It is a cliché that money has no conscience.
As economist Milton Friedman asked, and then himself answered, “So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not.”
There are plenty clichés to match this sentiment, such as “It’s not personal, it’s only business,” or ”The business of business is business”. Considering such clichés, it is all too easy to believe that simply doing business to maximise commercial gain to the practitioner without any other regard is simply fine.
Mahatma Gandhi had a different view, when he identified commerce without morality as one of the seven deadly sins against humanity.
Gandhi’s admonition is not against commerce itself. Being the practical soul, he was, he realised that commerce is an essential element of the human condition and the pursuit of a life of fulfilment. What he abjured was its amoral practice without what he perceived to be the vital leavening of a moral compass.
Why does this matter?
Business strategy requires enterprises to have a purpose, and a clear sense of what they want to be. This purpose need not be a state of humanitarianism or philanthropy. It can be as simple as wanting to be the best in its sector (as measured by customer satisfaction, for example). Most importantly, a sense of purpose should not be defined in terms of maximisation of financial returns. Enterprises that define their purpose in this narrow way are not destined for sustained success. This is because a solely commercial purpose does not inspire staff or leadership to excel and build greatness over any length of time. Businesses that operate for a greater purpose that resonates with humanity, are more likely to connect with employees and stakeholders in a more enduring way. These businesses are more likely to flourish.
If one accepts that Milton Friedman’s attitude represents a common view of the value of greed, it is not so strange that many industries, for example, financial services, are compelled by society to exist under strict regulation that mandates ethical conduct, such as the fair treatment of customers. We feel we cannot trust financial services to behave ethically as a matter of course, and for good reason. An extraordinary thought.
And yet, Gandhi requires of us a higher standard than mere conformance to laudable strategic purpose.
Morality, and its practical handmaidens, ethics and integrity, provide crucial direction to navigate dark places where there is no guiding light. In short, a sound moral compass, shows us what to do when we don’t know what to do. It enables clarity of thinking when confronted by a crucial crossroads in life with no theoretical learning or previous experience on which to base decisions.
Consider, for example, the awful dilemma of commercial businesses right now in the grip of the pandemic. Who do they pay first, creditors, staff or dividends? Are there corners to be cut, staff laid off, customers short-changed, or profiteering opportunities that will not be discovered? There is no handbook for a situation like this, and no precedent. Yet strong morality will provide clarity and a way forward that will stand any enterprise in good stead.
When US pharma giant Johnson & Johnson faced the terrible dilemma of the poisoning of batches of Tylenol in stores their morality guided their response. In the famous case study, they acted immediately and without regard to cost to remove all product from all shelves immediately. Although the poisoning was eventually found to be limited in extent, their swift action ensured that as few people as possible ran the risk of poisoning. While, in hindsight, this sweeping nation-wide action may have been an overreaction, they took the morally correct decision to place the lives of customers far above any commercial consideration. In the short term, there was no negative effect on the good name of either the product or the company. In the long run, their response to the crises has enhanced their reputation and brand.
And yet, it seems that Gandhi would hold us to an even more demanding standard.
These examples seem to suggest that taking the correct moral position is ultimately beneficial to the decision maker. However, there are instances where this may not be the case. The moral argument against pollution, dumping and waste is a poignant example. Can a utility such as Eskom justify increased pollution in the face of the COVID-19 economic crisis and all it brings? And what about a commercial culture that incentivises and rewards covetous behaviours? Can one blame executives, duly encouraged by legal advice and corporate custom, to do whatever it takes to seize any financial rewards on offer? Even when they know they are morally wrong, and would never permit their own children to behave in that same way?
Gandhi’s teaching advises one to do what is morally right, simply because it is right. This decision should be made regardless of personal consequence. Sound morality enables one to judge right from wrong and to make this choice without fear. This is a very high standard to aim for, but not necessarily when the decision is obvious and the consequences bearable.
No, it is when the path is narrow and stony, the decisions seemingly ambiguous, and the consequences agonising, that this clarity of thinking about morality is at its most powerful, and helpful.
Frank Thompson is an Associate of Lead with Humanity. He has a track record of strategic leadership in listed companies of over 40 years which has taught him to strive for sustainable people-driven solutions. A passionate South African, Frank is keen to share his expertise and insight in strategy and leadership.