|
||||||||||||||||||||||||||||||
Ethics in Business and LifeSometimes You Have to Hit Rock BottomPaul Harris had a way of seeing the good in everything. Rotary was not born in Chicago in the early part of the twentieth century because the city was awash in goodwill and concern for others. Quite the opposite was true. The concept of “business ethics” in Chicago at the time was considered an oxymoron. The principles of Rotary were a reaction to the unethical business climate of the era. Harris believed that nothing got cleaned up until people could no longer stand it. He noted that the pollution in Chicago was ignored until people were dying and unable to live with the stench. Only then did the people of Chicago come together to do something to correct it, although their solution (flushing the pollution down the river to other cites) was by modern standards far from ideal. “When affairs became so bad they could not be worse, they
accepted the only other alternative and got better. The outraged
citizenry arose, turned the turbid river right’ about and sent it and
its noisome contents meandering down the Illinois and Mississippi
Valley, aerating and Purging itself on its way to the sweet salt waters
of the Gulf of Mexico—“good riddance to bad rubbish.” Harris believed that ethical business people could survive and even prosper, because given a choice, people would want to do business with someone they trusted. Standing for ethical behavior in business and professions set Rotary apart from every other social club of the era, and it is still a foundational principle today. Reprinted by permission of the Rotary Global History from the Newsletter Nuggets Section of “What Paul Harris Wrote” (www.whatpaulharriswrote.org). Chicago was the Wild WestPaul Harris believed that Rotary started in Chicago because Chicago badly needed something like Rotary. From a business perspective, Chicago in the early twentieth century was the equivalent of a lawless frontier town. It seemed the only way to compete in business with people who would say or do anything was to do the same. Business people believed that to be successful, you had to be unethical, until someone like Harris provided a viable alternative. Treat people fairly and they will want to do business with you. “The words, ‘Can any good thing come out of Chicago?’ have
been hurled by skeptics at many of the virile forces which have
originated in that city, and Rotary has not been an exception. It is
conceivable that Rotary might have been born under sunnier skies, in a
climate more equable, and in a city of mental composure; but many will
contend that there could have been no more favorable birthplace for a
movement like Rotary than paradoxical Chicago, where the battle for
civic righteousness was being so fiercely waged.” Reprinted by permission of the Rotary Global History from the Newsletter Nuggets Section of “What Paul Harris Wrote” (www.whatpaulharriswrote.org). Reverse PsychologyToday we think of Chicago as a vibrant town and the birthplace of Rotary. However, in the early days of Rotary, Chicago had a well-deserved international reputation for corruption and unethical behavior. That made it difficult to promote an organization born in Chicago that supposedly stood for ethical conduct in one’s business and personal lives—that is, it was difficult until a clever Rotarian found the perfect sales pitch. “When the present First Vice President, Donato Gaminara of
Uruguay, South America was Governor of the sixty-third district of
Rotary International, he made his campaign for extension on that theory.
Due to the unfavorable publicity Chicago had been given, he found it
difficult to interest the best type of men in the movement. For some
time, he tried to overcome the handicap by stating that Chicago was not
so bad as represented; but, finding it impossible to convince them he
adroitly changed his tactics and when his prospective members condemned
Chicago as one of the worst cities in the world, he went them one better
by saying that it was the very worst; that, in fact, it was so bad that
it was absolutely necessary for the respectable element to resort to
heroic methods, and that was how Rotary happened to be born in Chicago.
Sales resistance having thus been broken down, he experienced
unprecedented success.” Reprinted by permission of the Rotary Global History from the Newsletter Nuggets Section of “What Paul Harris Wrote” (www.whatpaulharriswrote.org). Arthur Frederick SheldonAlthough Paul Harris founded Rotary, many other people put their mark on Rotary in those early years. Arthur Sheldon was one of them. A man with deep convictions, Sheldon was the person who articulated one of the early Rotary mottos: He profits most who serves best. Harris celebrated Sheldon’s commitment to ethical principles with the following brief vignette. Sheldon arrived in the time heretofore described as Chicago’s
zero hour. The chaotic condition in business affairs impressed him
deeply. Frequently, it seemed that virtue was without reward; that
one’s chances of business success depended upon his willingness to be
ruthlessly aggressive and even dishonest if need be. Sheldon valued
honor above material gain and revolted against the salesmanship methods
he was expected by his employers to use. One day his disgust was so
overwhelming that he cast his outfit into a convenient gutter and sent
his resignation to the house. Reprinted by permission of the Rotary Global History Fellowship from the Newsletter Nuggets Section of “What Paul Harris Wrote” (www.whatpaulharriswrote.org). Sheldon and Business EthicsPaul Harris devoted nearly an entire chapter of his second book to Arthur Sheldon, who helped to shape much of the early Rotary philosophy. Sheldon moved to Chicago after graduating from the University of Michigan, but found himself appalled by the business ethics that dominated Chicago, or rather lack of business ethics. He abruptly quit a good job because of the unethical things his employer expected of him. Sheldon argued that, not only can ethical business people survive in a community filled with unethical businesses, but they can prosper. Given a choice, people will always choose someone that they can trust. This principle, later formalized in the four-way test, quickly became a core element in Rotary philosophy. The doctrine of caveat emptor was, at the time, applied to the
consumer. Ill will and distrust characterized the attitude of business
toward competitors and the welfare of employees was given scant
consideration. Sheldon noted, however, that there were certain
conspicuous exceptions to the rule; that some of the most fair-minded
and liberal business houses were the most successful, and he set out to
study the principles which made for success. His studies led him to
reverse his previous impressions and eventually to the conclusion that
there was but one dependable route to permanent success, and that was
the route of service. Reprinted by permission of the Rotary Global History Fellowship from the Newsletter Nuggets Section of “What Paul Harris Wrote” (www.whatpaulharriswrote.org). Profit is Not EvilArthur Sheldon penned the phrase “He profits most who serves best” as a guiding principle ethical conduct for Rotarians. The more cynical business people in Chicago argued that this was nothing more than a marketing ploy. It is a good bet that many of those cynical individuals conducted their business by other principles, instead of focusing on providing the best service possible. Nevertheless, their criticism has merit if you believe that making profile is antithetical to providing quality service and fairness to customers. Paul Harris believed that Sheldon’s premise was the product of a person who believe in basic fairness above all else and that Sheldon would have been fair to his customers because it was the right thing to do. The fact that it was also a good business practice was a bonus. You could feel good about your fairness and make a profit because people wanted to do business with a fair individual like yourself. Paul Harris argued that there was no need to feel guilty about making a profit if you did so by providing a good product or service at a fair price. In fact, being ethical in business is such a wise business practice that, in time, those less inclined to ethical behavior will be forced to change their ways in order to compete with you. The epigram, “He profits most who serves best,” has been the object of much criticism as being too worldly, and also the cause of speculation as to what Sheldon had in mind, pecuniary or spiritual reward. The writer believes that Sheldon, so far as he himself was concerned, was interested primarily in what might be termed the spiritual reward, but his aim was to bring the maximum of good to the largest possible number. He recognized the fact that the largest number were interested in pecuniary profits and therefore the pecuniary profit-seeking group was the group he desired to reach. He did not try to destroy the profit motive but rather tried to do
that which, to his mind was more practical, that is, sublimate it and
regulate it so that it would be of benefit to society at large and also
to him who served. If the world’s thinking was to continue to be in
terms of profits, he would at least bend his efforts to making profits
legitimate. With what some might consider fanatical zeal he contended
that profit was as inevitable a consequence of service as heat was the
inevitable consequence of fire. The bigger the fire, the greater the
heat; the greater the service, the more the profit. Reprinted by permission of the Rotary Global History Fellowship from the Newsletter Nuggets Section of “What Paul Harris Wrote” (www.whatpaulharriswrote.org). Profit and Ethics are Not Mutually ExclusiveArthur Sheldon was an early Rotarian who articulated many of the guiding principles of Rotary, including his doctrine that “He profits most who serves best.” Paul Harris understood that this deceptively simple statement had both a practical and a spiritual component, but realized that many people could see but one component at a time. In his book, This Rotarian Age, Harris relates an anecdote that illustrates how Sheldon often confronted this misunderstanding in his efforts to spread Rotary philosophy beyond Rotary clubs. A well-intentioned minister, introducing Sheldon to his
congregation in Rochester, New York, once made the mistake of saying
that to follow Sheldon’s doctrine would of course not be to one’s
financial advantage but that he thought that one would be more
compensated by the satisfaction he would experience in realization of
the fact that he had done the right thing. This was not Sheldon’s
doctrine and it required most of the time allotted him for his speech to
beat down the bad effects of his unfortunate introduction. Reprinted by permission of the Rotary Global History Fellowship from the Newsletter Nuggets Section of “What Paul Harris Wrote” (www.whatpaulharriswrote.org). Inspiring Ethical CodesRotarians lived the ethical principles of Rotary in their vocations, but that was only the start of their influence on businesses and professionals. Individual Rotarians spearheaded dozens of efforts to formalize ethical codes for their businesses and professions and get those codes accepted as a universal set of standards. By the mid 1930s, dozens of businesses and professions that never had explicit ethical codes prior to Rotary were now adopting them and urging all their members to follow those codes in their daily work. In the meanwhile, those to whom Rotary’s great opportunity
seemed to be in vocational service, that is, in providing high standards
and ideals in the business and professional world, were not idle.
Through their influence, scores of national trade associations were
organized on vocational lines in the United States, and codes of ethics
were adopted. Even conceding it to be true that the adoption of codes of
ethics by national associations is no guarantee that the members of such
associations will live up to the standards established, it cannot be
denied that the fixing of such standards is a splendid impulse in the
right direction. Reprinted by permission of the Rotary Global History Fellowship from the Newsletter Nuggets Section of “What Paul Harris Wrote” (www.whatpaulharriswrote.org). Defining the Scope of RotaryRotary is a dynamic organization with dynamic members, and so one should not be surprised that there was considerable controversy among members about what roles Rotary was best suited to address. There was a natural conflict between vocational service and community service. Because Rotarians were selected to be exemplary members of their businesses and professions, it only seemed natural to many members that their focus should be on promoting ethical standards in business. However, the need in the communities that sponsored clubs also demanded attention. Like many organizations that struggled with what should be their focus, Rotary eventually decided that one size does not necessarily fit all. Rotary now has four avenues of service. Although clubs are encouraged to be active in all avenues, the reality is that each club decides for itself which avenue to emphasize. Some of the most influential leaders of Rotary were deeply impressed with the possibilities of this activity [encouraging ethical conduct in businesses and professions]; they contended that Rotary was an organization of business and professional men [and now women too], and should devote itself exclusively to business and professional problems; that the plan of confining the membership of clubs to one representative of each vocation had significance in vocational service, and no significance whatever in community service, which should draw on all citizens willing to help. Such Rotarians also convincingly contended that vocational
activities were preferable because they enabled Rotary to project its
influence to non-Rotarians through national and international trade
associations. If Rotarians would assume the role of business
evangelists, the standards of trade would soon be raised to high levels. Reprinted by permission of the Rotary Global History Fellowship from the Newsletter Nuggets Section of “What Paul Harris Wrote” (www.whatpaulharriswrote.org). The Case for a Vocational FocusThe only way to truly understand an organization is to understand how they organization developed. Paul Harris founded Rotary on a dream of fellowship, understanding, and promoting well-being, but those concepts were only vaguely defined. Hence, early Rotarians struggled with the purpose of Rotary, often debating this issue at length. A strong argument was made that Rotary was ideally suited to improving business and professional ethics because Rotarians were selected based on their professional success and ethical conduct. At one point in our history, Rotary did indeed spawn dozens of ethical codes that permeated almost every profession. However, the sheer fact that Rotary began with a vague vision of service and fellowship meant that individual members and individual clubs defined for themselves the goals that they would promote. These multiple goals are organized within our current four avenues of service: Vocational, Community, Club, and International. Theoretically, the advocates of centering all thought on
vocational service presented a formidable case. A worldwide
organization, dedicated solely to the purpose of raising standards of
trade, would not be merely of direct value; it would be of indirect
value, in that it would bring about a better understanding between
nations; but Rotary had not begun its career with any one single purpose
paramount to all others, and it was late in the day for a second
renaissance. Reprinted by permission of the Rotary Global History Fellowship from the Newsletter Nuggets Section of “What Paul Harris Wrote” (www.whatpaulharriswrote.org). |
||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||
