“Sometimes, all it takes to save people from a terrible fate is one person willing to do something about it.”
Veronica Roth, Allegiant
Well. This is about business ethics.
Let’s clear up something upfront. What the law says is right, or legal, isn’t the same as knowing what is right. “It’s legal” is the laziest ethical statement you will ever hear AND, if you hear it, all your ‘spidey-senses’ should be activated. But. I will note upfront, with regard to everything I will say today, one person can save an entire organization from a terrible fate.
That said. Now let me begin discussing ethics by outlining some business truths which actually exert some influence on ethical business behavior <please note they all have to do with money>:
– Your business never has enough money <never>.
Running a business is always about choices. Choices with regard to what money you do have and how it will be used. New employees, employee raises, new equipment, computer upgrades, open a factory, develop a new product, update your offices, replace outdated capital expenditure items … the list is never ending. Unfortunately, the money has an end.
Until you have lived this you may not understand There is ALWAYS something you can, and want to, do to improve your business … and you never have enough money to do it all.
– You never have enough money to satisfy your shareholders <stakeholders>.
Running a business is rarely about yourself. Either you have shareholders or investors or employees <who, fairly, want their fair share of success> or bankers you owe something to or … well … the list can go on. Suffice it to say even if you have enough money today to please everyone you have to please at some point you will not.
The financial community has this absurd perspective that anything but growth in every reporting period is a sign of trouble. And they have shared that attitude so clearly and loudly that everyone else believes it too. Your employees included. Therefore despite the fact you know as a business person that inevitably you just won’t be able to produce the money <and results> to please everyone you do what it takes to show growth <and money> every time you have to report.
What does this mean? Basically you never have enough money to satisfy everyone.
Until you have lived this <nightmare> you may not understand.
<at some point> You never have enough money.
– Once you (as an individual) have money, you never have enough.
This is a truth at all income levels but particularly so at the higher levels. Why? I call it the ‘double dipping factor.’ Your income & wealth is derived by double dipping. You have real income <salary> and then you have ‘decreases in expenses thru business.’
Say you receive $300k in real salary. But then you expense parking, gas, maybe car payments, some food & meals, this doesn’t even include situations where businesses give you things because of your responsibility level, and then you get to your income tax return and deduct some crap. Well. Your real income actually gets supplemented. That’s double dipping to me. It’s not illegal nor immoral. It just is. The net result? You actually are living beyond your means. You aren’t living your salary life, you are living your salary+ life.
Until you live it you may not understand. Once you have money you never have enough.
Okay. Now that you know the truth, that ethics and money are inextricably linked in business, we can move on to the real discussion.
I begin a discussion on ethics with these thoughts because often, mistakenly, we end up talking about business ethics in the abstract or philosophically. And until you have been there in the room and had to make the hard business decisions … it is difficult to understand the nuances. And the demands and challenges.
Oh. And the uncomfortable fact there are rarely non-debatable absolutes.
Young people want to simplistically pigeonhole the discussion into a ‘greed’ slot or sometimes a ‘capitalism is bad’ slot or ‘materialism.’
They are wrong.
Business ethics and money is a very complex topic. And that was typed by a business guy who has very <very> clear lines with regard to personal business ethics.
But. And this is a HUGE but. When you are responsible for an entire business and company and managing an organization <as well as constituents who affect attitudes & perceptions with regard to your business>, personal business ethics and company business ethics may not be straight line linked. They may simply coexist in a broader spectrum of possibilities.
There have been a number of situations in which my personal business ethics made me quite uncomfortable with what we did on a business ethics scale. And what we did businesswise was quite legal. I say ‘quite’ because it wasn’t even close to being a decision which could be construed as not within the law <or rules or regulations>.
These were just decisions that personally I wouldn’t make. And I may not have been thrilled personally, but they were good decisions for the health & profitability of the business <and legal>. The decisions helped the business be competitive and make it possible to do some of the tangible things on our business ‘wish list.’
Well. Here is another business truth.
Rules <regulations> cannot cover every situation. You can play by the rules and sooner or later some decent soul gets screwed. Sucks … but it happens. In fact, the rules <what is legal> are often very gray & expansive <to give people freedom of choice> or, as one ethics professor suggests, “I always say the law is the floor, not the ceiling.”
I read somewhere that ethics are not the same as feelings. The rationale was that because many people feel good even though they are doing something wrong. I don’t buy it.
Business ethics is all about feeling good about what you do. And it’s not just following the law. Laws can become ethically challenged and there are certainly things strictly allowed by law that many of us would consider unethical.
So how the hell do we determine if we’re acting ethically?
Well. You can’t. Not really. You can simply do your best. You are often choosing which devil you are going to dance with.
“If, at the end of the day, can you say, ‘I got all the facts, not just the ones I agreed with’? And can you say you looked at all the options, not just the convenient ones? If I did all those things and answered them honestly, then I can say I did my very best.”
Whew. I did my very best. How subjective is that?
Does this mean ‘every person judges on their own’? <and we trust every person to be a good, no, great judge and self regulate?>.
In today’s business world, often, a lot is left up to the individual’s interpretation. And the line between virtue and vice seems less perceptible than ever before.
I can honestly say, in my experience, most people in business struggle to discern between right and wrong, good and evil and most of all what is true versus what is false. Like it or not this is murky territory — there is a lot of grey.
I am not sure what the alternative is.
Because there is something called ‘legal moralism.’ It is a belief that laws should be both created and enforced based on morals where law is based on protection and enforcement of societal morals. I just don’t see how that is viable. Other than ‘you cannot lie or cheat or steal’ how can laws cover the broad spectrum of what everyone believes is ethical or not?
All I really know for sure is that there is far too much emphasis on profit at the expense of other things in today’s business world <and I will point out that this is a historical slide in my ‘discussing capitalism’ article>. This profit emphasis puts a significant amount of pressure on business ethics. While we would like to believe they could easily coexist reality shows us that it is an uneasy relationship.
They argue with each other a lot.
The only thing I can point out here is that on one side of the table sits someone with a soul and on the other sits money <which does not have a soul>.
Regardless. My business ethics are relatively untainted by personal wealth objectives. Accumulation of wealth and money has never been important to me. I like being fairly compensated and being able to afford some nice things <things I like>, but accumulating ‘more’ and ‘bigger’ just isn’t part of my DNA.
But that’s just me. And forcing my ethical barometer with regard to money & wealth on someone else is not only silly … but a fool’s errand <in a dark forest>:
“l’ame d’autrui est une foret obscure ou il faut marcher avec precaution.”
<the soul of another is a dark forest in which one must tread carefully>
At the soul of wealth building is the fact it is simply a game. This means that running a business you are balancing a multitude of different personal wealth goals (games) as well as the business wealth goal.
It isn’t a simple game. And it is often a very dark forest in which you must tread carefully.
I will admit that I often simply tried to balance it all out. By that I mean while a CFO may convince me that something we did was clearly within accounting guidelines and was simply good business practice, I would then insure the organizational honesty & integrity barometer was dialed up.
That was how I slept at night.
Looking only at the profit or loss and the overhead. Nothing else mattered. I tried to file the vanity projects, forget about becoming rich overnight and ignore anything that even smelled of simply trying to impress others.
I really can say one thing in the end.
While ethics seems like a black & white discussion, in business? It has many hues — some rich & royal, some dark & forbidding.
Until you live it you may not understand.
originally published January 2014