It is curious that physical courage should be so common in the world and moral courage so rare.
Call it what you will—morality, ethics, religious values, the Golden Rule—but in business and in life, doing the right thing trumps all. There is a greater good, something far beyond price-earnings ratios, return on investment, and profit-and-loss statements. In our daily striving to be successful, to make money and grow, we sometimes forget that it is the human balance sheet that is most important. Even if you don’t believe in a God of justice and a final reckoning, in your heart of hearts you know that what matters is how you treat the least of those among us.
And just to be realistic, doing that right thing—a fearless and crazy right thing—almost always results in a better business and a better life. What goes around does come around. Do right; you’ll feel right. And you just might do well.
A Cleveland newspaper best summarized the effect of the amazing announcement: “It shot like a blinding rocket through the dark clouds of the present industrial depression.”39
The rocketeer: Henry Ford.
The date: January 5, 1914.
The rocket: In one week from that day, Ford Motor Company workers would from then on be paid an astonishing $5.00 per day, minimum. Henry Ford had just raised his minimum wage from $2.34 a day to the unheard of $5.00. (That’s more than $110.00 in current dollar terms.) In addition, the workday would be eight hours and the workweek six days (later reduced to five).
Was the old man out of his mind? Crazy? Why pay all that when you don’t have to? Why spoil your workforce? Why eat into your profit margin? Was he trying to be popular? Trying to please the cynics on the outside looking in at his booming automobile business? Hardly. Yes, it was a crazy move. Crazy like a fox—and good for Henry Ford, Ford Motor Company, and, most of all, its thousands of workers.
By late 1913, Henry Ford had problems. His introduction of the automated assembly line that year had enabled him to turn out a Model T every 24 seconds, but the overall productivity per worker wasn’t much better than it was in the first year the cars were made. The men hated the repetitive assembly-line work. Absenteeism had reached 10 percent a day, and turnover had climbed to 370 percent. Because of the turnover rate, many Ford departments would hire 300 workers to fill 100 positions just to be sure that every slot would always be filled and the Model T’s would roll off the line nonstop.
Ford had invented the ultimate in organizational efficiency. Everything was designed beautifully and working well—everything except his human employees.
So Ford came up with his plan to increase wages and convinced his directors. The company’s announcement that January reflected the importance of the decision: “The Ford Motor Company, the greatest and most successful automobile manufacturing company in the world, will, on January 12, inaugurate the greatest revolution in the matter of rewards for its workers ever known in the industrial world.”40
Later, Ford met with reporters and explained his thinking: “We believe in making 20,000 men prosperous and contented rather than follow the plan of making a few slave drivers in our establishment millionaires.”41
But there was a little more to it than that. Henry Ford was a believer in “welfare capitalism”—a sort of industrial paternalism that said it was important ethically and economically for a corporate employer to provide for its employees’ basic human needs. If their lives were satisfying, they would be loyal, productive workers. As we might say today, it would be a win-win.
Ford liked to call his $5.00 per day “profit sharing.” And in fact, you didn’t just walk in off the street at Ford and start getting the $5.00 your first day. You had to be in the company’s employ for six months before the $5.00 kicked in. Also, you had to be at least 22 years of age and live in Detroit. Moreover—and not surprisingly for the times—the plan did not include or even mention women. Ford Motor Company’s female workers, who had been earning on average $2.04 per day, did not qualify at all. “I consider women only a temporary factor in industry,” Ford explained. “I pay our women well so they can dress attractively and get married.”42
The new wages and hours would keep the unionism movement at bay for the time being. Who needed a union when you were treated this well? Most important, the handsome pay scale also meant that Ford workers would be able to afford the very vehicles they were producing. The company and the economy would benefit, and both did almost immediately. From 1914 to 1916, Ford Motor Company profits jumped from $30 million to $60 million.
Ford’s auto industry competitors throughout Michigan were forced to raise their wages as well or see a drain of talent away from them and to Ford Motor Company.
Yet there was even more to Ford’s version of welfare capitalism. He took it all a bit too far. Besides the six-month requirement, Ford Motor Company insisted that its employees conduct their lives in a manner of which Ford’s Sociological Department approved. That meant no heavy drinking, no gambling, and no abandoning their wives and children. To be eligible to receive the company’s wages and hours largesse, an employee “must show himself to be sober, saving, steady, industrious and must satisfy the staff that his money would not be wasted in riotous living.”43
The Sociological Department staff utilized 50 investigators and scores of support personnel to look into possible transgressions, shortcomings, and incidents. Despite the paternalistic spying and heavy-handed oversight, the vast majority of Ford workers qualified and remained qualified for the wages and working conditions of Ford’s profit sharing. And they most certainly would have done so even without the Sociological Department keeping tabs on them.
Ford’s welfare capitalism was highly controversial and thoroughly castigated in the press. Private lives should be—and are—just that: private. Ford gradually backed off. By the time he wrote his 1922 memoir, he had abandoned the whole idea of a Sociological Department and its morality police. “Paternalism has no place in industry,” he wrote. “Welfare work that consists in prying into employees’ private concerns is out of date. Men need counsel and men need help, oftentimes special help; and all this ought to be rendered for decency’s sake. But the broad workable plan of investment and participation will do more to solidify industry and strengthen organization than will any social work on the outside.”44
In other words, when they’re at the plant, pay them well and listen to their ideas, and when they go home, let them be.
Henry Ford’s fearless and crazy $5.00 per day revolutionized industry, acknowledging the importance of worker morale and respect for worker talents and lives. Most of all, of course, it was just plain smart. Said Ford, “The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made.”45
Sometimes a fearless and crazy decision is simple—as simple as just walking away. Two hundred years ago, Isabella Baumfree had plenty to walk away from.
Isabella was one of ten or twelve children (the exact number is unknown) of James and Elizabeth Baumfree, both African slaves brought to the New World and sold to the Hardenbergh family of upstate New York. In 1806, nine-year-old Belle, as Isabella was known, was sold at auction along with a flock of sheep for $100 to John Neely of Kingston, New York. Neely was a cruel master and was soon beating and raping Belle almost daily.
Neely sold her in 1808 for $105 to Martinus Schryver, a tavern keeper.
Eighteen months later, Schryver sold her for $175 to John Dumont.
In 1815, while still the property of the Dumonts, Belle, now a young woman, fell in love with a slave named Robert from a neighboring farm. But Robert’s owner forbade the relationship because any offspring that might result would not be his possessions. So he savagely beat Robert. Belle, who was in fact pregnant with their child, never saw Robert again but later learned he had died of his injuries from the beating.
In 1817, her master, John Dumont, forced her to marry an older slave named Thomas. She had four children with Thomas, one of whom died shortly after birth.
The state of New York had legislated the abolition of slavery, to be effective in July 1827. Dumont had promised Belle her freedom a year before the official emancipation if she would continue to work for him faithfully and productively. But when the time came in 1826, Dumont changed his mind, claiming Belle’s recent hand injury made her less productive. She was furious and continued to work just as hard and efficiently to prove Dumont’s statement a lie.
Late that year, Belle escaped to freedom, taking her infant daughter with her. She left her other children behind because they would not be legally freed by the state’s emancipation order until they had served as bound servants into their twenties. Her escape was not dramatic—no daring scheme, no shotguns fired, no hounds in pursuit. She simply walked away with her baby on her back. As she said later, “I did not run off, for I thought that wicked, but I walked off, believing that to be all right.” 46
She found refuge in the home of Isaac and Maria Van Wagener, who bought her services for $20 from Dumont, covering the remaining months until the state’s law would finally set her legally free.
After she became a free person, she sought her son Peter, then five, who had been illegally sold by Dumont to an abusive slave owner in Alabama. She took the issue to court, prevailed, and got her son back. She was the first black woman ever to go to court against a white man and win.
During her stay with the Van Wageners, she had converted to Christianity, and in 1829, she and Peter moved to New York City, where she worked as a housekeeper, first for Elijah Pierson, a Christian evangelist, and later for Robert Matthews, also known as Prophet Matthias.
In 1839, her son Peter shipped out with a whaling ship from Nantucket. She received letters from Peter while he was at sea, but when the ship returned to port in 1842, Peter was not on board, and she never heard from him again.
She was in her mid-forties now and could have lived out her life as a hardworking housekeeper in New York City. But once again she made a life-altering decision, a fearless and crazy choice. And again, like merely walking away, it was simple on the surface: she changed her name. On June 1, 1843, Isabella Baumfree became Sojourner Truth, because, she told her friends, “The Spirit calls me, and I must go.”47
And go she did—right into the pages of history.
She became a Methodist and traveled the byways and back roads, advocating and preaching for the abolition of slavery. She met and worked with the foremost abolitionists of the time, including William Lloyd Garrison, Frederick Douglass, and David Ruggles.
In 1850, she published her memoir, Narrative of Sojourner Truth, a Northern Slave. She purchased a home, and she spoke at the first National Women’s Rights Convention.
The next year in Akron, Ohio, she delivered an impromptu speech on racial and gender inequities to the Ohio Women’s Convention. Her talk was so stirring and so well received that it later became known as her “Ain’t I a Woman?” speech.
She continued to travel and speak about slavery, abolition, and race. She was on a mission. She moved to Harmonia, Michigan, and bought a house and finally gathered some of her family to her side, including a daughter and two grandchildren.
During the Civil War, she helped recruit black troops for the Union cause. One of her grandsons joined. In October 1864, she met President Lincoln.
After the war, she continued her traveling and speaking, including trips back to New York and along the East Coast. She broadened the subject matter of her talks to include prison reform. She spoke vehemently against capital punishment. For several years she worked to get land grants from the federal government for former slaves but was unsuccessful. She even met with President Grant to present her argument.
Eventually she returned to Michigan, weary from so much travel and so many talks. She died November 26, 1883, at her Battle Creek home. Forty years after being called by the Spirit and taking up the cause, she was finally silent. And at peace.
History is replete with examples of men and women doing the right thing at the right time. Their selfless actions often change the course of human events and make the world a better place to live. You’ve just read about two of them—Henry Ford, who paid a top wage, and Sojourner Truth, who stood tall against slavery. Few of us in our mostly ordinary lives have the opportunity to make that crucial decision, to alter the flow of history. After all, we’re just getting by, day by day.
But there are opportunities in everyone’s daily life to make the right decision and do good things. These are small choices, ordinary opportunities that still can resonate and are still important—if not to everyone everywhere, at least to a few. Just ask Dave Steward, founder and chairman of World Wide Technology (WWT), a $3.3 billion private corporation providing technology products, services, and supply chain solutions to companies around the globe.
Steward’s journey has been impressive. Born in Chicago in 1951, he grew up in rural Clinton, Missouri. He attended all-black Lincoln School before transferring along with another African American classmate and integrating the previously all-white Franklin School. He earned his high school diploma from Clinton Senior High and a bachelor’s degree in business administration from Central Missouri University in 1974. He then went to work.
Everything changed forever for Steward and his family in 1990, when he founded World Wide Technology. Back then he had a staff of four, including friend and partner Jim Kavanaugh, and a mere 4,000 square feet of office space. Today WWT has more than 900 employees and over a million square feet of office and warehouse space. The company is a top supplier for tech giant Cisco and other industry leaders including Dell, IBM, HP, Oracle, and Microsoft. The company is also a leading federal government technology contractor. WWT is the most successful African American–owned business in America.
And a good part of that success is because Steward, WWT chairman, and Kavanaugh, WWT CEO, know little things mean a lot. They know that employees and customers alike will judge them not so much by the business awards they earn or the financial results they tout but by how well they do the small stuff. That’s where the rubber meets the road.
For example, in 1993, World Wide Technology was anything but worldwide. In fact, it was struggling to stay afloat, and several employees had jumped ship. During a meeting in the company conference room, Steward and everyone else in the room could see out into the parking lot as a tow truck pulled up to Steward’s vehicle and started to hook it up. The boss’s car was being repossessed. Steward was mortified. Instead of making up some tale or expressing false outrage, he calmly told the group that his briefcase was in his car and he needed to go retrieve it. He did so and returned to the meeting, and the tow truck hauled away the car. “Although I was humiliated,” said Steward in an interview for Heart and Soul, a book by Robert L. Shook that includes a chapter about WWT, “knowing that how I reacted would affect company morale, I didn’t dare show my emotions.”48
He remained calm, and he stuck to business—the meeting at hand. The next morning he drove up in his wife’s car and used it for work until things got better and he could get his own vehicle once more. Said a WWT employee who was at the meeting and witnessed the repo, “Dave handled it so nonchalantly, I just thought, ‘Well, sometimes you get knocked down, so you just get back on the bike and keep riding.’”49
Small stuff. Done right.
As another example—also from those early, uncertain days—WWT had landed a $4 million contract for PCs for the Army Corps of Engineers. The computers would have to be delivered from WWT’s base in St. Louis to Omaha, about 350 miles away. It was the company’s first big government contract, so the two bosses, Steward and Kavanaugh, decided they’d make the delivery themselves.
They rented a large truck to carry the PC cargo, drove to Omaha, and shared a cheap motel room for the night, where they took turns guarding the truck parked outside their room. The next day, dressed in jeans and sweatshirts, they drove up to the Army Corps of Engineers loading dock and proceeded to unload the computers. Warehouse workers watched, amazed. First of all, drivers rarely if ever unload their own cargo. But then these two guys got back into the cab of their truck and changed into business suits and ties. They drove off to a meeting with Army brass, dropping off their rental truck on the way and renting a car.
At the meeting, one of the officers asked, “Are you the two guys who unloaded the PCs and changed into business suits?”
“Yes, that was us,” said Jim. The officer explained that the warehouse workers had called and told the officers what they’d seen. Jim responded, “We wanted to make sure the PCs were there and everything worked out.”
Said Dave Steward later, “From that day on, the Army Corps of Engineers has been one of our best advocates, and they still tell that story about the two guys who drove the truck and changed clothes afterward. That’s what we did. Whatever it took, we’d do it.”50
Small stuff. Done right.
In yet another example, on the evening of September 11, 2001, the U.S. Navy needed 400 laptops and servers shipped immediately from WWT to the still-smoldering Pentagon. It was a national security emergency—but all air travel was suspended. The computers and equipment would have to be assembled, packaged, loaded onto trucks, and sent east. Virtually every WWT employee—from administrative assistants to sales reps to maintenance staff to top corporate execs—answered the call and showed up that evening to get the job done. They pulled an all-nighter and got the computers out the door the next morning. Later, the U.S. Navy awarded World Wide Technology its coveted Small Business Award.51
Small stuff. Done right.
That do-the-right-thing-no-matter-how-fearless-or-crazy attitude flows right from the top, from founder and chairman Dave Steward. He’s a devout Christian and bases much of what he does on Jesus and the Bible. Yet he is respectful of the beliefs or lack of belief of anyone in his employ or any one of his clients. “You can apply the Golden Rule to every business as well as all walks of life,” he says. “You can also use what Jesus teaches us in Mark 12:31: ‘You shall love your neighbor as yourself.’ Both of these verses are simple, easy to remember, and can serve as guiding principles on how to conduct business every day for as long as you are in business.”52
Amen.
MY TAKEThe most compelling reason to do the right thing in your personal life is just that: it’s right. You know it, others know it, and—if you’re a believer—God knows it. When you do the right thing, you walk with the angels. You feel fulfilled, you feel confident, and you are grateful for the opportunity to have that choice. And the world is grateful that you made it—if not immediately, then later, when the stories are told and the history is written.
When you do the right thing in your business life, you get all that and more. You also have an opportunity to use that decision to solidify your company’s stellar reputation and—dare we say it—increase its bottom line. Yes, I realize that sounds crass, manipulative, and conniving. But it’s true: do good, and you’ll do well. Clients, consumers, partners, and investors all want to deal with and be associated with a company that does right and is consistently ethical—a company that has a corporate conscience, shares its success, and knows that the business doesn’t exist in some kind of financial vacuum. It’s in the world; it’s of the world. And as such, it has responsibilities.
When a company and its CEO (that’s you) possess and demonstrate a corporate conscience, they become true symbols of life-wealth—they practice what they preach, and they not only seem all the richer for it, they are all the richer for it.
Let’s get cerebral for a moment. The following are five basic rules to live by for businesses:
1. Harm principle: businesses should avoid causing unwarranted harm.
2. Fairness principle: businesses should be fair in all of their practices.
3. Human rights principle: businesses should respect human rights.
4. Autonomy principle: businesses should not infringe on the rationally reflective choices of people (i.e., it’s their decision; let them make it).
5. Veracity principle: businesses should not be deceptive in their practices.
These principles apply not only to a business’s relationships and dealings with its customers and clients but also with its employees. In fact, those employee relationships are the most important of all. Without ethics there, the entire business is built on sand and will not last.
Johnson & Johnson, the famous pharmaceutical and health products corporation, publishes a succinct, on-the-money credo expressing its internal moral principles:
We are responsible to our employees, the men and women who work with us throughout the world. Everyone must be considered as an individual. We must respect their dignity and recognize their merit. They must have a sense of security in their jobs. Compensation must be fair and adequate, and working conditions clean, orderly and safe. We must be mindful of ways to help our employees fulfill their family responsibilities.53
But remember, employees, too, have an ethical responsibility to the clients and customers and—even though they might not always think so—to the company that employs them. They need to be honest and forthright in everything they do as representatives of their company.
Famed investor Warren Buffett explains the strict ethical codes within his companies: “I want employees to ask themselves whether they are willing to have any contemplated act appear on the front page of their local paper the next day, to be read by their spouses, friends, and children. … If they follow this test, they need not fear my other message to them: lose money for the firm, and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless.”54
Well said.
Yet even Buffett faced an ethics challenge in spring 2011, when it was revealed that David Sokol, a Buffett lieutenant and possible Berkshire Hathaway successor to the man himself, had purchased thousands of shares in a chemical company he then recommended Berkshire buy. Sokol benefited financially but resigned his position with Berkshire when the details became public. Was it insider trading? The SEC is looking into the whole matter, and Buffett has chastised his former golden boy.55
So let’s get cerebral again. The concept of ethics seems simple, but it’s not. Just ask Buffett and Sokol.
Some people immediately think it has to do with what their feelings tell them is right or wrong. Seems logical. But relying on feelings to determine right or wrong is misguided because feelings—subjective and often overly emotional or irrational—can actually lead us to resist the right or embrace the wrong. Feelings can be unethical. Think of all the harm and damage that could be done if someone relied on feelings alone to determine what was right. For example, an employee may feel that she’s justified in stealing office supplies because her boss didn’t grant her the raise she requested. But that doesn’t make the theft right.
So maybe ethics has to do with religious beliefs. In many ways, yes. Virtually all major religions are based on ethics and propose ethical rules—the Ten Commandments, treating your neighbor as yourself, and the like. The Bible, the Talmud, and the Koran are all bursting with passages about right and wrong. But religion does not encompass ethics. Ethics is more than religion. The atheist, too, should behave in an ethical manner. And of course, think of the harm and damage that has been done in the name of religion.
So is ethics something legal, something required by law? Laws can and should be just and fair and promote ethical behavior. But they don’t always, of course. The Jim Crow laws in the South didn’t. Statutes legalizing slavery didn’t. The Nazis legally outlawed Jews. Does Sharia (Islamic law) always match a Christian’s notion of ethics?
Maybe ethics simply means doing what society accepts. Oftentimes, sure. But again, that definition is too narrow, too limiting. Think of what some societies in the world accept—subjugation of women, religious intolerance, child labor. Accepted, yes. Ethical, no. Besides, societies, especially those that are the most free, are a tumultuous, dynamic mix of accepted and unaccepted. Much is not black-and-white; some is not ethical.
What, then, is ethics? Let’s ask the Markkula Center for Applied Ethics at Santa Clara University in California, an organization that exists to help people and corporations figure out how best to live ethically and help create and maintain an ethical world. As the center explains it:
Ethics is two things. First, ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues. Ethics, for example, refers to those standards that impose the reasonable obligations to refrain from rape, stealing, murder, assault, slander, and fraud. Ethical standards also include those that enjoin virtues of honesty, compassion, and loyalty. And, ethical standards include standards relating to rights, such as the right to life, the right to freedom from injury, and the right to privacy. …
Secondly, ethics refers to the study and development of one’s ethical standards. … [F]eelings, laws, and social norms can deviate from what is ethical. So it is necessary to constantly examine one’s standards to ensure that they are reasonable and well-founded. Ethics also means, then, the continuous effort of studying our own moral beliefs and our moral conduct, and striving to ensure that we, and the institutions we help to shape, live up to standards that are reasonable and solidly-based.56
Well, that’s a little formal, of course, but we can all nod and smile as we read it. It’s all true, we say to ourselves. But that doesn’t mean it’s easy. What about an ethical dilemma—a situation in which guiding moral principles cannot determine which course of action is right or wrong? Civil disobedience? White lies? A Sophie’s choice? Whistle-blowers? It’s enough to give you a headache.
Yet it always comes back to something inside—that part of you that knows what’s right, knows what’s moral, knows what’s true. Then comes the toughest part: putting your ethics, your morals, into practice. Henry Ford did it. Sojourner Truth did it. Dave Steward did it.
They did the fearless, crazy thing. They did the right thing.
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39 Cleveland Plain Dealer, January 11, 1914.
40 “The Revolution of 1914,” Dearborn News Online, January 5, 2009, http://www.dearbornnewsonline.com/2009/01/revolution-of-1914.html.
41 Samuel Crowther, “Henry Ford: Why I Favor Five Days’ Work with Six Days’ Pay,” World’s Work, October 1926, http://www.worklessparty.org/timework/ford.htm.
42 Ray Batchelor, Henry Ford, Mass Production, Modernism, and Design (Manchester, UK: Manchester University Press, 1994), 50.
43 Boris Sanchez de Lozada, “Henry Ford and the Five Dollar Day,” Bryant.edu, http://web.bryant.edu/~ehu/h364proj/summ_99/armoush/page3.html.
44 Henry Ford, My Life and Work (Stilwell, KS: Digireads.com, 2006), 66.
45 Ibid., 74.
46 “Sojourner Truth (Isabella Baumfree),” Women in History, http://www.lkwdpl.org/wihohio/trut-soj.htm.
47 Ibid.
48 Robert L. Shook, Heart and Soul: Five American Companies That Are Making the World a Better Place (Dallas, TX: BenBella Books, 2010), 245.
49 Ibid.
50 Ibid., 249.
51 Ibid., 254.
52 Ibid., 281.
53 “Working Here,” Johnson & Johnson, Inc., June 27, 2011, http://www.jnj-canada.com/working-here.aspx.
54 Dominic Rushe, “Warren Buffett Admits ‘I Made a Big Mistake’ over David Sokol’s Purchase of Lubrizol Shares,” Guardian, April 30, 2011, http://www.guardian.co.uk/business/2011/apr/30/warren-buffett-big-mistake-david-sokol-lubrizol.
55 Ibid.
56 Manuel Velasquez, Claire Andre, Thomas Shanks, S. J., and Michael J. Meyer, “What Is Ethics?” Markkula Center for Applied Ethics, 2010, http://www.scu.edu/ethics/practicing/decision/whatisethics.html.