Ethics, Integrity, and surviving the Long Term
Recent history is thick with hot-shot companies that flame out in scandal, but we rarely hear about the survivors. J.E. Rhoads and Sons, for example. Founded in 1702, it was sold to a corporation in 1995, only to be rescued by a former employee, who started working at the plant at 19 years old. Their quality are still in the market under his company, MidAtlantic Belting. To date, Rhoads and Sons remains the longest continuously operating American company, in business for 293 years. The average life of a modern corporation is 40.
Somehow Rhoads and Sons managed to navigate five major depressions, the industrial revolution, the technological revolution, and most recently, outsourcing to Asia.
Their founder ascribed the company’s success to a commitment to “treat people as they want to be treated,” customers and employees alike. Their dedication to this principle survived, and for most of the 20th century, “Rhoads family members and managers often left the company for months at a time to do work that helps mankind” (according to an article by Nancy Sheperdson from 1993). The same principles drive MidAtlantic, which carries on with their two premier lines.
Can ethics really be key to long-term success? Yes. J.E. Rhaods and Sons, 300 years of staying in business
According to the New Oxford American Dictionary, ethics means, “moral principles that govern a person’s or group’s behavior.” Now don’t get me wrong, I am not a moralist. I am a pragmatic person. I am fascinated with what makes businesses work. So in the spirit of better business, I invite you to consider this “definition” with me in light of your business. Is your business driven by moral principles? Not MORALISTIC principles mind you, empty memorized rules given to us by others. But true morality, humanistic morality: what used to called an inner compass.
Is doing the right thing inextricably tied to long-term success? Rhoads said yes. Is it in our own best interest to act with the best interest of all in mind: “stake-holders”: customers, suppliers, the community, society, government, and even, forgive me, competitors?
I won’t hold my breath waiting for an academy award winning film about the Market with the line “Ethics is Good.” But far from the imaginary world of cinema, it is.
I once knew a waiter who after an evening at the race track told me “at one point I was up 500 dollars, just before I lost my paycheck.” (See Enron, Worldcom, Adelphia, and some would say, given their current condition, Ford.) Short-term profit, in fact, may seem like “easy” money, but long- term profit will always overtake it in the long run, no matter how great that profit is in the short run.
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