Ethics, honesty and character?
It’s about business
By John R. Graham
It’s not about good people gone
wrong.
It’s time to get our heads on
straight. That Sixties phrase is a perfect fit for
today’s confused and disturbing business climate, as each
newscast brings darker revelations of corporate abuse.
As a former top executive of Enron
constructs his fabled $30 million Florida dream home while
awaiting possible criminal charges, thousands of former
employees are stunned and jobless.
The list of charges grows longer by the
day. Energy companies across the nation bet the farm like
neophyte gamblers turned loose for the first time in Las Vegas
–– and Americans will be paying off the debts for
years to come.
And, of course, there’s that
legendary family in the obscure community of Coudersport, PA,
that took care of the town while looting Adelphia, the company
they founded, and turning it into a “piggy bank”
for their personal pleasure.
What’s it all mean? Frankly, the
millions of words in print and on the air make for good
entertainment but little enlightenment. And the plentiful but
preposterous and self-serving political posturing only adds to
the dimwitted din.
When it comes to identifying the basic
problem, the widely touted sins of greed, immorality and
defective character are irrelevant. Whether it’s Arthur
Andersen or WorldCom, there’s little or no indication
that the perpetrators of dishonesty are “bad
people.”
Quite the contrary, many are the portrait
of what we consider “the good American.” Devoted to
their families, they attend church regularly and give their
time to civic concerns. The founder of Adelphia was generous to
a fault, helping employees and those in the community who had a
financial need. Yet, he and his family members looted the
company of hundreds of millions of dollars.
The disloyalty deed
The problem isn’t bad, dishonest or
greedy people. It’s not about putting the brakes on
acquisitiveness or isolating some defective moral gene. The
bedrock issue is totally different: All of these executives
exhibited a total disregard for their companies. No matter what
position of responsibility they held, their actions were
identical: they were disloyal to their employers.
It’s striking that in many cases it
was the founders of these corporations who did the most damage.
They willfully destroyed what they created. If those who
perpetrated such wholesale destruction are faulted, it should
be for disloyalty. This may seem dated at a time when loyalty
has all but disappeared. And that’s the problem.
Many look upon those who spend their
entire working lives in one or two companies as wimpish or even
stupid. Just hearing about some old timer who worked for IBM
for 40 years must seem quaint.
Getting it right
There’s another dramatically
different side to the story, however. By most any standard, Arm
& Hammer may stand as the best-protected brand in business
history. If it is, much of the credit should go to Dwight C.
Minton, the CEO of Church & Dwight from 1969 to 1995.
Now, chairman emeritus and still a board
member, Minton expressed his position on protecting the brand
(Harvard Business Review, June 2002). “The Arm &
Hammer brand is far and away the company’s most valuable
asset. The prospect of something damaging our reputation is
frightening.… Protect the Arm & Hammer brand, not
dollars, not personal reputation.”
His crystal clear and unequivocal message
is next to impossible to miss. What word don’t we
understand?
Minton continues with words that deserve
to be seen in executive offices and boardrooms everywhere.
“Aggressively protecting a brand
does not come free. It means publicly admitting a problem if
one exists, even though that admission might incur cash costs,
a higher cost of capital, or government actions against the
company.”
That’s loyalty, and in a profound
sense, it’s one for the books (business books, that is).
The destructiveness of disloyalty
While waiting for a plane in what was then
National Airport in Washington, DC., a business executive was
intrigued by the candid conversations of the corporate types
waiting for their flights. He reports sitting across from a man
with a Macintosh computer case at his feet. He told a fellow
traveler that he worked for the now-defunct Digital Equipment
Corporation. Recognizing the bright little apple, the person
asked, “Why do you use a Mac computer when you work for
DEC?”
The questioner was clearly confused and
even slightly aghast at what she perceived to be a not so
inconsequential breech of loyalty
“I don’t like DEC
computers,” shot back the man, without even a twinge of
embarrassment.
The issue is not whether GM employees
should be expected to drive GM products or DEC employees to use
DEC computers. At the same time, the honor code works in
certain colleges not because the students are more ethical than
those attending other institutions or are afraid of getting
caught. It works because there is a high regard for the
institution.
Damaging the corporation is no different
from injuring the family, the college, the team, or even the
country. The devastating flaw is disloyalty.
Implications for action
The loyalty issue has practical
implications for every business. Here are a few possibilities:
1. Focus more on loyalty when hiring
employees.
This is not about the long-disdained
loyalty oaths of a half-century ago. It’s about
performance.
Just as we want to authenticate a
prospective employee’s job skills, ability to work with
others, honesty, and other pertinent qualities, why not seek to
understand how individuals feel about the companies where they
have worked?
What about those thousands of dot.comers
who held more jobs in 11 months than the average person has in
a lifetime? It may be worth discovering what role their
apparent disregard for the companies they worked for played in
the demise of at least some of the dot.coms.
It may be that performance ––
including loyalty –– is just as important as
experience and skill.
2. Change the focus from holding a job to
task performance.
If there was an inherent flaw in the old
IBM system of working your entire career for one company, it
was allowing employees to assume that their jobs were almost
automatically secure until retirement.
The picture has changed.
“In the coming era,” writes
business writer Price Pritchett, “jobs will be tasks you
do, not something you have.” While these are harsh words
to some, they are the requirements for meeting the challenges
of an increasingly competitive (if that seems possible)
business environment.
The delivery driver rushed into his
boss’ office sweating and voice quivering. “I
didn’t get a signature for the package even though I was
supposed to. But I found the person and gave it directly to
her.”
“That’s better than a
signature,” said his supervisor with a smile.
That’s also task-oriented.
In the final analysis, it’s not
putting in the time that deserves plaudits; it’s results
that count. It’s the task that loyalty is made of.
3. Focus more on the value of the company.
In answer to the question, “What
business are you in?” Walt Disney possessed an
understanding that is nothing less than legendary. Walt Disney
didn’t make movies; he created memories. Even today,
Disney is in the business of creating wonderfully warm and
memorable traditions for families everywhere.
“Most parents don’t take their
kids to Walt Disney World just for the event itself, but rather
to make that shared experience part of everyday family
conversations for months, and even years, afterward,”
suggest Joseph Pine II and James Gilmore in The Experience
Economy.
“While the experience itself lacks
tangibility, people greatly value the offering because its
value lies within them, where it remains long afterward.”
Experiences have the same positive effect
on companies as they do on families. For the most part, it is
the traditions that determine loyalty to both family and
employer.
One business executive never leaves his
office on a Friday without leaving his desk in good order,
papers filed, and emails answered.
“As you might imagine, it’s
the effect my mother had on me. We never left a room without
turning off the lights or left the house without making the bed
and washing the dishes. When I think about it, that’s one
way I honor my mother’s memory.”
And then he added, “Why the clean
desk on Fridays? Mother made it clear that you don’t play
until the chores are done.”
Simple traditions are the stuff from which
company loyalty blossoms.
It’s safe to suggest that many find
the idea of loyalty irrelevant and out of step with the times.
They are probably rolling their eyes. They are saying that
companies fail to exhibit much loyalty to customers, suppliers,
and employees. It’s absolutely true. Their actions
reflect the people who make decisions. It’s just one more
reason to make loyalty a priority.
John R. Graham, president of Graham
Communications, a marketing services and sales consulting firm,
is the author of The New Magnet Marketing and Break the Rules
Selling. He is the recipient of an APEX Grand Award in
writing and Door & Hardware Institute’s First Place
Prize in Business Writing He can be contacted at 40 Oval Road,
Quincy, MA 02170 (617) 328-0069; fax (617) 471-1504); j_graham@grahamcomm.com. The company’s web site is
www.grahamcomm.com
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