February 2010

EthixBiz Buzz

Electrifying Transportation: Foreign Oil or Domestic Electrons?
St. Mary’s College’s Graduate Business Alumni Chapter invites you to an evening program, March 11, 2010, 6:00-8:00 p.m., on the future of transportation. Why would we want or need an electric or hybrid vehicle? What will we have to choose from? What kind of maintenance will be required and where would we get it? Where and how would we charge (fuel) our vehicle? What will be the costs for all of this? Those are just some of the big questions facing individuals, businesses, and communities. Come together for an exciting evening of the latest information and a free-wheeling discussion with several leaders in the field. Arrive by 5:30 p.m. to take a look at a few display vehicles and invest in your network, old and new. More info and advance registration (recommended!) at: www.smcbusinessalumni.com/transportation

Oh Toyota!
Yikes. The world’s greatest automaker has taken a tumble with all the recalls and uncertainties about who knew what when. It will take some time to find out whether and to what extent company officials were living in denial, not knowing or believing anything was wrong --- or, much worse, knowing something was wrong with the accelerators and brakes and denying it. The Toyota culture has been rock solid on ethics and excellence for decades. The quality of their vehicles is unmatched in their price range. My Camry, Tercel, and Prius have been absolutely flawless over twenty years of service. Flawless over 200,000 miles of driving in all conditions. So something’s wrong (my guess: the newer computer components replacing older mechanical components) and those responsible have to step up. My money is on Toyota making a full recovery, like J&J did after the Tylenol scare.

Weapons Business Bump in Road
Amarco Goncalves, vice president for sales at Smith & Wesson was one of twenty-two US weapons manufacturing executives arrested for agreeing to pay bribes to get a piece of a $15 billion contract to equip the presidential guard of an African country. All of the defendants agreed to pay a 20% “commission,” half of which would go into the defense minister’s pocket. They all confirmed their agreement with an e-mail. (New York Times, 21 Jan 2010). This is illegal under the 1977 Foreign Corrupt Practices Act. And you were wondering how some of these vicious dictators are able to liquidate all of their opposition, terrorize their citizens, and keep their people mired in squalor and disease? Here’s how it works: companies that want access to oil and other raw materials pay bribes and fees to corrupt dictators --- who then buy powerful weapons from ethically impotent manufacturers. It’s the free market. Don’t you love it?

China Green Syndrome
China jumped past Denmark, Germany, Spain and the US to lead the world in production of clean energy wind turbines in 2009. By 2008 they had become the world’s leading manufacturer of solar panels. And they are pushing hard to take the lead in nuclear reactors and the most efficient types of coal power plants. (Boston Globe, 31 Jan 2010) Will the West trade its dependence on the Middle East for oil --- for a dependence on China for solar panels, wind turbines, and other clean energy gear? Kind of looks like it.

Dr. DuBuske, Physician for Sale
Dr. Lawrence DuBuske resigned from his post as an allergy and asthma specialist at the prestigious Brigham and Women’s Hospital and Harvard Medical School rather than bow to new ethics rules limiting pay to doctors to shill for pharmaceutical companies. DuBoske was paid more than $100,000 to give 40 speeches during a three month period last year. (Boston Globe, 31 Jan 2010). Was that the Hippocratic Oath --- or the Hypocritic Oath --- he took when he graduated from med school?

GlaxoSmithKline CEO Witty: Bravo!
Andrew Witty, CEO of GlaxoSmithKline, the world’s second largest drug company, is pushing his company not just to make profits but to make a difference in world health, especially among the poor. With a set of values inspired and deepened by significant on-the-ground experience among the poor in Africa, and seeing how resilient these populations could be, Witty has taken Glaxo to the number one rating on the Access to Medicine Index. In poor countries Glaxo never charges more than 25% of what rich ones pay for their drugs; and 20% of all profits made in poor countries are donated to help improve the health care systems in those countries. In a huge project to find a cure for malaria, Glaxo promises not to charge more than 5% above the cost of manufacture if and when the drug is available. It may seem small but the message was unmistakable when Witty moved his office from the top floor to the ground floor of Glaxo headquarters and chose to eat in the company cafeteria with everyone else.

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Ask Dr. EthixBiz

Info Protection

Dear Dr. EthixBiz:

In the line of work I am in, our employees have exposure to highly sensitive and highly confidential financial and legal information. This information is sent to our employees via hard copy mail, faxes, and emails.  We have data storage bins and shredders to ensure that this sensitive information will not be exposed outside of our offices. 

However, recently I was walking by the printer and noticed that a printout of a list of names with social security numbers was in the ordinary recycling bin.  Knowing which of my colleagues had been working on this file, I went over and dropped the list on his desk and reminded him gently that he should be careful with them.  He then really shocked me by saying that it was not a big deal, that the regular recycle bin was fine because the material didn’t not have any financial or legal material.  I told him that the paper had names and social security numbers, but he kept insisting that it was not a big deal.  After a few minutes of conversation he said that he would “try” to remember to put anything like that in the secure data recycling box, if it was not too full.

Was this as big a deal as I thought or was I being overly concerned?

-S.M.

Dear S.M.:

You were definitely right to be as concerned and persistent as you were. Thank you. Maybe that was my info! In our era such personal information is very vulnerable and must be carefully protected. Any company that does not protect its sensitive client information must be called on the carpet and vigorously prosecuted in any case of harm to the clients. It can be a horrible experience trying to regain your identity and security from acts of theft and breeches of security.

Your actions were right on, perfect. But it also is important in this case for you to alert management that some additional, clear, convincing, and repeated training on company policy is needed. Some kind of redundancy or better supervision is also important. Don’t just depend on one person to carry out these privacy protection policies --- make sure there is a second responsible person checking to oversee and make sure it all gets done properly and completely.

--Dr. EthixBiz

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The EthixBiz Review

Dr. EthixBiz strongly recommends that all business managers and leaders commit to reading one book per month throughout their careers. New material, classics, novels, histories . . . read something that broadens and deepens your thinking.

The Seven Habits of Highly Effective People

by Stephen R. Covey (Simon & Schuster, 1989)

Stephen Covey’s massive best-seller came out in 1989. Twenty years later it still reappears on the best seller lists fairly regularly. What’s going on here? Seven Habits is a very readable and practical book, for one thing. It is almost surprisingly “thick” in its content --- in no way to be compared to the little best-selling tales and fables that distill down to one or two good ideas. Seven Habits is the kind of substantial feast of ideas one can read with profit a second and third time.

I confess that Covey’s title turned me off for years: “habits of effective people” I shrugged? How about habits of “ethical people.” Hitler and Machiavelli were about “effectiveness.” Weapons technology is about effectiveness --- but effective for what purpose?

But my reaction was unfair, as it turns out. Covey’s effectiveness is effectiveness in being an authentic human, with good relationships and a meaningful, purposeful life. I still wish he used another term. But since his books sell millions and mine sell thousands I have to yield to his better judgment. (As an aside, Ken Shelton, the editor and publisher of Executive Excellence Publishers, the publisher of my book It’s About Excellence: Building Ethically Healthy Organizations), played a big role in Covey’s Seven Habits project, including editing the first manuscript).

So maybe everyone but me has read Seven Habits but just in case. Covey’s book is subtitled “Restoring the Character Ethic.” It’s about developing character, rather than focusing on personality, image, and human relations techniques. Like Aristotle, Covey argues that our character is a composite of our habits. Covey’s first three habits concern “private victory” --- achieving “independence” in one’s life. First, be proactive. Second, get clear on your purposes and ends and let them guide your actions. Third, get your priorities straight and manage your time and tasks well.

The next three habits (four, five, six) concern “public victory” --- becoming skilled and effective in relational interdependence. The fourth habit is to think win/win about things, rather than win/lose or zero sum. The fifth habit is “seek first to understand, then to be understood.” The sixth habit is to “synergize” This is “the essence of principle-centered leadership. . . It catalyzes, unifies, and unleashes the greatest powers within people. All the habits we have covered prepare us to create the miracle of synergy. . . it means that the whole is greater than the sum of its parts.” (pp. 262-63). It is not just that each of us “wins” but that our victory together is greater than what we could have achieved alone. The final habit concerns self-renewal --- “sharpening the saw” --- making sure you stay sharp, get refreshed and renewed and keep growing all your life.

---David W. Gill

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Gill's Benchmark Ethics

Mistake-Tolerance & Learning: The Sixth Trait of a Healthy Culture

Learn and try again; avoid punitive, fearful, repressive reactions

Benchmark Ethics is taking ten months to describe ten basic characteristics --- “core values” --- of healthy corporate cultures. The sixth characteristic or value is the habit and inclination to see mistakes as opportunities for learning and as the inevitable accompaniment of a “go-for-broke” culture of freedom and experimentation. If we can tolerate no mistakes, we will build a culture of fear and timidity.

An organization that aims high is not always going to achieve its ambitious goals. Mistakes will be made. Nobody bats 1000. If you step up to the plate you will strike out now and then. My friend Al Erisman tells me Wayne Gretsky once said “You miss on 100% of the shots you don’t attempt.” A sure way to kill off the ambitious attempt at greatness is to punish failure. Punishing honest mistakes stifles creativity. Have you ever noticed that on great sports teams a placekicker who misses is usually consoled and encouraged rather than screamed at by his teammates when he comes off the field? That a missed free throw isn’t followed by silent treatment from teammates or getting benched by the coach? Hand slaps and encouragement instead. Is that how it is in your organization? When your people make a mistake or strike out?

On the other hand, learning from mistakes encourages healthy experimentation and converts negatives into positives. There is a place for mercy and for generosity in business. As we noted earlier on this list, if we want people to step up and be accountable and responsible, we must not overreact and crush them. If we want them to aim high, they may come short and we must not crush them at that moment.

The basic principle of justice and fairness is proportionality: to each his/her due. Accountability and responsibility mean that people stand up and take what they deserve. But the passion for justice, ethics, and excellence must be qualified. If we take a larger view of the context in which business goals are pursued, an honest---but failed---effort at achieving something great should not be viewed in the same way as an effort that failed for lack of preparation or care. Some business leaders have told me that a mistake might be tolerated once, but repeating the same mistake twice is another story. Perhaps it is not a mistake but true negligence the second time around.

Certainly companies with an emphasis on research and new product development (e.g., pharmaceuticals, technology, entertainment) have to embrace this cultural trait. When bad things happen, part of the learning is to put safeguards and back-up systems in place the next time to minimize the impact if something starts to go awry. Such companies must learn to tolerate mistakes made in good faith efforts --- and turn those mistakes into learning experiences. The business payoff is a workforce without fear of trying things that are new or difficult, a workforce that learns from its mistakes rather than living in denial or blame or the likelihood of repeating them.

In philosophy and theology the quest for justice is important but if we get stuck only on justice and fairness, our world, our organization, and our relationships are paralyzed. What the good life and the good organization demand is justice tempered by mercy. Excellence really matters but ironically if we don’t handle the occasional lack of excellence well, we will never get to our goal.

-David W. Gill
© 2010 David W. Gill.

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