It takes twenty years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
—Warren Buffett
Would you rather be the CEO of GE or CEO of Enron? The leaders of both companies were, for a time at the turn of the last century, gods of success, achievement, ambition, and wealth. But Ken Lay was no Jack Welch or Jeff Immelt. Ken Lay, Jeff Skilling, Andy Fastow, and other senior executives of what was at the time the seventh largest corporation in America quite simply lost their moral moorings.
The Enron boys are a perfect example of what Boston’s Pete Nicholas warned of in Commandment #4, what he called “ambition without a conscience.” Their fate shows that fortunes without a moral foundation are nothing more than mirages destined to disappear faster than they were created. Enron committed the fourth of Gandhi’s seven sins: Commerce without Morality. For a time, Enron created colossal wealth, but look at the catastrophic costs: suicide, death, humiliation, or, for the lucky ones, jail time. Jackson, Mississippi’s onetime richest man in town, Bernie Ebbers of WorldCom notoriety, was perhaps the most charismatic cooker of the books in business history until Bernie Madoff made off with $50 billion of other people’s hard-won money. Ebbers perpetrated a $180 billion fraud. The result: nine conspiracy and fraud convictions and twenty-five years in jail. He will be in his late eighties when he is scheduled to be released. He became a moral agnostic. This is not how you want to live the last third of your life. Ebbers and Madoff are two examples where failure was not a friend. Moral failure is never friendly.
Moral failures are instructive—lessons can be learned—but their consequences are dear. Tyco’s Dennis Kozlowski lost his moral moorings. He gobbled up businesses with gusto and built Tyco from a $40 million company to a $40 billion enterprise, a remarkable achievement… or so it seemed at the time. Sadly for him, and for Tyco stockholders, he dipped into the company till to the tune of $170 million for his personal self-aggrandizement, according to charges brought against him in Manhattan’s State Supreme Court. Kozlowski will go down in history as the CEO who lived like a pasha—the man who couldn’t live without that six-thousand-dollar shower curtain—the man who believed in prosperity at any price. After his trial and conviction, from his jail cell in upstate New York, he told Morley Safer of 60 Minutes, “I was a guy sitting in a courtroom who made $100 million a year. And I think a juror sitting there just would have to say, ‘All that money, he musta done somethin’ wrong.’ ” The judge, the jury, the press, and the stockholders all believe he did. One juror said, “He got his just reward.” These are not the results that America’s RMITs are seeking, certainly not their kind of just rewards. Ethics are not optional.
David Green, owner of Oklahoma City’s Hobby Lobby, built his $2 billion, four-hundred-plus-store, privately held company on a $600 loan based on one ethical principle: the Golden Rule. “My ruling business philosophy has always been, Do unto others as you would have them do unto you.” It’s a shame Ken Lay, Bernie Ebbers, Dennis Kozlowski, and Bernie Madoff didn’t adhere to the Golden Rule. Green, the son of an Assemblies of God minister, says he started his own company so that he could create an environment that was morally superior to what he had experienced at TG&Y, a retail chain that is no longer in business. A good example of those values is that David Green does not open any of his Hobby Lobby stores on Sunday; they are open only sixty-six hours a week so that his employees can have a life outside of work. He cites Wal-Mart’s ninety-hour weeks as a comparison. Even though Green forgoes over $100 million a year in sales because of this decision, Hobby Lobby is still so profitable that Green gives away 50 percent of his company’s profits each year to philanthropies that he believes in. The other 50 percent is plowed back into the business for expansion. This year, Hobby Lobby will open twenty to thirty new stores with that profit.
George Johnson of Spartanburg doesn’t talk about God, but he does believe in the Golden Rule, and he believes strongly that “the three most important words in the English language are tell the truth.” Salt Lake City’s Jon Huntsman says aptly, “There are no moral shortcuts in the game of business or life. There are basically three kinds of people: the unsuccessful, the temporarily successful, and those who become and remain successful. The difference is character.” No one ever said it is easy to become an RMIT, to reach the zenith of success and wealth. Difficulty is not daunting to these great successes. Huntsman has a plaque proudly displayed in his office with a quote he loves from former CBS newscaster Edward R. Murrow: DIFFICULTY IS THE ONE EXCUSE THAT HISTORY NEVER ACCEPTS. Having grown up dirt poor, Huntsman knows difficulty intimately. He worried where his next meal would come from during his youth, his company was on the brink of bankruptcy twice, and he has survived cancer three times. But he never used any of those difficulties to cut corners.
Karthik Bala, one half of the brother team behind Vicarious Visions in Albany, New York, is sincere when he says, “My and Guha’s idea of success is helping our colleagues fulfill their own aspirations.” Putting others’ needs first often ensures that you become the first-place winner. David Rubenstein agrees: “You should never be afraid of letting other people take credit.” An insider in Washington, DC, where success has many founders and failure has none, he quotes Ronald Reagan: “There is no limit to what a man can accomplish if he is willing to let someone else take the credit for it.” Red McCombs of San Antonio says, “One of the most important keys to real success—the kind you can feel good about in the quiet of the night—is to know deep in your heart that you have done right by folks.” Doing right by folks is one of the surest ways to build what is, arguably, the most precious asset we all have the ability to possess, our reputations.
When asked how he personally defines success, William D. Sanders of El Paso, Texas, says without hesitation: “Reputation.” In his successful real estate career, he has been keen to change the negative image that many in that profession have created. Today, as always, he values his reputation as his most definitive success and greatest asset. Harris Rosen of Orlando says, “In my business of hotel and real estate development, I’m not selling bricks and mortar, I’m selling my reputation.” Fully 96 percent of RMITs cite reputation as their most important and bankable asset. Sacramento’s Buzz Oates says, “People have got to like you, love you, and respect you. Your reputation is your most valuable asset.”
Reputation has many constituencies, many masters—employees, investors, customers, bankers, suppliers, and even competitors. Bill Doré, the main man from Lake Charles, Louisiana, says, “The reputation you earn from managing your relationships, both in business and in your personal life, is the single most important key to success.” Doré started pushing a lawn mower for money at age seven and worked alongside his father in the New Orleans shipyards as a tacker during his teenage years. But no matter how you earn your money, he says, “The most important work you will ever do is work to create a spotless reputation.” His sterling reputation with his competitors—which at the time included larger, more well-known companies like Brown and Root, McDermott Drilling, and Santa Fe—helped him become the guppy who gobbled the whale, because he got the first call when his competitors were thinking about selling. He built Global Industries into a powerhouse in offshore construction for the oil and gas industries in the Gulf of Mexico and around the world on the basis of his reputation.
Your integrity is not just a competitive asset—it’s also a financial one. Charlotte’s Bruton Smith points out: “The bankers have the money, and they don’t lend you a billion or even a million unless your reputation is spotless.” He advises, “Keep your nose clean and your reputation as shiny as a new car.” Auto racing’s biggest personality is right—keep your reputation tuned up. Doing right by others always means doing better for yourself.
• The Golden Rule delivers gold to the wallet.
• Putting others’ needs first ensures that you finish first.
• Reputation is your greatest single asset.
• Integrity is integral to wealth creation.