Chamber Members Will Need to Take the Lead on Ethics

Sometimes it feels like corruption is just expected, and you are viewed as a Pollyanna if you think things will ever be any different. Citizens have become desensitized by the seemingly endless string of examples of unethical behavior.

A governor appoints an under-qualified personal friend to a high-level homeland security position even though he is not even a U.S. citizen. A gubernatorial candidate gives $1 million to a well-connected political boss with a well-documented history of shady deals, and the candidate does not understand why reporters are now asking questions about the independence of his decisions. A former senator who was forced to withdraw from his re-election campaign somehow retains control over campaign donations and now funds smear campaigns from behind the scenes. Department heads are told that they need to work around people in patronage positions. A commissioner sees nothing wrong with his church obtaining a single-bid multimillion dollar grant from the state. Several elected officials receive salaries and are eligible for government sponsored pensions from multiple jobs. Although some people called for his resignation due to incompetence, few people seemed surprised or outraged when they learned that the résumé of the head of the country’s emergency management agency had false or misleading information. Few people seem to even question the appropriateness of no-bid multimillion dollar contracts to rebuild Iraq going to the Vice-President’s former company. Business owners in the construction trades simply count donations to politicians as a cost of doing business. If they want contracts in their towns, counties, or state, they had better “pay to play.” Other business owners simply have written off the idea of getting government contracts because they just do not want to learn how to play the partisan game.

The New Jersey Chamber of Commerce (NJCC) has developed The Platform for Progress that features six major initiatives to help grow the NJ economy; one initiative advocates government reform. Members of NJCC, along with several other business-related associations, are taking a stand against corruption, asking for things like campaign finance reform, the elimination of pay-to-play practices, etc.  However, to be a credible and effective force for positive change, we will need to walk-the-talk and lead by example.

It doesn’t take an ENRON-scale problem to illustrate what is involved here. An owner of an engineering firm once told me that he opposes efforts to eliminate pay-for-play practices because it took them such a long time to grow their business large enough to afford to have major politicians in their pockets. He asks why they should give up their hard earned competitive advantage? My question is, “What do we need to do to stop rewarding that type of thinking?”

I have been a consultant and speaker for over 30 years and wonder if I could even count how many times my ethics have been tested. I distinctly recall the day when an owner of a plumbing company suddenly stopped our conversation when the red light on his telephone illuminated to cue him to listen into a bugged conversation. He was pleased because he now had sufficient information to undercut the competitor’s bid by a few dollars and win the bid. He called me an “unrealistic neophyte” when I told him that I did not want to help someone who viewed illegal bugging as a legitimate growth strategy. Another consultant with no hang-ups about “competitive intelligence” replaced me on their strategic planning project within a week.

Frankly, I have been amazed at how many times business owners have said that they value the fact that we protect our client’s proprietary information and then expect us to share details of a competitor’s strategy and/or internal operation. Other prospective clients have expressed surprise that we do not accept consulting projects with direct competitors of our existing clients. Still other prospective clients expect to pay their consultants based solely on a percentage of increased short term net profit and don’t seem to understand that they might be inviting a conflict of interest if/when their consultants are asked to recommend cost-cutting measures that could hurt their businesses. Then, there was the head of a division within a corporation who could not understand why we would refuse to accept payment from the parent corporation to help him/her write a business plan and obtain outside financing to become a direct competitor of his/her current employer. The codes of ethics of most professional associations do not actually require members to become whistle-blowers when their clients do something illegal or knowingly distribute products that are harmful to their customers. However, we decided a long time ago that we wanted to base the growth of our business on helping honorable people. Addressing an error of omission is one thing; protracting an error of commission is another. In many ways, it is a mutual endorsement when we include a person or organization on our client list.

None of our industries, including mine, are completely clean. Sometimes these tests of ethics stem from companies feeling “burned” by other consultants or speakers. How do clients even know who is qualified to provide advice when anyone who is between jobs can declare that he/she is a consultant or a coach? It is very difficult for business leaders to know how to set fair terms for consulting services when their previous consultants have used open-ended contracts and/or seemed more interested in increasing their billable time than in making a real difference. Corporate attorneys are often asked to add provisions to their consulting contracts to ensure that the corporation receives what has been promised. The distrusting tone of some corporate contracts telegraphs when a prospective client has been burned by “bait and switch” practices of other consulting firms where experienced partners negotiate the deal and then junior level associates are actually brought in to do the consulting project. Years ago, I concluded that I would not play in the stock market within my clients’ industries, because it would be too easy to inadvertently base a purchase on inside information or disrupt what should happen. There is a reason why the SEC, competitors and other investors watch where high profile consultants invest their own money.

Problems between business partners and strategic alliance participants are so common that many companies do not ever grow beyond micro-sized/solo practices because the owners have concluded that they just can’t trust anyone else. Even with my focus on business growth, I have often said that the one thing I would never do again is have a 50/50 partnership. At a key point in the growth of my consulting firm, my capacity to attract prospects was dramatically reduced when a few large accounting/consulting firms used their considerable marketing budgets to block me from being invited to speak at industry conferences. If a few other business-related associations wanted the large accounting/consulting firms to sponsor their conferences, they had to agree not to invite me to be a speaker at their events. I still find it difficult to believe that I posed a significant threat to their enormous customer base of business.  And how many stories have we all heard about subcontractors who have signed non-disclosure/non-compete contracts and then approached clients to work with them, thus becoming direct competitors? It stings even more when a subcontractor or employee you have trained uses your proprietary material and/or processes to compete against you.

I can recall dozens of times when I knew I was risking the loss of a consulting contract when I gave my honest opinion instead of simply agreeing with an executive in a client company. The past 30+ years has brought three recessions, so sometimes these decisions have been a little tough on our short term profit and/or cash flow. We have no doubt walked away from a lot of money over the years. Many competitors probably view me as naïve, and I guess I will never have the stomach for what is involved with becoming an elected official. However, I am convinced that we are still in business after all of these years at least in part because we have passed so many tests of our ethics. I suspect we must have unknowingly failed some tests because they are almost constant, but it has certainly felt important to keep trying to pass at least our own tests.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companiesachieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search.  2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

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