YOUR BUSINESS CODE OF ETHICS: RIGHT AND WRONG VS. LEGAL OR NOT?
5 sept, 2016
“You will never be as rich as I am. You conduct business based on what’s right and wrong, and I do business based on what’s legal or not” — Two Unnamed Business Partners
Note: To stay out of a witness protection program (a slight exaggeration), the names of my cohorts will remain anonymous.
Good day ethical Ex-Execs,
What’s your business code of ethics?
Is your decision-making guided by right vs. wrong or winning at all costs? Why do I ask? As you well know, fortunes are often made by taking advantage of legal loopholes or “gray areas.” I experienced this time and again during my corporate days, but it has affected my income and outcomes even more during my tenure as an Ex-Exec.
Upon becoming an Ex-Exec, I completely underestimated and undervalued the free protection I enjoyed in the corporate world. Protection came in the form of having a guaranteed paycheck, free top-notch accounting teams and “free” legal counsel that would fight all of my legal battles.
I am a nice guy who lives by right and wrong. Unfortunately, many whom I have worked with, do not play by the same rules and have suffered some tremendous hardships. I often have awoken at 2 AM wondering if I had gone overboard in my quest to be an ethical business person. Many Ex-Execs, who I have gotten to know, share similar tales of woe. “We” wonder: What’s the fine line between being nice and being a smart business person? What can a “nice guy” do to protect himself?
The goal with this post is to open your eyes to the truth and provide ways to protect yourself.
BUSINESS CODE OF ETHICS: MY MORAL DILEMMA… AND YOURS?
Here’s my story on how I unsuccessfully dealt with partners and associates who were masters of the gray area and made fortunes at the expense of others.
Twice in my life as an Ex-Exec — but ten years and 1500 miles apart — identical words of business wisdom were lectured to me by two wickedly successful entrepreneurs who I had the privilege (was it?) of working with for an extended period. One was a noted executive in the publishing world, the other an infamous restaurateur. Each proclaimed: “You will never be as rich as I, because you conduct business based on what’s right and wrong, and I do business based on what’s legal or not” Can you relate?
Each relationship started with a feeling of divine euphoria — I’m going to be FILTHY RICH! But as each relationship evolved and got more complex, I realized that my view of ethics was 180 different than my counterpart’s. Both of my not-so-kindred comrades continuously outdueled the competition by knowing what was legal and what was not. They lived by mottos such as “Never ask for permission, only ask for forgiveness”. And, “Biz is biz and life’s life. Never the twain shall meet”. Books such as “The Art of War” enabled them to climb to the top of their industries.
Both stole ideas and money from those less fortunate because they had savvier lawyers who constructed lopsided contracts. Each preyed on the nice and smart. When I witnessed and brought up an unethical act, each would laugh the haughty laugh and say “Mark, business is war, and I like to win. The truth is, I’m not doing anything illegal”.
Initially, their rebuttals were stern, but affectionate, as each wanted me to succeed in the worst of ways. But over time, as I stubbornly held my ground and refused to conduct business on their terms, things got ugly. Witnessing questionable business practices were one thing, but once I was asked to participate, my anger ignited and I spoke up. Once I did, each relationship abruptly ended.
Beyond the two aforementioned characters, I have encountered dozens of questionable business deals. Chances are, you will too.
WHAT’S RIGHT & WRONG — FOR YOU?
Should I have avoided those situations from the get-go? Should I have caved-in and cashed out? There is no firm answer. Deals must be evaluated on a case-by-case basis.
Truth is, if you are driven by integrity, life as an Ex-Exec can be challenging on many fronts. As today’s presidential race reveals; truth and integrity often run a distant second to winning at all costs. In an ideal world, we would all like to work with kindred spirits and conduct “business on a handshake”. But alas, that’s life in la-la land. You will encounter con men. You will meet connivers and bullies who will spin your head and use legal loopholes to win at your expense.
PROTECTING YOURSELF: 10 BUSINESS CODE OF ETHICS TACTICS
Although my ethical do-good deeds have garnered repeated accolades: “Good for you. At least you can sleep at night”, I regret how I handled many of those relationships, as my short and long term income were dramatically altered. To this very day, it’s a dilemma I deal with on a weekly basis. I continually run into others who are “Hollywood-esque good guy actors”, but, behind the scenes mimic Madoff.
In hindsight, my holier than thou methods of doing business were stupid. I didn’t have an “ethics’ plan”, and so I continually danced around tough issues. Fortunately, I have uncovered smart ways for an ethical Ex-Exec to protect himself (to some extent) and be better prepared when dealing with ruthless bastards.
- Develop Your Own Business Ethics Plan: Make a list of potential ethical issues and decide where you will draw the line. Do your homework to see how others have handled similar situations.
- Create Boundaries Up Front:Be proactive in your discussions and agreements. Don’t be afraid to bring up issues that you could encounter.
- Realize Trust Must Be Earned: Never assume that someone or an organization is trustworthy. Do things early on that tests trust.
- Always listen to your gut:Take immediate action once you lose trust in a client or business partner.
- Hire an SOB lawyer.Pay whatever it takes for tough representation. It will be worth every penny, no matter how many thousands you invest. (My story: When dealing with an unpaid, six-figure bonus from a Fortune 100 firm, I regretfully turned away an infamous mafia lawyer who was dying to take on the corporate giant. I was chicken shit — too scared — and it was a big mistake not hiring him.). Being represented by a tough SOB command respect.
- Hire a brilliant, creative accountant.Hiring a “creative numbers guy” can help you sign smarter deals and keep more, legally. Your kids and family will thank you for this smart hire.
- Hire a pit bull collection’s bitch.(Note: I know this sounds sexist, but…) If you deal with male clients, I recommend hiring an attractive, but tough, female to handle your collections. Let that person be the bad cop while you focus on your strengths including building sound relationships with your clients. (Side note story: Cindy (An amazing project manager and collection’s agent), used her charm and good looks to hound my clients like a pit bull. Being hard-assed businessmen, they enjoyed playing tug-of-war with Cindy. And even more important, I gained considerable respect from my clients for hiring Cindy to do my dirty work.
- Always correspond in writing.Beware of those who purposely — and continually — avoid the written word and make decisions/deals over the phone or in-person. If that’s the case, immediately summarize your conversations with smart CYA emails. Print them out and file them.
- Play hostage.On the verge of being screwed out of money? Play the hostage game. Don’t hand over materials until you are paid-in-full. I hate this game. But, the truth is, this type of situation demands hardball tactics. There’s a good chance this action will end the relationship. That’s good. Do you want to continue to do business with someone you can’t trust?
- Don’t do it alone. When experiencing a high stress ethical vs. legal issue, share your story with a trustworthy friend. Be cautious of sharing with your wife as she may stress you out even more.
Agree? Disagree? Ready to debate?
All the best,