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ETHICS IN BUSINESS: DINOSAUR OR EMBRYO?
From the hallowed halls of insurance to financial services, retailing giants to manufacturing behemoths, business practices in many industries are facing  questions, investigations, and prosecution.  Have we become that dishonest in business?  Maybe.  Are we that far removed from the lessons of our childhood?  Perhaps.  Has self-centered greed eclipsed our ethical standards?  Could be.  Or are we innocent?  Unlikely.  The true rationale behind all of this questionable behavior is far more convoluted.  

Warren Bennis, a noted expert on leadership, once told me that if he had to do it all over again, he would change the way business schools operate.  Rather than a focused concentration on bottom-line profit and loss, he would first require candidates for business school to first have a degree in the humanities.  As he put it, “They need to read the classics of literature and begin to understand the human condition.” 

In subsequent discussions, we talked about the difference between “shareholders” and “stakeholders.  Too many executives tie performance to the demands of the shareholders – the stockholders and investors in the company.  They continually demand more and more growth and profit, regardless of any extenuating market or societal conditions.  It’s all about the money!  

The Stakeholders in a company are its clients, employees and community.  These are the true assets of any business. Serve them and they will serve you. In our escalating search for profits, we seem to have lost sight of their importance – even though every great spiritual leader has called service the key to life.

James Halperin based his science fiction book, The Truth Machine, on the potential impact of a “truth machine” on society.  Can you imagine politicians giving a speech with a machine flashing a red light every time they didn’t tell the truth?

The book’s episodes relating to business were extremely intriguing:  buyer and seller would meet with a truth machine positioned between them.  In representing the product or service, the seller had to tell the truth – as did the buyer in identifying their needs and desires. Price negotiations were concise and to the point.  The seller would indicate the lowest possible selling price that would provide a fair profit.  The buyer would then give the highest possible purchase price that would enable them to stay within budget.  The price was a compromise between the two, resulting in both a fair purchase and a fair selling price for both parties.  Complex negotiations took place in minutes, rather than days.  Productivity soared with the decrease in selling time and 

Enlightened people know that “secrets are deadly.” As one good friend puts it, “I’ve never known a lie that didn’t require a second and third lie.” Yet, all too often, lies and misrepresentations prevail.  Perhaps we need a truth machine today!

In regulatory investigations, it appears to be the secrets that are causing the pain.  As a result, there’s a clamor for transparency and legislators are moving to implement new rules and regulations on disclosure.  Pessimists see this as governmental interference that will disrupt the business of business.  I choose to take an optimistic view that this is a time of opportunity and change for the better.  I refuse to believe that honesty will cripple a business.

The real estate industry has traditonally focused on “location, location, location.”  I urge independent agents to adopt the mantra o “disclosure, disclosure, disclosure”.  You have nothing to hide.  Your clients already know that you earn commissions on the sale of insurance.  They acknowledge that sales organizations often have bonuses (them contingencies).  All they really want to know is that you’re truly working in their best interests.

Ironically, contingencies do just that because they’re based on loss ratios, as well as volume When the agency or brokers earns contingency income for building a profitable book of business, the company earns more money, the client benefits from lower premiums ,and the agency is rewarded for its efforts.  Everybody wins.  So why should we keep it a secret?

Your clients want to feel that you’re operating in their best interests and appreciate their value to your agency.  When they feel that way, they give you more of their business and refer others to you. This cycle leads to a fair profit for you – and the growth of a relationship among between all parties.

Secrets ruin relationships.  Even on a personal basis, they prohibit open and forthright communication between people.  Shame, guilt, and fear of revealing the secret, create such a strain that many relationships simply wither Business relationships are no different: unless they’re based on mutual respect and honesty, they won’t work. You can have open and forthright communication only under the umbrella of honesty 

Maybe it’s time to revise the Golden Rule from “Do unto others as you would have them do onto you” to “Do onto others as they would have you do unto them”.

If you put your stakeholders – customers, employees and community – first, they will ensure your success.  Take the challenges of today as an opportunity to build a foundation of ethical and honest business practices.  May your own conscience become the integral “truth machine” that structures your path into the future!

Jack Burke
Other articles by: Jack Burke
Categories: General Information, Customer Service
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