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Comments from J.D. Bullington | Keynote
Address M. Daigneault | Keynote
Adress W. Michael Hoffman
Values Are Our Business
Keynote Address 2002 - Michael
Daigneault, Esq. - © 2002 Michael G. Daigneault
Thank you for your wonderful introduction. I appreciate your kind words. I
confess, however, I shouldn't expose an artificial sense of modesty
about what you said about me as I am mindful of Golda Meier's rebuke
some years ago to a visiting dignitary-"don't be so humble-you
are not that great."
I want to thank the Samaritan Counseling Center and all of you
for asking me to be with you this evening. It is a pleasure and
an honor-particular when ethics, values and corporate social responsibility
are the high profile issues they are today. I would also like to
thank the PNM Foundation for their support of the Award for Individual
Excellence in Ethical Business Practice in honor of John Ackerman,
their former CEO. Congratulations to Donald "Duffy" Swan
for winning this year's award!
I will have the joy of joining Professor John Ackerman tomorrow
in conducting a set of classes at the University of New Mexico on
Parable of the Sadhu. A fascinating tale of life-and death-while
hiking the Himalayan Mountains and the lessons we can learn about
individual and business ethics. John-I look forward to it!
Let me congratulate all of the organizations (and the individuals
representing them) here this evening. To be considered for-or to
win-such an award means that you are doing something right. Indeed,
it surely means that you, your leadership and employees are doing
a lot of things right. As you will gather from my remarks, I think
your task is an absolutely vital one and I applaud you for doing
it so well.
I congratulate French Mortuary. The unfortunate events that have
recently unfolded involving a Florida crematory point out how important
the values of trust and integrity are in their profession and in
dealing with our loved ones. I also congratulate Standard Machine
Company for creating a business culture where people feel valued
and where they want to work. Can I work there, too?
I am elated that a CPA firm-Atkinson & Company-is being recognized
this evening. It is a timely reminder to all of us that the entire
accounting profession should not be tarnished for the actions of
some among them. I fear, none-the-less, that the issues involved
go far beyond jus a few folks at Enron and Arthur Anderson. More
about that in a bit.
I was a non-profit Executive Director and President for some fifteen
years. It is not any easier (indeed-I might argue at times it is
harder) to sustain an ethical non-profit organization. ACCION New
Mexico seems to have really found the means for doing so. Congratulations
for being such positive stewards of the public trust.
I have entitled my remarks this evening "Values Are our Business"
because of the crucial role that values play in our world at three
fundamental levels (1) at the personal level-in our lives and those
of our family and friends, (2) at the organizational level and,
in particular, in our organizations and (3) at the societal level-here
at home and as part of a global society.
What do you mean by "Values?" Attitudes or beliefs that
guide your behavior. Aristotle called them habits of good character
that helped to define a person of virtue-or as we would term it,
a person with positive ethical values. My view of what ethics is
all about is based on how each of us-and the groups we form-lives
out our values.
Now if you asked fifty ethics experts what they believe the definition
of ethics to be you would likely get fifty different answers. My
view is that it is about standards of conduct which indicate how
we should act or decided based on principles and duties arising
from core values. Ethics is thus the thought process that comes
into play when we are deciding right from wrong or in some cases
when weighing and deciding between two rights. It establishes the
process of using appropriate principles of decision-making, even
when values may have to be balanced against one another.
Human Scale: As the father of two small boys I have begun to realize
more each day that my wife and I have taken on a daunting task.
That task is the education of two young men into what could be loosely
described as good people and productive citizens. As with each of
you, the most we can do is to try to pass along the best of what
we learned at the knee of our mother and father or occasionally
make minor improvements in such lessons where changing circumstances
demand them.
At the center of this effort is the sharing of our family value
system with them: love, caring, sharing, respect, responsibility,
honesty, and fairness. Any one of you who has had to deal with a
bright-yet headstrong-three year old realizes that this is a challenging
task indeed. And yet it is in the little victories of the spontaneous
"I love you Mom," the hugging of a brother who just fell
and hurt himself, or the cleaning up of toys at the end of the day
that the individual and family values we espouse begin to be actualized.
In essence, values are our business at home. My wife and I make
it our business to pass along a strong set of core values to our
boys so that they might be best prepared to flourish as human beings
throughout their lives. I, and a great many child experts, are convinced
that what happens in the early formative years-and the values that
children learn-is crucial to being a successful person, friend,
parent and citizen.
Corporate Scale: Similarly, at the organizational or corporate
level, values are critical to success. Now some of you-or some within
your organizations-might suggest that the business of business is
business and that talk of values at a corporate level is nice-but
certainly not the essence of economic success. Indeed, it could
be argued that a focus on a "soft" business concept such
as values could distract an organization from the tasks at hand
and thereby harm "the bottom line."
Interestingly, enough, a six-year study was done in the early 1990's
that had a dramatic impact on how many of us look at the question
of values in a corporate setting. Two researchers from the Stanford
Graduate School of Business, Jim Collins and Jerry Porras set out
to discover "What makes the truly exceptional companies different
from the other companies?" Their quest was to discover the
"timeless management principles that have consistently distinguished
outstanding" or what they termed "visionary companies."
Their findings are reported in a remarkable book entitled Built
to Last: Successful Habits of Visionary Companies which, if you
have not read it I heartily recommend to you. (There's that "habit"
word again-Aristotle would be proud-but I am getting ahead of myself.)
What Collins and Porras found was rather remarkable. Visionary
companies that were the premier institutions in their industries
all had something in common. Such companies had found a way to achieve
a dynamic tension between continuity and change. Collins and Porras
termed this "preserving the core and stimulating progress."
That is, the companies found a way to preserve and communicate their
core purpose and values over time while simultaneously allowing-indeed
encouraging-change in their operating practices, goals strategies
and the like.
"Over time cultural norms must change, competencies must change,
strategy must change, product lines must change, goals must change,
competencies must change, administrative policies must change, organizational
structure must change and reward systems must change. Ultimately,
the only thing a company should not change over time is its core
ideology (its core purpose and values)-that is, if it wants to be
a visionary company."
What was the fundamental glue that held visionary companies through
change in products, leaders, and difficult economic times? What
was it that helped visionary companies beat their competitors and
remain strong enough to consistently innovate? It was their core
values and their ability to sustain those values over time. One
of the remarkable findings of the study was that sustained core
values are a key to economic and corporate success. In hard economic
terms, they showed that money invested in visionary companies would
have grown at a rate of fifteen times that of the general market.
Reason enough to pay attention to the values of an organization
but, of course there is more-a great deal more as the companies
represented here today exemplify. The many benefits of paying close
attention to the values and business ethics of an institution are
now widely known and accepted but are worth mentioning for the skeptics
that still lurk amongst us. Those benefits include:
- Recruiting and retaining top quality people;
- Building and sustaining your organization's positive reputation-or
brand-in the marketplace;
- Fostering a fair, productive and efficient work environment;
- Reducing risk from unethical or illegal entanglements;
- Enabling employees to raise important questions and express
concerns before those concerns become larger issues;
- Helping to align and harmonize the work efforts of geographically
dispersed or decentralized work groups.
There is ample empirical evidence to support these claims. Organizations
that have formal ethics programs and have successfully integrated
their values and ethics practices throughout their operational culture
simply have more positive ethical and business cultures. A recent
and excellent study by the Ethics Resource Center-their National
Business Ethics Survey-indicates that when employees see their leaders
and supervisors modeling ethical behavior and see values such as
honesty, respect and trust applied "frequently" at work
then:
- They experience less pressure to comprised ethical standards;
- They observe less misconduct at work;
- There is a greater willingness to report misconduct;
- There is greater overall satisfaction with their organizations;
and
- There is a greater likelihood of "feeling valued"
by their organizations.
All of these factors are vital to achieving a positive ethical
and business environment as well as helping an organization's brand
succeed, positively distinguish your organization from others, attract
high quality employees, and help attract and sustain your customer
base. In short, values are as important to corporate or organizational
success as they are to personal or family success-values are your
organization's business.
Enron - None of us can leave here this evening without reflecting
on Enron. I do not know whether the company will survive. I do not
know the outcome of the myriad of legal cases initiated as a result
of its actions and decisions. I do not know who knew what and when.
I do know, however, that the leadership of Enron is ethically responsible
for what has happened in one of three ways. You may choose the option
you are most comfortable with-the result is still the same.
One - the leadership knew exactly what was going on and should,
therefore, be held responsible for the unethical and likely illegal
actions of their company.
Two - the leadership knew enough of what was going on to knew that
they didn't want to know more. Thus they willingly turned a blind
eye to the business reality they had created and were now intentionally
perpetuating. Intentional ignorance of the facts is no excuse. The
leadership should, therefore, be held responsible for the unethical
and likely illegal actions of their company.
Three - the leadership (some of whom were known for their hands-on
style) somehow did not know what was going on. They were ignorant
of the out-of-control train they were driving. They may not have
known, but the point is-they should have. Once again, the leadership
of Enron should be held responsible for the actions of their company.
There is no escape.
Enron had every opportunity-as other companies have-to establish
a culture where the types of inappropriate decisions and behaviors
they engaged in would be regarded as totally unacceptable. They
choose otherwise. Indeed, one could wonder if they had spent just
a small fraction of their resources on a meaningful ethics or integrity
strategy where they might be today. Realistically, they may not
have soared quite so high but they may not have crashed and burned
either.
Societal Scale: Last, but certainly not least, it is important
to touch upon the issues of values at the societal level. In his
most recent book entitled Trust: The Social Virtues and the Creation
of Prosperity, Frances Fukuyama analyzes how economic life reflects,
shapes, and underpins modern life itself. He notes how liberal political
and economic institutions depend on a healthy and dynamic civil
society for their vitality. He argues that the usual and widely
accepted forms of economic interaction (1) that actors will act
in their own self-interest and (2) contracts are vital to form a
meeting of the minds pale in comparison to a much more potent force.
The most effective organizations are not based on self-interest
or contract but are based on "communities of shared ethical
values." Trust is the expectation that arises within a community
of shared ethical values in which there is regular, honest, and
cooperative behavior, based on commonly shared norms, on the part
of other members of the community. (We trust Doctors-Hippocratic
oath).
Civil society is a complex web of intermediate institutions, including
businesses, voluntary associations, educational institutions, clubs,
unions, the media, charities and churches. Each of these builds
upon the family, "the primary instrument by which people are
socialized into their culture and given the skills that allow them
to live in broader society are transmitted across generations."
These things cannot be legislated into existence. "A thriving
civil society depends on a people's habits, customs and ethics-attributes
that can be shaped only indirectly through conscious political action
and an increased awareness and respect for culture."
Perhaps the most crucial area of modern life in which culture exercises
a direct influence on domestic well being and international orders
is the economy. "Economic activity represents a crucial part
of social life and is knit together by a wide variety of norms,
rules, moral obligations and other habits (namely, values) that
together shape the society." Indeed he goes on to state that
perhaps "the most important lesson we can learn from an examination
of economic life is that a nation's well-being, as well as its ability
to compete, is conditioned by a single pervasive cultural characteristic:
the level of trust inherent in society."
Let me say that again-slowly: "the most important lesson we
can learn from an examination of economic life is that a nation's
well-being, as well as its ability to compete, is conditioned by
a single pervasive cultural characteristic: the level of trust inherent
in society." The greatest economic efficiency is not necessarily
achieved by the traditional economic notion of rational self-interested
individuals but, rather, by groups of individuals who, because of
their community of trust are able to work together effectively.
One can see the logic. If people trust one another because they
are operating out of a common set of ethical norms, doing business
costs less. There are lower transactional costs. Higher efficiency.
Fewer disputes. Once again, I should note "ultimate success"
is based on shared values. In this case, it should also be pointed
out that it is the combination of both individual and social virtues
that make success possible. As such, values are our business on
a societal level as well.
Conclusion: As Fukuyama notes, beyond the boundaries of specific
nations, this heightened significance of values and culture extends
into the realms of the global economy and international order. H.G.
Wells once said, "human history becomes more and more a race
between education and catastrophe." Never have his words been
as prophetic as they are today. Be it the environmental damage we
do, the collapse of family values, the intentional betrayal of our
trust by Enron or the killing of innocent lives by terrorists, each
and every one of us is called to create a world in which such events
are unacceptable. Accordingly, all of us have some real work to
do when we leave here this evening. Maybe it is with only one other
person, maybe at work or in a community organization. Each of us
can help make positive ethical values a reality-individually, in
business and in our society at large. It is a difference you can
make!
There is a saying by Gandhi that hangs above my desk that I think
captures the essence of what I am suggesting to each of you.
Keep your thoughts positive
Thoughts become your words
Keep your words positive
Words become your behaviors
Keep your behaviors positive
Behaviors become your habits
Keep your habits positive
Habits become your values
Keep your values positive
Values are your destiny.
History has come calling and we-as a people-must answer that call.
We can answer it by recognizing the tremendous force that ethical
values play in our lives. We can answer it by living lives in which
we consciously celebrate our individual and family values. We can
answer it by building and sustaining companies in which values play
a central role in the definition of corporate success. We can answer
it by building a society and a world in which values such as trust-the
residue of promises fulfilled-is fully realized for the benefit
of all mankind.
As you can see, today as much as ever before, values are our business.
Michael Daigneault, Esq. is the Director of Advisory Services
& Marketing for DeLeon & Stang, an accounting and professional
services firm headquartered in Maryland, where he is immersed in
the day-to-day management and ethics issues of businesses and non-profits
alike. Mr. Daigneault is also an Adjunct Professor of business ethics
and corporate social responsibility at Georgetown University's McDonough
School of Business in Washington, D.C. Mr. Daigneault is the former
President of the Ethics Resource Center in Washington, D.C. one
of the nation's premiere ethics institutions where he had the opportunity
to travel the globe promoting ethical business practices.
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