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Seven Signs That Your Company
Is Selling Its Soul

Think of it as a huge public Wall Street confessional. Lots of companies, albeit unwillingly, are going to be making public confessions about how they have sold their souls. They will be throwing themselves on our consuming mercy in sickening droves, begging for our continued trust. And we are not going to give it to them.

Big companies, who yesterday wouldn’t let you and I walk on their custom-woven carpet, are on their knees, flailing themselves with thorny branches. Even smaller businesses are beginning to examine themselves to ensure that their practices will bear moral scrutiny. In almost every financial newscast, the opening fanfare screams of some new revelation of corporate transgression. This company didn’t really make the money it claims. That company has cleverly hidden a huge whack of its expenses resulting in a false portrayal of its true profit. Another is admitting to having made deceitful claims about its products. Even those we thought to be squeaky clean, corporations we mingle with every day, are now tainted.

The Baptist Foundation of Arizona stands accused of the largest non-profit fraud in history. Coca Cola found guilty of unfairly trying to shut out competitors in Mexico. Suspicion of financial irregularities are causing people to sue their employers because of declines in pension plans as evidenced in the Enron and Global Crossing cases. Goodness knows what those new investigations will uncover.

Palm has been told to stop misleading advertising about their handheld. Even the Securities Exchange Commission, supposedly a moral watchdog, allowed one accounting firm to violate the rules “several thousand times” in a two year period according to USA Today. And beloved McDonald’s is settling a $10 million lawsuit because it concealed adding beef flavoring to its French fries, causing vegetarians to see red. Tyco, Merrill Lynch, Nike, K-Mart – all have their sordid stories.

As consumers and investors, we have been sinned against for years by corporations. Not by all of course, but by many. Big sins. Little sins. Omissions. Commissions. What else is “sin” but a violation of a high moral standard? What we are seeing are sins of deception on debt and earnings declarations. The sin of putting profitability over product safety. The sin of promises that aren’t kept. The sin of paying huge bonuses to inept leaders while workers continue to lose. The sin of putting shareholder value ahead of doing what is right and of making the world a better place.

Some will see such practices as business as usual. Indeed, we have long lauded the principle of “It’s easier to ask for forgiveness than it is for permission.” So it costs a few million to settle a lawsuit – a small price compared to the hundred million of revenue generated by a deliberate act of deception. Just the cost of doing business!But is it? Maybe we need to step back and take an honest look at what is happening – not at Enron or Andersen – but in our own organizations. Maybe we need to examine our current practices, come clean with our employees, customers, suppliers, and shareholders.

Some will conclude that it’s all a matter of the financials – a “fuzzy math” virus permeating accounting processes, allowing companies to hide their real debt, fake their revenue and thus become instantly profitable. It is literally possible for a company to have been a miserable financial failure yesterday and, with the help of the right accounting firm, be a casebook miracle of success today.Others, like yours truly, see a much deeper issue. I think it is a spiritual problem. Companies all across America are literally selling their souls for another day of life or for another point in profit margin.

Here is how the soul-selling process unfolds. Almost every human endeavor begins in a spirit of innocence and good intention. Someone runs for political office with the absolute sincere desire to make the world a better place. A celebrity launches a foundation to help homeless kids out of honest passion for their plight. A pastor starts a new church because he or she feels God has called them to do so. A businessman sees an opportunity to give consumers a safer and better quality product for their money and refurbishes a deserted inner city warehouse, there giving birth to what becomes a global manufacturing powerhouse.

Fast-forward a few years and what do you have?You find a politician who is just like most of them, making decisions based on what will get them reelected not on what is right. The revelation that the celebrity is taking 70% of donations in payment for “management services.” A pastor driven by insatiable ego reflected in the need to build the biggest and brightest cathedral in history – all to the glory of God of course. A businessman hiring overseas labor for $2 a day and setting up shell corporations in order to drive share value up beyond reality while asking the city for a tax exemption on the warehouse.

Of course there are many exceptions – some people do stay on the straight and narrow. They are our source of hope. May they be lifted up and set on a high place. There’s just not nearly enough of them.

So how can you know your organization is straying into the darkness? I suggest seven signals that your corporate soul is doomed – or, at the very least, in jeopardy.

1. You have the phrase “shareholder value” in your mission statement. If this is the main reason your business exists consider expanding into pornography and drug trafficking. That’s where the real money is. Your shareholders will love you! Am I against great return on investment? Of course not. Find your “higher purpose” as a company and you won’t have to worry about shareholder value.

2. There is graffiti on the “Our People are our Greatest Resource” poster. At the first sign of economic stress what is the first thing most companies do? Cancel executive golf club memberships? Nope. Forget about hiring a Hollywood firm to redesign the logo for a million and a half? Nope. Sell one of the buildings? Are you crazy? Sell off the people – it’s fast and it’s easy. The only trouble is they take spirit with them leaving you with an empty shell of a company.

3. Executive bonuses go up when the actual performance of the company goes down. This is as stupid as it gets. Usually it is justified by the brilliant insight that “it could have been worse.” Here’s an idea – the worse the performance and productivity of each employee, the more you pay them too!

4. Your boss tells you how wonderful everything is a little too often. I get nervous about people who go over the top in running around loudly explaining how things have never been better “under the circumstances.” Hey – tell someone who will believe you! We all know that when our boss swears to us that there will be absolutely no more layoffs – that’s the signal to start packing. If things really are going fine, people will feel it.

5. The company’s recent advertising campaign becomes an inside joke. With the right creative you can make a silk purse out of a sow’s ear! When the ad says your product is “good for you” while your job is to pour mountains of sugar into the mixing vat – something has to give. When the ad says every customer is important while they can’t even get a real person on the phone – people will equate your advertising to bull excrement. When the promotion brags about product quality and you know you are shipping junk, there will ultimately be a price to pay.

6. The Finance Department works through the night to get ready for the bank meeting. As someone once said, “I don’t trust any numbers I haven’t massaged myself.” If there is a set of books on top of your desk and another one in the bottom drawer, the end is nigh. Do your finance people work hard to construct the most attractive picture for the bank? Do they stay up all night working on the books just before the Board meeting? If they are doing their job properly, why would they need to do that?

7. You increasingly drive into work asking yourself, “Why am I doing this?” When we lose sight of purpose, we lose sight of everything – including our values. This is why you hear the concepts of ‘vision’ and ‘values’ in the same phrase so often. They go hand in hand. Without purpose you begin to die, economically and, more sadly, spiritually. Do all that you can to avoid this slippery slope. Business is tough, but this is not the way to gain competitive advantage. Go to whatever pain and expense you must to keep and ensure the trust of your customers, employees, investors and vendors. Do what is right and you will lack for nothing.

Ian Percy is a business speaker, author. Reach him through www.ianpercy.com

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Ian Percy is one of North America's most inspirational speakers.

 
 

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