I once heard John Maxwell say that there is no such thing as ‘business ethics’ – there’s just ‘ethics’!

I think he’s right. We can’t compartmentalize our lives and separate our private lives from that of business, even though many try. Ultimately, the way you conduct yourself in everyday life, including all your business dealings, will be seen as who you are.

King Solomon, who is widely regarded as the wisest man who ever lived – (who, sadly though, succumbed to temptation and excess in his own life eventually) had this to say: "Whoever tries to live right and be loyal, finds life, success and honour." (Proverbs 21:21).  What Solomon is saying here is that, ultimately, doing things the right way will provide the long term success sought by so many. Conversely, he also has this to say: "Wealth gained by dishonesty will be diminished, but he who gathers by labour will increase." (Proverbs 13:11)

THE BEST THINGS IN LIFE TAKE TIME

The implication is clear – genuine wealth takes time to accumulate! Its like most things in life, isn’t it? It has to be worked at, and if one works hard enough and long enough (and hopefully smart enough!), the resultant outcome is always sweeter. Red wine drunk too soon can be really awful. The best whiskies and brandies have taken years to mature, and their quality is guaged by the number of years they have been casked, and by their price tag! Wisdom is generally associated with advanced years. Some of the best businesses in the world are also the oldest.

I guess the difference is to be found in the amount of time it takes – time to plan properly, time to set up systems properly, time to train and develop, time to establish and maintain intimate relationships with our customers and suppliers, time to invest in our employees. These are all the ingedients for a successful business, and one thing they don’t need is a short cut – especially an unethical one. It would be like adding an accelarator to that cask of fine brandy to speed up the maturation process. It will never work – a twenty-year-old brandy is a twenty-year-old brandy; it needs twenty years to be that way!   The problem is that today we live in a microwave society. We want instant gratification, don’t we? We don’t want to wait, and so we tend to hurry things along; we tend to take short cuts. And this is what gets us into trouble.

The main purpose, then, for these articles on business and ethics is to hopefully get people to start thinking more carefully about what they do before they do it, and as a result, to impress on the generations to come that doing things the right way, is the only way. If we can’t succeed in this, then inevitably we will slide down the slippery slope to anarchy; to a place where anything goes.

I can’t tell you the number of times someone has come to see me about starting up a new business, and they’ve already been out and bought the new double-cab, or the new Merc. No profits have been made yet, and the money’s already spent or committed! Not only has the business not made any profits yet, but the new owner is also asking me how he can ‘duck’ tax. He’s very surprised when I tell him that not only will I not help him to ‘duck’ income tax, but I hope he develops a serious tax problem! It takes a while for him to realise that a serious tax problem means serious profits – and that maybe taking home 72% (after corporate tax of 28%) of those profits, and having a clear conscience, is a lot better than living in the shadows of deceit.

THE COST OF COVER-UP TIME.

The story of Johnny and his ethically challenged family in part one of this article is relevant here. Once you take a detour from the ‘straight and narrow’, every new right or left turn become easier and easier to take. Each bend in the road of honest business becomes easier to justify until eventually it becomes a habit, and the habit, a lifestyle.

The problem with this kind of deceitful lifestyle is that valuable time is used up trying to cover your tracks – time that could be better spent generating an income the right way. That’s if you are able to see that there could be a problem ahead if you’re caught! Many people today are so blinded by the rush for success they can’t see that there are always consequences to our actions. Cover-up time, as I call it, is more expensive than any other, and ultimately the cost of it far out-weighs the profit gained by dishonest means.

"Well," you may say, "I don’t worry about that stuff – everyone is doing business this way today and if I don’t, I won’t last; besides, I employ the right people to make sure nothing can be found anyway."

Yeah – that may be true, but not only are you still at risk, but you’ve now implicated your employees too. They may not like doing it, but are too scared they may lose their jobs if they don’t comply. This is nothing short of abuse, and of the worst kind!

"Besides," you may also say, "isn’t it true that nice guys always finish last?"

Well, nice guys may appear to finish last, but usually they’re running in a different race!   There is no right way to do a wrong thing.

POOR ETHICS AND POOR MANAGEMENT GO TOGETHER

Inevitably, poor ethics leads to poor management, and if you go down this road, your business runs the risk of crashing and burning.

You can only manage what you can measure, so if you’ve taken to fiddling your books, you won’t really know what’s going on in your business. Understating sales and overstating your expenses may enable you to reduce your income tax liability, and even keep some of the VAT for yourself, illegal as it is, but this is a short term (remember the time issue!) benefit, with some serious long term consequences if you’re caught. (And SARS are becoming a lot better at doing this!)

There are also long term financial consequences which many never consider in advance, when they start down this road:

• One of the extensions of Parkinson’s Law is that "expenditure rises to meet income, and usually surpasses it". If you don’t know how much you’re taking out of your business for personal expenditure, it’s quite likely you’re taking too much – more than your business can afford. Inevitably, the business will start to lose money, and you won’t know how to fix it.
• Or, should you decide you want to sell your business to someone else at a later stage, the value of the business will be understated because of the lower sales and profits reflected in your books. How can you then expect a potential buyer to pay an inflated price for a business on the basis that the books have been cooked? I don’t know about you, but I would seriously doubt the word of someone who is quite happy to cook his books, and boast about it too!
• When your employees know that you’re not averse to dipping into the till from time to time, they’ll start doing it too – only they’ll be doing it to you! People do what people see!
• If you ever have to dismiss an employee on this basis, rest assured they’ll use your infidelities as a weapon against you. You could end up with a gang of thieves and blackmailers on your payroll, instead of loyal, productive employees!

Someone once said said: "What a tangled web we weave when first we practice to deceive!"

POOR ETHICS AND STRESS GO TOGETHER

If you’re a person with no conscience; or with a selective moral code, stress will probably not be an issue. I don’t believe that people who have been raised right, generally, do wrong things without thought of the consequences. Fear of getting caught does still affect some people, even though it appears to be less of an issue in these days.

Living the cover-up lifestyle can generate huge amounts of mental and emotional stress. In this modern day, it is a known fact that stress accounts for more sickness and death than anything else. The medical costs associated with the treatment of stress, and stress-related illnesses, account for more than 80% of all medical costs incurred. Living a stress-free life will ensure that you will likely be blessed with a long one.

But, if you’re one of those people who doesn’t stress about this kind of thing, let me assure you of this: get caught and end up in a cell with Bubba, the nine-foot behemoth, and you will understand a new meaning of the word, stress!

There is no pillow as soft as a clear conscience.

LEGACY

We may well go through this world ducking and diving our way to success, but like Johnny’s family, leave a legacy which negatively impacts on our children and the generations to come. I fear we’ve already gone too far down that road and that our children’s children are going to be living in a far more selfish world than we can ever begin to imagine right now.

We don’t seem to understand that the material benefits we are reaping today are largely due to the way in which our forefathers conducted themselves, privately and in their business lives. Many of the great businesses in the world today; some of which have been around for hundreds of years, were founded by men of great moral character. These men started dynasties built on the foundations of honour, trust, loyalty, truth, and a great work ethic. Consider this story about a name we all know well:

The Colgate-Palmolive Company is one of the oldest in America, going back nearly two hundred years. It was started by a young man named William Colgate. He left home at sixteen years of age to seek his fortune, and everything that he owned in this world was tied in a bundle that he carried in his hand. But as he walked along on his way to the city, he met an old neighbor, the captain of a canal boat, and the words the old man spoke to him on that day stayed with him his entire life.

"Well, William, where are you going?" asked the canal-boat captain.

"I don’t know. Father is too poor to keep me at home any longer, and says I must make a living for myself now." William went on to say that he had no skills, that he didn’t know how to do anything except make soap and candles.

"Well," said the old man, "let me pray with you and give you a little advice."

There in the pathway, the two of them-a teenager and an old man-knelt down and the man prayed earnestly for William. Then, rising up, the boat captain said this: "Someone will soon be the leading soap-maker in New York. It can be you as well as anyone. I hope it may. Be a good man; give your heart to Christ; give the Lord all that belongs to Him of every dollar you earn; make an honest soap; give a full pound; and I am certain you will yet be a prosperous and rich man."

The last few words by the canal-boat captain make my point for me.

I have been blessed to have parents and grandparents who lived righteous (though I’m sure not perfect!) lives. My grandfather was a municipal market master dealing in fruit and vegetables. He was often offered bribes, sometimes in the most subtle ways, to give preferential treatment to certain market agents and buyers. He always refused. He came to be known as a man of honour – that his word was his bond. I was told this by one of the agents who had tried his luck and failed.

King Solomon has the last word on this: "A good man leaves an inheritance to his children’s children, but the wealth of the sinner is stored up for the righteous." (Proverbs 13:22).  I would like to think that some of what I’ve said in these last two Insights, would have caused many of you to pause, and reconsider your way of doing business.  Every right decision taken from now on will make a huge difference, and who knows, we may be able to stem the tide!

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