The Ten Commandments for Business Failure - Don Keough [24]
With virtually every public company talking to Wall Street all the time, there was constant demand for short-term results. Demand was so strong that pressure to achieve short-term results became almost inescapable.
A few corporate leaders found themselves no longer asking “Is it right?” but “Is it legal?” And then from that point, it was just a short leap to “Can we get away with it?”
The end of the story for these companies was tragic. People were fudging figures and cooking books to hide debt, to hype earnings, to avoid taxes—or to do all three.
For those involved the end result was disgrace and for some it was prison. For some CEOs and CFOs there was a sense of executive immunity from the moral obligations and laws that bind society. Even after Adelphia went public, John Rigas and his sons operated the company apparently as if it were the family treasure chest. High-flying companies such as Enron and Tyco were in trouble, yet they had CEOs and CFOs who acted without regard for the owners or the employees.
While the vast majority of corporations played by the rules and did not follow Commandment Five, there were quite a few others who played it so close to the line that they got chalk on their pants and occasionally stepped over the line. There were enough of these delinquent firms to span the alphabet from Adelphia to World Com. And, unfortunately, their actions generated so much bad press that they somewhat tarnished the reputation of all business. The seemingly endless photos of crooked businessmen throwing lavish parties and cavorting with the high, the mighty, and the glamorous hurt all of us.
Another part of the problem is the obsession with celebrity. It’s one of the unhealthiest aspects of modern life. The camera is always on and in the world of twenty-four-hour communication, professional talkers are always looking for someone new to talk about. Some leading executives have been happy to oblige. To get their faces on the cover of a magazine they have gone to great lengths, spending fortunes on lavish entertaining and erecting gaudy homes.
When you become someone even mildly important, be careful—the writers may praise you to the heavens and endow you with more charm and more intellect than you could possibly deserve or they will find you more flawed than Scrooge. Soon after I was elected president of The Coca-Cola Company, I was the subject of some profiles in business publications. I hardly recognized myself. I was either a white knight to help lead the company or I was the living embodiment of the famous Peter Principle, promoted beyond my level of competence.
Coming from the Midwest, where even the most prosperous farmers take great pains to hide their status, it makes it somewhat easier to keep your hat size from expanding too greatly.
Everyone likes recognition, but one has to be careful not to be seduced by our cult of celebrity and tempted to cross over the line of ethical behavior.
“Managers are concerned with doing things right. Leaders are concerned with doing the right things.”
—Anonymous
AFTER EVERY BURST of business scandal in this country, it seems that we create additional regulations.
The first attempt to control trading for bonds and shares followed the panic of 1792, which was triggered by unethical speculation on the part of William Duer, secretary to the board of the treasury. Alexander Hamilton, our first treasury secretary, was scrupulously honest. But his associate Duer has gone down in history with the dubious distinction of being the first American guilty of insider trading. His nefarious manipulations caused auctioneers and traders to move themselves from the coffeehouses and curbsides to a permanent central location (destined to become the New York Stock Exchange) where dealings could be better controlled and better records kept.
The scandals of Ulysses S. Grant’s administration