Tag Archives: Greed

The Week in Ethics: Gordon Gekko, Trust, and Corporate Culture

The “Greed is good. Greed is right” mantra of film character Gordon Gekko in 1987’s Wall Street, has been upended by the actor who played him. The FBI is using Michael Douglas in a Public Service Announcement, launched in the last few days, to encourage viewers to report securities fraud and insider trading to the agency.

Douglas who won an Oscar for his portrayal of Gekko 25 years ago, says in the PSA:” Our economy is increasingly dependent on the success and integrity of the financial markets.”

Gekko’s mantra hovered over the 2008 global economic meltdown. Goldman Sachs appeared among the most visible of the standard bearers for greed. In the meltdown’s immediate aftermath, executive compensation amounts on Wall Street and elsewhere seemed to mock the damage done by a focus on short-term profits.

Calamities have long tentacles. The subprime mortgage mess – considered one of the drivers of the financial crisis – continues to impact the U.S. economy, in terms of foreclosures, housing prices, lawsuits, and ongoing investigations of banking practices by federal agencies.

Bloomberg reported today (February 29, 2012) that the Goldman Sachs Group Inc., Wells Fargo & Co. and JP Morgan Chase & Co. are among the banks recently receiving Wells notices from the Securities and Exchange Commission, “warned…they may face civil claims tied to sales of mortgage-backed securities.”

Greed’s toxic power in a work culture can start out as an aphrodisiac, motivating people to work harder to succeed. All too quickly it takes on a narcissistic drive that leaves customers, colleagues, and codes of conduct thrown to the side of the road or under the wheels. Rationalizations, willful blindness and betrayal are the outcomes. Reputation is severely damaged. Trust and confidence lost.

The economic meltdown reinforced the obvious — that greed and the perception of greed erode public confidence. In June 2011, a Gallup poll on confidence in institutions revealed that only 10 percent of respondents had “a great deal” of confidence in banks, while only 8 percent had “a great deal” of confidence in big business.

It takes a long time and concerted efforts to earn confidence back, and for trust to be restored. Ethical behavior and transparency generate trust.

Figuratively, the Gekko character is the American Dream on crack cocaine. We don’t need medical researchers to tell us how it will end if the addiction isn’t broken.

The most valuable asset a company has is its corporate culture — from that its internal and external reputation emanate.

Culture is organic, and therein lies the hope!

As a living collection of values, purpose, and “the way we do things around here,” culture is impacted by those who lead at every level of the organization.

The question for every CEO is how to ensure that culture is the asset not left unattended.

Gael O’Brien      February 29, 2012

The Week in Ethics

Gael O’Brien is also a columnist for Business Ethics Magazine; her February 2012 column includes an interview with Gallup Chairman Jim Clifton on how managers impact culture.

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The Week in Ethics: Toyota and the Ethics of Greed

U.S. Sen. Jay Rockefeller, D-WV, said this week that he had once worked hard to have Toyota locate an engine plant in his state because he knew it was a company built on the philosophy of quality first. “If they designed and built the safest and most reliable cars possible, then sales and profits would follow,” the senator said. “Now it is clear that somewhere along the way public safety took a back seat and corporate profits drove the company’s decisions.” Rockefeller made this comment in opening remarks as chairman of the Commerce, Science and Transportation Committee, which marked the third separate congressional hearing Toyota has faced to date.

In previous columns, I’ve talked about ways Toyota could begin rebuilding trust, dealing with challenges in reputation and image, and restoring what was lost in a process-only focus. Sen. Rockefeller’s comments, and Toyota’s own admission of losing sight of its mission, propel the Japanese auto giant into a growing category of corporate losers – those who shift focus to go after more growth and more profits, at the cost of what gave them a great reputation in the first place. Toyota, once the world’s most profitable automaker, suffered its first losses in its past two fiscal years; the turning away from a quality to a profit focus only created far more problems.

The idea that “Greed isn’t as good as we thought” is one of 10 ideas that will reshape the business world in the next decade, according to a recent Financial Times article. The author points to Bill Allen, legendary leader at Boeing, who inspired the organization to eat, breathe and sleep aeronautics and led them to market dominance and profits. Successor Phil Conduit’s focus on using measurements like unit cost, return on investment and shareholder return didn’t pay off: Boeing had scandals and lost its market leadership. Other companies mentioned — Citigroup, ICI, Enron and Lehman Bros – offer additional examples to future leaders of the quicksand of a profit-at-any-cost approach.

Toyota had a failure of ethical leadership. Delivering to the values of high quality standards and safety is ethics in action.

Ethics is at the heart of creating customer loyalty, creating an engaged workforce, and providing the reality behind the differentiating qualities that marketers use to describe a brand. Failing to build the highest quality product is, in fact, unethical. For Toyota and every other company, ethics and success in business are inextricably entwined. This lesson is proving very painful and costly to have to re-learn.

Gael O’Brien, March 4, 2010

The Week in Ethics