The ones you can’t trust

Recently, we have seen a number of high profile ethical issues pop up in global companies, U.S. companies and if you look around a little – you will probably find one in the news in your city. Most recently, this would include the Volkswagen EPA mileage situation.

Stop it.

No, I don’t mean stop doing it. I mean stop putting up with them. Stop encouraging them. Stop tolerating them. Stop teaching your team and your managers to ignore them through your inaction, or less than substantial action.

What exactly do I mean?

It isn’t like this is a new phenomena, but it’s quite clear that it’s one that needs some attention from businesses – including yours.

Why do I point my crooked little finger at you? Because you, like other small local business owners, are the one who often give people their first job. You are probably also the one who first sees poor choices or ethical lapses – call them what you will – and then don’t send the right message in how you handle them.

Before we get to far into this, I want to be crystal clear that I am not saying that young / new employees are the problem. What they are is impressionable. How you and other employers handle ethical failures is the problem. The actions that young and new employees see set the stage for how these things should be handled.

How will you use these teachable moments? What is the normal result they need to see? What normally happens when you encounter something like this?

Perhaps the results look something like this list – and you may know of a few other reactions:

  • It’s ignored as if it didn’t happen. Think about the message that sends to other staff members.
  • It’s recognized as a problem, but nothing substantial happens.
  • It’s recognized as a problem and someone’s pay is docked.
  • It’s recognized as a problem and someone gets fired.

Most of these responses don’t send the right message. They certainly don’t set the tone for new impressionable employees and current / future managers. Instead, they make it clear that these kinds of things are usually ignored, so they must be OK.

Do you think former Volkswagen CEO Martin Winterkorn was ever fired for unethical behavior? Do you think he ever fired anyone for unethical behavior?

People don’t make decisions like the ones that happened at Volkswagen without a history of behavior encouraging them.

What message does it send that Winterkorn gets to keep his $32 million pension? Who else at VW keeps their job, benefits, pension and perks, despite the fraudulent actions they took?

Where were the roots of this behavior planted? These people didn’t magically change from ethical to unethical when EPA testing started. The people central to this situation likely have a history of increasingly unethical behavior. They didn’t wake up one day and decide to do this on their own. To involve engineering and manufacturing at this scope, management approval has to be involved.

Where was it learned that this behavior is acceptable?

Preventative measures

You might be in a situation where you’re concerned about how to get rid of a problem employee – and yes, a problem is any employee you can’t trust. What you don’t want to create is a legal problem that’s worse than an untrustworthy employee. Fix that by working with an employment law expert. Yes, an attorney.

Do whatever your attorney says. Every time, every dotted I, every crossed T.

When you have a bulletproof employment agreement that empowers you to deal with an unethical employee without concern for repercussions, then you’re ready.

Almost.

If you make changes, you must communicate them both to existing staff and new employees. Leave no doubt that there is no defense for the dark arts and that any action that threatens the ability to trust any employee will result in their immediate termination.

No warnings. No meaningful chats with the big boss. No waiting until the end of the day or shift. No mercy.

Show them the door immediately – and so I reinforce this: be sure your termination process has been vetted.

It can be stopped, but it will take action from all of us.

What message do your actions send? Take the wrong action, or ignore them, and your people will remember it for years to come.

Profit is not the problem

In Steve Denning’s Forbes commentary this week, he mentions a presentation made by author and Harvard business professor Clayton Christensen decrying U.S. business schools’ focus on numbers-above-all, saying the pursuit of profit is killing innovation and the US economy.

The pursuit of profit is not the problem, nor is profit itself.

What the always interesting and provocative Christensen veers away from (to discuss related issues) is that the problem occurs when the pursuit of profit is taken to the extreme.

I’ll say it again so the naysayers hear me as clearly as possible: The problem is not profit, nor is the problem our quest for profit.

Profit is good. Profit is one of the fuels that drive communities, families and businesses to do more and better things.

The problem occurs when profit is the only value a company’s management uses to decide right from wrong, good from bad, do it from don’t do it.

When that occurs, we end up with exactly what Christensen talks about – and that’s why he called U.S. business schools to task for it.

No numbers?

I do not mean that you should make all your decisions from some touchy-feely “Let’s all sing kumbaya” kind of place.

Remember that I teach all sorts of measurement mechanism for all sorts of things, from internet, to customer retention, to improving direct mail response, to finding your one number and so on. Remember that I talk about finding little things to improve profitability all the time.

Yet you should also remember that in that same context, I do not suggest that these improvements should be found at all costs. Nor do I suggest that you eke out these little bumps in profit at all costs.

There’s no doubt that financial ratios, profit and other financial measures are critical parts of business decision making.

These numbers do not/should not stand alone. It’s likely there will be times where you must focus solely on dollars, often due to short term needs. Over the long term, your situation won’t always be that way and your decision-making won’t always be so focused on the short term.

Christensen’s point is driven home particularly well by the quarterly reports make or break the stock prices of stock exchange listed companies. The nature of quarterly reports encourages short-term decision making. In some cases, shareholder lawsuits reinforce that these short term decisions should be driving the business.

But that is short-sighted.

However…

You simply cannot exclude character, ethics, economic sustainability, community sustainability or consideration of what is best for the customer and your staff from the decision making process and expect things to end well.

When the only thing on your mind is the numbers, the decisions of national retail chains who start their After-Thanksgiving sales at midnight the Friday after Thanksgiving seem downright obvious.

It’s just math, so the discussion leading to a decision sounds like this: “The earlier we can open, the better the chance we can get the sale and the more it’s about us”. Sounds a bit like “How early and then supposedly influential can our Presidential primary become?”, doesn’t it?

Re-read that: “You simply cannot exclude character, ethics, economic sustainability, community sustainability or consideration of what is best for the customer or your staff from the decision making process and expect things to end well.”

I saw a sign in a local store this week (this is not a chain or franchise) saying they would be open at 4:00 am on the Friday after Thanksgiving. Perhaps they are hoping that they’ll catch some traffic heading to (or worse, back from) the box retailers who have midnight to 4:00am openings.

Really? 4 am in a small mountain town?

The Race

Don’t get me wrong. Black Friday shopping hours are just a symptom.

This is about the core fundamental business values being instilled in students today and the importance of having someone in your organization with the gumption to say “That looks great for the numbers, but is this all we’re about?”

Whether it’s said or not said, others will watch this process, learn something from it and model the behavior when they make a decision.

Sometime in the wee hours of Black Friday, I hope some introspection happens.

An ethical lapse, or just not knowing any better?

~ THE EYE ~
Creative Commons License photo credit: KhayaL

Last night I was working on the web site for our local Scout camp.

Lots of Scout troops from out of state visit Glacier National Park every year.

Some of them use our local Scout camp property as a “base camp” for a week or two of treks they make into the Bob Marshall, Glacier Park and elsewhere.

One thing they depend on us for is referrals to quality local businesses for various outdoor adventures. We don’t have the staff, money or licenses to be an outfitter, so we refer them to professionals. Part of that process is providing these troops with contact info.

While looking up some websites to add to the “nearby activities” directory on the camp’s site, I noticed that when I searched for the name of one of the outfitters, a Google Adwords ad for their direct competitor appeared at the top of the page.

“How 1999…”, I thought.

What do I mean by that? It’s a reference to standard (and kinda dumb) stuff that businesses did online way back in 1999.

It could just be a dumb move. Or it could be unethical, which in this case qualifies as both.

Dumb and Dumber

I’ll address “dumb” first.

It could be that this business just doesn’t know any better and thinks they’re being clever by using their competitor’s name as a keyword to place their ad.

The “don’t know any better” thing doesn’t wash with me. Would they buy a Yellow Pages or newspaper ad with the other business’ name in it but put their own phone number in the ad? Of course not. Yet they do it in the hidden keywords of online ads and in their web site’s html source. The ad itself isn’t misleading, of course.

Like the Wild West, whatever you get away with online is legal and ethical, right? I mean It’s online, so the rules are different (if they exist at all), right?

Not hardly.

It’s obvious that outfitter-in-the-ad is advertising their business on Google Adwords using the business name of a competitor as a keyword. It’s equally obvious from the site’s meta info (source code that isn’t visible). The former is subject to discussion. The latter is uncool in any legitimate web marketer’s unwritten rulebook.

If “Joe’s Climbing Wall” had bought an ad to display when “climbing walls” or “climbing walls Glacier Park” is searched, we wouldn’t be having this conversation. But that clearly isn’t the case. And no, this isn’t about climbing walls.

A big deal

You might not think this is worth talking about, so let me elaborate a little.

Imagine Ford’s reaction if every search for “Ford Mustang” resulted in seeing a Google search results page starting with Chevy Camaro ads and links.

Should I expect to see both companies in the ads and search results displayed when I search for “American sports car”? Absolutely.

The key here is that this isn’t what the searcher is looking for when looking for a specific business name.

Yeah, I’m yelling. A little, anyhow. Misuse of trade names – even at this level – will sooner or later get you bit. Misleading people in search results also annoys Google, who wants people to find what they are searching for the first time they search.

Placing Gain next to Tide on the shelf at your grocery is fair game (thanks Shane). It’s obvious to the consumer which is which in that case.

How’s your icemaker?

Even for the ethically challenged, using a competitor’s business name as an advertising keyword is a bad idea.

If someone calls your HDTV store and asks a question about the newest 3D TV models and your salesperson say “Well, our refrigerators all have in-door icemakers”, would you expect that prospect to have a positive reaction? How would you react to a totally out-of-context response like that?

It’s foolish.

Likewise, so is advertising your business using someone else’s business name.

The other shoe

What troubles me most is the signal it sends. It makes me question how the rest of your business operates. It could be an innocent mistake. It could be something the web developer did and didn’t share with the business. Further research indicates otherwise.

When it comes to sending Scouts out into the woods or on the water, that wonder extends to…

  • Whether your safety equipment is up to par, or in another ethical lapse, you just say it is.
  • Whether your staff is properly trained, or in another ethical lapse, you just say they are.

It’s the last thought you want in the heads of folks who funnel hundreds of young, out-of-state visitors to businesses like yours.

Bad Haircuts and Big Box Ethics

Today’s guest post from Scott McKain shows us a how Office Depot stole copyrighted material from a friend of his and used it in a national ad campaign.

One more reason to do your own marketing and shop locally owned businesses.

All that aside, take a good long look at the pricing lesson in Mr. Slutsky’s video.

Worth every second and a lot more.

The *Next* Greatest Generation

Misty Fall Baseball
Creative Commons License photo credit: Sister72

This weekend, several thousand seniors will graduate from Flathead Valley high schools.

It’s a bittersweet time for parents, and I think it’s fitting that it occurs soon after Memorial Day.

Confused? Bear with me for a bit.

Last weekend, I strolled alone through Columbia Falls’ Veterans Cemetery on a rainy Monday afternoon. I’m not into the big displays, parades and such. Visits to honor these folks is something I prefer to do privately.

The Greatest Generation

During my brief walk, I discovered the headstones of men & women who served their country at least as far back as the Spanish-American War. That takes us back to 1898 for those who – like me – have forgotten those dates from high school history (sorry, Mrs. Maggard).

In one area of that hallowed ground, I found myself surrounded by the resting places of men and women from the group Tom Brokaw calls “The Greatest Generation”.

As I stood there, I wondered what they would think of the job their grandkids have done. Their grandkids – a generation I belong to – have most certainly done a lot of good.

Sadly, we can also hang a lot of unfortunate things on the same group: Enron, our national financial situation, the Gulf spill and other stuff I need not remind you of.

One of the universal goals of parenthood is for your kids to do better than you. As I walked among the headstones on Memorial Day, it hit me that we aren’t doing enough to honor the sacrifices they made.

I don’t mean parades and fancy statues, nor do I mean flowery speeches in the park.

I mean actions.

We honor them by our actions, taken by virtue of the freedom they worked and died to obtain for us.

Stepping up to the plate

Just today, a grandmother related the story of a baseball coach in CFalls screaming obscenities at the elementary-aged boys on his team and following that up by calling them names.

As the drama played out in front of the entire team and all the parents and grandparents watching practice, no one said a thing.

I am embarrassed to say it, but I get the idea from the event as related to me that those in attendance felt that was acceptable behavior for a coach teaching young men how to play ball and how to react when you don’t get exactly what you want.

The boy’s mom noted that it was too late to say anything about it.

I think she meant it was too late in the day by the time she heard about it from her mom, but regardless my comment to her was that it is never too late to say something that really matters. (For my part, I’ll be passing the story on to the league’s board)

In the absence of feedback to contrary, people like this will continue to act like jerks. Call them on it. If you’re that coach, expect to be held accountable. In the future, consider being a little more like Armando Gallaraga.

Unusual class

In the history of professional baseball, there have only been *twenty* perfect games (amazingly, two of them this season).

On what was presumably the last out of Gallaraga’s perfect game, umpire Jim Joyce made a bad call on a routine play, saying the baserunner was safe. Instant replays showed him to be out, and even Joyce later said it was the wrong call.

No perfect game for Gallaraga.

To Gallaraga’s credit, he SMILED when he saw the umpire’s call of “Safe!” and to this day has been nothing but graceful. A professional baseball player who lives up to his name in attitude as well as performance.

The Class of 2010

There was a bright spot in the swearing baseball coach episode in CFalls.

One young man on the team left the field and walked over to his grandmother. He told her that he wasn’t going to play for that team anymore and would be returning to his old team.

Like Gallaraga, he knew what was right and wrong and ACTED accordingly.

Accountability and action from a TEN YEAR OLD. Outstanding.

Speaking of action and accountability, I have high expectations for the class of 2010. I know quite a few of these young people and can’t wait to see what they achieve.

Based on the performance and actions of the ones I know, I expect them to not only be accountable for their behavior, but to be unapologetic about expecting the same from their parents’ generation.

That and a healthy dose of tenacity is what will make the Class of 2010 the next “Greatest Generation”.

Is your business ready to employ and challenge these folks? Is it ready to channel their enthusiasm? Is it ready to teach them the lessons they’ll need to take their next step in the business world?

It had better be. They join the workforce on Saturday morning.

Situational Ethics: Don’t go there

She sells seashells: the extended inventory
Creative Commons License photo credit: quinn.anya

The probably not-so-old joke goes something like this: “There are two kinds of people: those who break people into two groups and those who don’t.”

When it comes to business ethics, there’s usually a pretty clear definition of the line between these two groups: the unethical and the accidentally unethical.

The accidentally unethical will stumble now and then and make a mistake that, in many cases, they didn’t even realize was a problem.

These folks are the reason why even the most jaded person needs to start by giving these situations a second look or a benefit of the doubt prior to dropping the hammer. Sometimes, you’ll find that easing into these situations will work to your advantage. You can always get serious about things after you gather more information.

The Wild West

I had just that situation occur a few years ago. Back in the wild west days of the internet, I found out that a competitor was using my product name in his web site’s keywords – something that no ethical website designer or business owner would do.

This is a problem for the same reason that I can’t put “Goodyear tires” on a sign in front of my tire business if I don’t sell Goodyear tires. It’s misleading and it uses someone else’s trade names to attract business to my business. Not only is this unethical / wrong / slimy, but in most cases it’s illegal.

Plus it really ticks off customers who pull in wanting a pair of Goodyear Eagle GTs only to find that you sell nothing but Chinese-made retreads.

Back to the story. When I first found this website, I was angry about it. This was back in the days when website keywords mattered a lot more than they do now and I was in the middle of the “climbing to altitude” phase of my business – fighting for every inch and not interested in giving any of it back to a thief.

But…something inside told me to tread softly, so I called the guy in Michigan and explained the situation. He sounded sincere when he explained that he didn’t know that it was illegal to use my business name and product name in his website keywords.

Note: In most countries, it’s ok to use a competitor’s brand and name when comparing your product / service to theirs. It’s not cool to use them in ways to “game the system”. We’ll skip the details and geeky stuff for now.

The twist

As I explained the problem to the guy using my trade names, he got it and agreed to remove the terms from his website…and then a funny thing happened.

He offered to sell his business to me.

At the time, he was my biggest competitor. If we lost a sale to someone at that time, more often than not, it was to this guy.

And yes, of course I jumped on it. Not only was it a chance to take over a sizable chunk of the market, it made us that much stronger.

The gravy: the guy was well-liked in the business, so his enthusiasm about getting out of the business and selling it to someone who would treat his customers properly gave us a nice word-of-mouth boost.

The other kind

I don’t mind competitors. You shouldn’t either – they make us all better.

In fact, several of the local ones are friends and we refer business to each other.

Unfortunately, a couple of them – and one in particular – has shown that he is the other sort of unethical person. The kind that knows it and doesn’t care if you catch them at it.

More recently, I came across someone locally who was using the byline of this blog to advertise his marketing business.

When I called him on the fact that it was uncool to use my byline (he’s copied my business slogan to promote his business), he was unapologetic and refused to stop, claiming he somehow randomly arrived at the same slogan despite never seeing my blog or hearing of me.

Yeah. I got that same story from the Easter bunny and Santa too.

Kinda makes you wonder how he treats his customers, doesn’t it?

The Genie

You find these situations in business, politics and your personal life – and they seem to become more prevalent as a situation becomes more challenging / desperate (like the tough economy many are experiencing now). Almost without exception they will come back to bite you. Don’t let tough times tempt you into doing something like this.

A friend of mine has a saying that fits these situations well: “When you move on, the only thing you leave behind is your reputation.”

That’s a genie that you can’t get back into the bottle.

Earn trust or destroy it? Your choice

Communicate
Creative Commons License photo credit: aturkus

Millions of people depend on Gmail.

Sometimes it goes down unexpectedly.

Not long ago, people all over the world were “freaking out” and saying the F word (“Fail”) because Gmail was down.

In addition to numerous posts via Twitter and other social media, here’s how Google communicated a problem when they had a major downtime (their description – the downtime was not quite 2 hours).

Think about how your business responds when there’s a problem.

Do you keep it under your hat?

Do you update your clientele frequently so they remain calm, even if things aren’t going so well.

When things aren’t going so hot, it quite often ends up being more important how you communicate with your clientele when there’s a problem.

Here’s an example that’s a bit more serious.

It got worse for the business because they handled communication poorly.

Railroaded

A few months back, Burlington Northern Santa Fe (BNSF) suddenly started buying (or trying to buy) pieces of track-side real estate in Whitefish MT (a resort/ski community in Northwest Montana) and Somers, MT (a lakeside resort area not far south of Whitefish).

No reason was given for the sudden interest in track-side land but people started talking. Conspiracy theories were abundant.

Here’s an excerpt from an early newspaper column about BNSF’s behavior:

Burlington Northern Sante Fe is up to something. The railroad giant has approached property owners in Whitefish and Somers, offering to buy their land. No one knows why, exactly, not even those who have been asked to sell. And BNSF isnâ??t talking â?? leaving entire neighborhoods apprehensive…

Eventually, residents got wind of BNSF approaching their neighbors and started asking questions. BNSF was mum about it, not even talking details with those they offered to buy out.

As a result, the residents made the natural move – they got attorneys.

Feeling the heat, BNSF decided to admit what was going on, albeit a bit too late to avoid looking a bit slimy.

By then, the tone had been set. Lying until you get caught is how things were gonna work, even if they were “only” lies of omission.

Coming clean only works in your favor when you do it upfront.

Without Grace

Not unlike W.R. Grace’s behavior in Libby MT (which echoed its earlier behavior in Woburn MA including lying to the EPA about their chemical use), BNSF had set the stage such that nothing they said was going to be trusted.

Before long, the EPA got involved and now BNSF has to do things the hard and likely more expensive way. Just like Grace, at least in Woburn.

While the BNSF and Grace situations are substantially more serious than a mere 100 minutes of Gmail downtime, that really isn’t the point.

Choice

The point is that there are two choices: Communicate in a manner that generates trust, or communicate in a manner that destroys it.

Business Code of the West

Kinda stands on its own, doesn’t it?

http://www.cowboyethics.org/TenPrinciples.html

It’s what customers want and expect, but in many cases they’ve become accustomed to much less.

Use it as a starting point and deliver no less.