During its brief, infamous run, Enron proclaimed four core values: Communication, respect, integrity, and excellence.
As comical as this may sound today, many former Enron employees and shareholders truly believed in their company's values, as set forth by the subsequently indicted likes of Jeff Skilling and Kenneth Lay. In fact, the company proclaimed these values on banners hung throughout Enron offices as a constant reminder of what the company supposedly stood for.
Many companies continue to promote core values to employees and shareholders. But do they really mean them? And how, as shareholders and employees, can we tell the difference?
The man with the answers
On Monday evening, we attended a discussion of this topic with LRN CEO Dov Seidman at The National Press Club. The conversation, led by New York Times foreign affairs columnist Thomas Friedman, was based on Seidman's new book, HOW: Why HOW We Do Anything Means Everything ... in Business (and in Life).
LRN, a corporate consulting firm focusing on business ethics, has consulted some of the nation's biggest companies, including Dow Chemical
Sounds great, but why are all of these Fortune 500 companies falling over themselves to hear what Mr. Seidman has to say? Ethics are all well and good, but doesn't the bottom line matter most?
The notion that the two can peacefully coexist is something of a new frontier for Corporate America. In the past, efficiency has been king, and Wall Street's focus has always been the bottom line. As the 20th century dawned, it ushered in the "nose to the grindstone" era, as mighty industries rose through sometimes ruthless practices. In the 1980s and '90s, we were immersed in the "Just Do It" era, which focused on efficiency at any cost. (Think the Six Sigma craze, popularized by Jack Welch at GE
But today's world is different. Thanks to the Internet and other technologies, what we do, according to Mr. Seidman, is not as important as how we do it. As blogging sites abound, companies have a much harder time controlling the information they disseminate to the world. Need proof? Just ask Howard Schultz at Starbucks
In other words, with such a vast, responsive medium to exchange ideas and news, how a company behaves will eventually surface. When it does, it's imperative for that firm to come up smelling like roses.
The secret to successful conduct
In a word: transparency. The best way for a company to let us know that it's upholding the values it set forth -- the values in which we invested -- is to open its doors and let outsiders confirm it for themselves.
In January, Marriott
Now that's adherence to company values. Employees and shareholders alike should be pleased.
Foolish bottom line
As Dov Seidman frequently says, successful companies in this highly connected world will "outbehave," not just "outperform," the competition. Companies that can build customer loyalty through caring, ethical, and transparent behavior will have the upper hand going forward.
It's an encouraging trend to us as consumers, shareholders, and just plain old human beings. The world can always use more integrity. Now, if we can just get the cable repairman to actually show up between the hours of 9 and 5, we'll be all set.
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Todd Wenning owns shares of Starbucks and Procter & Gamble. Blake Fulton does not own shares in any of these companies. Starbucks and eBay are Motley Fool Stock Advisor picks. Dow is an Income Investor pick. 3M is an Inside Value choice. The Fool has a highly transparent disclosure policy.
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