The Real Deal

While driving this morning I caught some news on the radio. One disturbing bit of news reported that a large defense contractor in Great Britain is facing potential fines of over $1 billion for alleged bribery paid in pursuit of business. This contractor is a major supplier to the US Department of Defense and the alleged acts took place outside the US. Still, the news should be disturbing to all of us. Many have heard the line, “That’s just the way it is over there. If you want to get business, you have to play the game.”  The government of the United Kingdom does not agree! So, what’s the net value of that business when we deduct the penalties and fines? What will that do to their competitive position over the next ten years? Will people understand that bribery is abhorrent here, but acceptable there?

To the overwhelming number of ethical and principled firms, this is not about you!

After this last year of colossal failures in the financial system and unrepentant players, what should we expect from captains of industry? Last year we heard a similar line, “Everybody’s doing it. If we don’t follow suit and make the loans, we will not get our share of the money to be made.” Where is the money now?

I’ve read many written statements of values, ethics, behavior, and respect for investors, customers, employees and the public at large. So, how do we know they are more than paper? How should we know? The very saddening answer is that more regulation will precipitate. More controls, inspections, reports, hearings and constraints on productivity and value creation. What’s the real cost to the many precipitated by others? Do we really believe that we should know because a regulator will tell us it is so?

I know organizations that live, breathe and behave in accordance with great values and ethical standards. They are successful, competitive, and a magnet for people seeking employment. In fact, I wrote about one a few months back, May I have a word with you? …. Values. These folks are the real deal.

Let’s go back to respect for the stakeholders. How will the stakeholders benefit if those values and behaviors are the real deal?

• Investors will benefit from the confidence that their moneys are not sitting on a time bomb waiting to destroy returns and long term value.
• Customers will benefit because their prices don’t carry the burden of graft and decisions are easier when the integrity of the supplier is unchallenged by a clean track record.
• Employees will benefit from never facing a choice between earning a livelihood and behaving in alignment with personal values and beliefs about honesty.
• Society at large will benefit the most from the reduced costs, increased employment and better value without the burden of regulation and constraints to growth.

The list of benefits is big, too big for a blog.

So, who decides what is next? Who has the responsibility?

Let’s ask the person in the mirror for starts. How will that person make choices today? When we ask the same question tomorrow, what will be the answer?