Searching for Trust

Published: September 22, 2010

By Jim Lichtman
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Ethics scandals continue to make the news.

California City Officials Arrested in Salary Scandal” (Sept. 21); “Clemens Lied About Doping, Indictment Charges” (Aug. 19); “P.R. Missteps Fueled Fiascos at BP, Toyota and Goldman,” (Aug. 22)

Are companies paying attention to headlines, and are they making any attempt to reinforce the moral conscience of their own organizations?

Here’s what one CEO wrote in a memo addressed to all employees: “…we are responsible for conducting the business affairs of the Company in accordance with all applicable laws and in a moral and honest manner.”

The memo concluded: “We want to be proud of Enron and to know that it enjoys a reputation for fairness and honesty and that it is respected… Let’s keep that reputation high. – signed Kenneth L. Lay.”

In a Wall Street Journal article (Aug. 23, “Promises Aren’t Enough: Business Schools Need to Do a Better Job Teaching Students Values”) Rodrigo Canales, B. Cade Massey and Amy Wrzesniewski began, “It is a sign of the times that hundreds of Harvard Business School’s 2009 and 2010 graduates took “‘The MBA Oath.’  These students promised to ‘serve the greater good,’ act ethically, and refrain from pursuing greed at others’ expense…. The problem,” the authors point out, “is not a lack of sincerity, but a failure to adequately prepare for the moment of truth.”

Most of us want to do the right thing, but determining what that right thing is under complex situations with competing interests and pressure is the real challenge.

“Leadership,” the three conclude, “entails thinking beyond the day’s crises to focus on the longer term, grasping the impact of decisions on broader constituencies, and sensing a responsibility that goes far beyond the immediate result of a decision.”

Peter Goodman writes in The New York Times article (“In Case of Emergency: What Not to Do,” Aug. 21), “…Toyota, BP and Goldman exacerbated their woes by either declining to fess up promptly, casting blame elsewhere or striking adversarial postures with the public, the government and the news media.”

In the article, James Donnelly, senior vice president for crisis management at the public relations firm Ketchum says, “Companies that typically handle crises well, you never hear about them.  There’s not a lot of news when the company takes responsibility and moves on. The good crisis-management examples rarely end waving the flag of victory.”

However, there is at least one notable and noble exception.

In the fall of 1982, drug maker Johnson & Johnson was confronted with a nightmare scenario that consumed the national news.  In 2001, I interviewed former Chairman James Burke for my book, What Do You Stand For?, about the Tylenol case.

“I think everybody, in the long run, is motivated by trust,” Burke said. “…anything we do – whether we’re trying to build an organization or trying to create products and services is guided by the fact that the people who are influenced – our constituencies – want to trust us. If there is a guiding moral principle in most people’s lives, I think it’s integrity.

“I think that the world is searching for trust in all of their institutions. And I think those that perform the best and continue to perform the best over time, whether they’re a parent – a family’s an institution as well – or a teacher, or whether they’re a business, I think we’re all guided by a desire to trust those that we’re working with.

“As I look back on Tylenol, I think that the only way that we could have done what we did was to have all of the institutions, that were affected by the Tylenol poisonings, believe in us. And I want to emphasize, believe in us, the company. Whether that was the head of the FBI…the FDA… people that we spoke to in Congress or the people at the White House… There was no lack of trust about Johnson & Johnson. There was no thought that this was something that we were doing that was only in our own self-interest.”

“…those institutions that survive over time are those that have the better consumer franchise because the consumer, collectively, is smarter than any of us are individually.  If they’re allowed to speak, and if leadership is listening to them, over time, better decisions will be made and that’s what happened to us. We were going out every single day talking to all kinds of people to get their feelings about what we were doing.

“And I think a lot of that was the cumulative sense of trust that the public evidenced by buying our product.

“I think the experience confirmed my own deep belief that you can do well by doing good. That’s a buzzword phrase, but I think it’s true. I think that the more we do that’s right, the more successful we are as individuals and as institutions.”

When it comes to ethics, it is decision-making examples such as Burke’s and others that need to be taught and reinforced; only then can we move past simple rhetoric to responsible action.


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