We need a road map for how to get back to the ethical standards that prevailed among most corporations not all that long ago. We are facing an outbreak of white-collar crime not seen since the Gilded Age. The healthcare industry is not immune to such crime, as this magazine chronicles almost every week.
One has to wonder what it is that changed to create these situations where those in charge believe that the company coffers are their own private bank account. It's not very uplifting to read stories of how the top echelon of these corporate behemoths cheat their employees, colleagues, stockholders and the country.
I don't know how anyone could live with themselves knowing they have destroyed the lives of so many people. The answer, of course, is that too many people have come of age without any training in empathy and compassion. The decline of organized religion and sense of community have left people believing that the only meaning is to be found in having more. Having no moral center, they aren't bothered by what happens to those around them in their fevered drive to succeed.
Scandal isn't confined to large, for-profit companies. Smaller firms and not-for-profits have engaged in a wide array of nefarious activities. Even those not outright stealing are commanding outlandish salaries and perks -- which are a form of graft.
Ethics and values are paramount to the survival of this or any democratic society and we all need to be alert to the ethics crisis that permeates our culture or all of us are doomed.
There's a lot of literature on the ethics problem. One of the best I have seen is a new book: The Heart of a Business Ethic (University Press of America). The book is a compilation of the ServiceMaster Foundation's Hansen-Wessner Lectureship Series. It comprises eight talks at major universities from 1995 to 2002, and responses to each presentation from distinguished faculty at those institutions.
C. William Pollard, ServiceMaster's chairman emeritus and former chief executive officer, asks, "What is corporate governance without integrity? What is leadership without the example of service and an ethic of right behavior?" The book sets out to answer those questions.
Warren Bennis, a professor of business administration at the Marshall School at the University of Southern California, writes in a forward to the book: "So much lip service is paid to the issue of business ethics; but how does one in fact build an organization distinguished by tangible integrity, moral vision and transparency? I have found that the key is a commitment on the part of the corporate leader to establish a culture of candor, in which followers feel free to speak the truth to power and leaders are bold enough to hear such truth -- and act upon it. ...
"It is fashionable to sneer at the modern business organization, this alleged sociopath. Yet (former U.S. Secretary of State) James Baker, by way of Adam Smith, notes in the concluding essay that our economic system's genius is in how it turns naked self-interest into something that benefits a myriad people. This does not happen in some vast ocean of theory, but rather in tangible, human organizations of every size, shape and hue. What results is a dance of collaboration, a life-giving movement that can bring value to each person involved," Bennis added.
Lord Griffiths of Fforestfach, former economic adviser to British Prime Minister Margaret Thatcher, said in his lecture that when American business leaders analyzed the most successful companies, they found that while such traditional factors as structure and strategy were important, the most critical factor turned out to be the concept of shared values based on honesty, trust and employee satisfaction. "As financial institutions over recent years have shown, honesty pays while dishonesty saps the vitality of the institution."
Other lectures in the book are by Elmer Johnson, a corporate lawyer and former executive vice president of General Motors Corp. and David Young, founder and president of England-based Oxford Analytica, which draws on the scholarship of Oxford University to provide business and government leaders with analysis of world events; and Donald Soderquist, the former vice chairman and chief operating officer of Wal-Mart.
Johnson, after laying out many seemingly insoluble problems that come from a lack of community -- CEO pay divorced from performance, management geared only to immediate profit, mistrust at all levels of society and so forth -- points to a mild sense of hope for the future. Young adults, he says, are disillusioned by the misdeeds of the baby boomer generation, which mortgaged the future for short-term gains. But they are opting for careers that are more purposeful or starting their own companies where they have more control over corporate behavior. "So, in a strange way, this distrustful young generation may force the brutally efficient manager to face up to the costly consequences of mistrust. While there are these hopeful signs that the pendulum may swing, I am all too aware of how bad things usually have to get before a critical mass of leaders musters the courage to do anything."
I've read all kinds of essays and lectures on ethics but the eight examples in The Heart of a Business Ethic are superb. Everyone needs reminding that we are all stakeholders in a shared community. If we don't pay attention to the moral foundation of our society we could lose everything.
Ethics and values drive success,
Charles S. Lauer
Vice President-Publishing/Editorial Director
Lauer is the author of two books, Reach for the Stars and Soar with the Eagles, and is an experienced guest lecturer available for public speaking engagements. For more information, go to chucklauer.com.