Tuesday, June 17, 2008

Business/Enlightened Self-Interest

Since well before publishing my first book and turning from businessman into consultant, I've been preaching the gospel of Enlightened Self-Interest: that doing the right thing pays. With our language school, the pitch is that employers who pay for the English lessons of their workers benefit immensely through better-trained/more efficient workers whose morale and loyalty is unshakable; a greatly expanded pool of potential managers (no matter how talented you are, you can't manage if you don't speak the language), greater morale among the rest of the workers, who (a) don't feel their co-workers are talking about them in Spanish, Vietnamese, etc. and (b) love working for a company that actually cares about its people, even its lowest-wage workers; vastly-improved customer service; increased customer loyalty, because they too like buying for a company that shows it cares... The list of benefits goes on and on.

The trick here is, there's no trick. Our clients tell us these are the tangible results of our training. They pay a little (but not too little!), and benefit a lot.

That is the case with workplace ESL lessons, but the point carries over to the entire realm of enlightened management. A quick review of the companies out there that treat their people better than the market demands, that conduct themselves ethically even when no one is looking (the only legitimate test of ethics), that treat their suppliers and customers fairly rather than exploitively, that give to charities either directly or (better) through matching employee contributions - these companies perform better than their competitors.

Of all his points, the one I take most exception with is Milton Friedman's notion that there is a duality between doing the right thing for "pure" motives and doing the same exact right thing for selfish gain. Try as you might, you can't separate the two!

When I was in college studying philosophy, I came to understand the same thing regarding altruism: there is no such thing as a purely unselfish act. Even if no one else knows what you've done, and even if it harms you while helping strangers, it still benefits you in some way, at least through a feeling inside that you have done the right thing. So too with corporations: there is nothing "right" that a company can do that will not benefit that company in some way...

...although I must make clear that sometimes the right thing to do could cause the company's demise. Imagine if Phillip Morris simply stopped making cigarettes - didn't sell off its operations, just closed them. They'd go bankrupt the same day.

Some companies are inherently good; it's built into their DNA, part of their founding culture. I have to research this company better, but I think Johnson & Johnson is one such firm (either that or they've really done a great snow job!) Other companies are inherently evil and destructive, and that's also built into their DNA starting with their founders: Blackwater, Halliburton; all tobacco companies.

But the vast majority of companies are wandering around in the middle of the road, pursuing profits as best their leaders know how without bothering (or daring?) to stand for anything ethical or good. I really believe that such companies - and such leaders - need "permission" to do the right thing: that most would like to, but how can they do the right thing when they're just getting by?

One of the main functions of The Naples Institute, as I envisioned it from before I even approached Gene Landrum and Bernie Turner with the notion, is to create an authoritative, revered institution that gives business leaders that permission. An organization that teaches enlightened leadership, that publically recognizes enlightened management, and that plainly, undeniably illustrates how doing the right thing - being enlightened - serves the best interest of the individual, the leader, and the organization.

Reader, your thoughts are not only welcome, but sought after.