customers to get 3 things:
Medical insurance.
Group term with CI.
Personal term or DTA.

A person can get $200K group term with CI plus $300K DTA for less than $50/mth.

Of course, I everytime cheong with my manager, and I throw one of our brochures at him wherein it states from LIA that a person shld be covered for 10X his annual salary. I tell the manager to show me his salary and to proof that he himself is using wholelife to provide this 10X cover. If he can proof to me, then I will push Vivolife.; March 03, 2010 1:42 PM
Anonymous said...: As a layman, what is Group term with CI, and what is DTA.
Thanks; March 03, 2010 4:58 PM
Anonymous said...: Anon March 03, 2010 1:42 PM,
I empathise with you. This social enterprise is encouraging commission before mission. The mission is adding value and putting customers' interest first but this social enterprise is putting self , the branch manager and the company first and the customers last. Despite that the 2009 result is worth analysing. Did you notice the API declined by as much 25% as compared to the year preceding? NTUc came in first becuase of the single premium contributed by external channels and of course the straws that broke the camel's back came from the dubious useless capital plus , a product pitched as better than bank rate. Did you know it was a gamble for ntuc to put out capital plus for sale? It was a gamble in the hope of securing the #1 position so desperately by the new FT. Did you know the sale from capital plus was NOT allowed to be considered for agents' production? You know why? Becuase it would add cost and capital plus would have been a loss proposition. But why it was considered for company's production? It is not puzzling , right? It was deliberately launched and used and exploited to capture the #1 market share.Did other companies know? of course not otherwise it would lead to disqualification.What a shame that a despicable method was used. Wonder what was the agenda?
To make history? to beat his predecessor that he is smarter? to prove that the make over social enterprise is a leading company? to prove the snake oil salesmen ans women are super dupers?.
The question remains , do the customers benefit from all these? If you ask me, it is resounding NO>>> NO. becuase the customers are dumped and saddled with rubbish products that will shackle them for life and will be damaging to their financial life.
This is the state of affair in the social enterprise. MAS should be interested to know why the guidelines to create the culture of fair dealing outcome to consumers is not implemented and not enforced instead the guidelines have been twisted to serve self interest.; March 03, 2010 6:40 PM
Anonymous said...: Hi , Insurance consultant of business centre, what do you think of the garbage in the new MFP designed by garbage collector?; March 03, 2010 7:13 PM
Anonymous said...: anonymous March 03, 2010 1:42 PM,

haha hehee, the devil never speaks the truth..the DNA helix says people before profit but the insurance agents put commission before mission.
It is confusing right? but no , not confusing , we have grown used to the style of the new FT. He speaks with two tongues, he doesn't do what he says.That is the new culture, the social entersurprise culture.; March 03, 2010 8:34 PM
Anonymous said...: LOL, couple of years down the road and this not so new Ceo is now having his own troops spilling the beans about him. I thought he would have got rid of them by now and install his new foreign thrash there by now.
Speaking with fork tongue but he managed to hoodwink our "feel rich every month" ministar. Singapore is unique indeed, where they get foreign thrash to thrash its own people... What to do, we get what we voted for...; March 03, 2010 9:42 PM
Anonymous said...: heard he is holding a beach party at siloso beach, entry pass is come in your under wears and ladies with thongs only. Alcohol will be free flowing. The life fund has a surplus of $350 millions so a pool of wine will be put up for those who are daring enough to jaccuzi in.
As for policyholders see your bonus evaporate hopefully not all so you will have some residues.; March 04, 2010 9:03 AM
Anonymous said...: Integrity and Honesty?
上梁不正下梁歪

Just look at the way how some people pervert justice and rule of law in order to stay in power.; March 04, 2010 11:39 AM
Anonymous said...: "Honesty is the best policy' or "the best kept secret" are evidence of what FT is capable of doing and doing and saying wihtout batting an eyelid. or through the teeth. Shameless and using the predecessor's backside skin for his face. LOL... haahaa haaheeheehee; March 04, 2010 2:02 PM
Anonymous said...: Dear All,

You cannot make profit by being very honest.

People makes profit through dishonest means one way or another.

Please grow up. This is what the world is today and in the future.; March 04, 2010 2:55 PM
Anonymous said...: When ntuc made claim to the best kept secret I could see Mr. Tan KL's face but somehow someone unashamedly used his back side skin for his face.
This shows people would stoop to anything and say anything to get what they want even at the loss of self pride and respect. Such was the case driven by desire to become number 1. Look at the result and its breakdown and one can see how dubious means was used. Well, honesty and integrity have become the facade used by wolves.; March 04, 2010 6:29 PM
Anonymous said...: I bet the number of $2K chairs has increased and I wonder what else will become gold soon. The gold tap was only $980 and yet a lot of hoohaa was made about it but it pales in comparison to the $2k chair,right?; March 04, 2010 8:00 PM

Wednesday, March 03, 2010

Integrity and honesty

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