Making a Fair Profit

Proverbs 11:1:  "Dishonest scales are an abomination to the Lord, but a just weight is His delight."

When you buy a pound of coffee, a pound of lunchmeat, a pound of bananas, or whatever, are you really getting a pound?  How about gasoline?  Do you get an exact gallon of gas just because the pump screen says you do?  Thankfully in America, the National Institute of Standards and Technology carefully defines units of measure that are the legal standards for commerce.  Retailers are required to use "honest scales" that are calibrated, checked and certified to be accurate.  Our laws are pretty strict when it comes to weights and measures.  This verse makes it clear that dishonest scales are also an abomination to the Lord.  The Book of Deuteronomy makes it even clearer that the Israelites were not to have differing weights in their bag, a heavy and a light, or differing measures, a large and a small, but they were to have a perfect and just weight and measure."  God puts a pretty high premium on integrity in business practices and looks at dishonest business practices very seriously.  Notice this verse does not pinpoint any particular group.  Dishonest scales are an abomination, whether you are Jewish, Christian or profess to be nothing.  He does not differentiate when it comes to dishonest scales.  God hates deceitfulness and deception of any kind when it comes to how we are transacting business.

You are probably already thinking, 'what does this verse have to do with the topic, making a fair profit?'  It has everything to do with it.  You see, if you alter the weights on a scale, and you give 15.5 ounces for a pound of a product that costs $1.00 a pound, you are increasing the profitability of that product by 3.2%.  If you weigh that same item 32 times and give 15.5 ounces each time for a pound, you will have saved an extra pound thereby increasing your profit. 

What is a fair profit?  Isn't that a subjective question?  What is fair to one person may not be fair to someone else.  I believe the verse is speaking directly to the subject of profits, emphasizing the importance of making a profit fairly.  The fundamental rule of capitalism is, "profit, but fairly," but making a profit "at any cost" is not fair.  When the sole intent of a business is to make money for the stockholders regardless of what it does to a people and its culture, the quality of the product itself, or even the effects on the environment, is that still making a fair profit?  Too often, we want to point at the obscene profits of Big Oil or Apple or Microsoft, but before you pick up stones, if you have a Retirement Fund or 401K, aren't we primarily only interested in growing that nest egg, and don't those investments grow as a direct result of the growth in that particular companies' profits?  Is ignorance bliss with regards to this?  We don't know if the profits made on our mutual funds were fairly made or were they profits made at any cost.  Thought provoking to say the least, but I don't think this blog will settle this emotionally volatile issue.  The differentiation between earning profits fairly and earning profits at any costs is starting to work its way into the curricula of business schools.  "Business schools are moving beyond business as usual. Across the country, MBA programs have responded to growing criticism that graduates are fixated foremost on shareholder profits. Amid the unending financial scandal and the worst downturn in decades, the curriculum has shifted toward sustainability, long-term profitability, and integration of specialties. The question is how deep the changes will go." (Bloomberg Business Week, 11/10/11, "Business Schools' New Mantra:  Ethics and Profits")

I think the broader topic in our text this week is whether one is honest or dishonest in business, period.  Don't you think that God's opinion would be the same?  Absolutely!  Let's consider some examples of dishonest scales in today's business world.

If you are in sales, (I'm sorry salesperson.  Why do we always have to start with you?) would deceptive sales techniques, overpromising on a product or a service and other forms of stretching the truth, not be the same as dishonest scales?  I bought a vehicle a little over a year ago.  I went ahead and purchased the "lifetime limited warranty" too.  While I was in the decision making portion of the transaction, all I was hearing from my salesperson and even the owner of the dealership was the virtues of this extended warranty.  I knew, and they even explained to me that maintaining the service on the vehicle was key.  Once I made the purchase, the doublespeak started.  Three different people at the dealership, the owner, my salesperson and the service manager, told me something differently, as to when the oil should be changed to maintain the warranty.  What's worse, the emails direct from the manufacturer and the owner's manual said something different too.  What happened here?  If you don't keep up the maintenance, the warranty is voided.  Getting 3, 4 and 5 different answers to the same question, do you think they were trying to confuse when the maintenance work should be performed?  Sounds like a dishonest scale to me. 

I believe a salesperson can be honest and maintain his integrity.  You don't have to compromise to be in sales and marketing.  I love being a marketer, and I want to be known as the ethical marketer.  Gaining the trust of your customer is huge.  Remaining honest regardless of the consequences will only solidify that trust.  Be deceptive once, and that trust can be lost in an instant. 

Here is another one.  Have you noticed the theme of car insurance commercials lately?  "Just fifteen minutes, can save you 15% or more..."  You've heard them.  Each one is promising to save more than the other competitor will save you.  Here is something you can try.  If you switch from Company A to Company B, you can save, let's say $300, but if you switch from B to Company C, they will save you $300 more than B, and if you switch to D, they will save you $300 more.  Get the point.  Do you think if you keep switching, that ultimately the price will get down to $0?  Of course not. 

Now I know not everyone is in sales, but everyone is a buyer of goods and services.  Negotiating price is okay, and has its place, but if you pay less than the honest value of an item, do you feel that you got away with something?  How about when you thought you paid for an item, and you find out that the clerk forgot to charge you for it?  How does that make you feel?  It's there loss, you say.  Isn't that an example of dishonest scales?

I have one more, and I'm done.  This one happened to me over 30 plus years ago, and it still bothers me when I think about it today.  I had a young family then, and I wasn't making a whole lot of money.  I remember going to the bank to cash my payroll check.  I pulled up to the drive up window.  When the bank teller gave me my cash, I took the envelope and left.  When I opened the envelope, I realized she had given me $20 more than she should have.  What did I do?  What should I have done?  I must confess.  I kept it, and thought no more about it, or at least I tried to convince myself of that.  Wasn't my action an example of a dishonest scale?  Since then, I've found out that when a teller is short or over on cash that there is a massive effort by several bank employees to find out if a transaction was missed or something was miscounted.  Even worse, if the particular teller I had that day had made other transaction errors, she could have been on probation already, and my gain of an extra $20 could have resulted in the loss of her job.  I never knew what happened to her.  If memory serves me correctly, I think I started using a different branch.  Do you think guilt might have driven me to another branch?

The Lord delights in just weights as the verse says.  He is looking for us to be honest in all of our business dealings, so that making a fair profit is honorable.

Practicing Verbal Restraint

Have you ever been in a conversation when you know you've said too much?  How did you reach that conclusion?  Rarely will someone just tell you to zip your lip, be quiet or shut up.  Maybe you reached that conclusion based on some non-verbal cues you saw from your listeners indicating that maybe you've talked too much.  You noticed their fidgeting, or the glazed over look in their eyes, or you've seen them scratching or rubbing the back of their neck, or you've seen them looking away, or noticed they frequently interrupted you, or maybe their "uh-huh" answers were an indication to you that they were just trying to speed up the conversation, so you could get to the point and shut up.

I'm sure most of us have been guilty at one time or another knowing we've talked or said too much.  A familiar quote attributed to Abraham Lincoln says, "Better to remain silent and be thought a fool, than to speak out and remove all doubt."  The problem with saying too much is that it increases the likelihood of saying something hurtful, critical, slanderous or destructive about someone else.  Words are powerful.  The childhood saying, "sticks and stones may break my bones, but words will never hurt me," is so far from the truth.  Words can and do hurt.  Words can divide families, friends and fellow workers.  Words can destroy relationships.  Words can destroy your integrity.  

As I worked my way through the Book of Proverbs and developed the list of upcoming blog topics that I would like to share over the coming weeks, I was amazed at how much this Book had to say about this particular subject.  There were far more verses dealing with this subject than any other subject.  Do you think it might be something that we take a closer look at?

Consider the following verses.

Proverbs 10:14, "Wise people store up knowledge, but the mouth of the foolish is near destruction."

Proverbs 10:18-19, "Whoever hides hatred has lying lips, and whoever spreads slander is a fool.  In the multitude of words sin is not lacking, but he who restrains his lips is wise."

Proverbs 13:3, "He who guards his mouth preserves his life, but he who opens wide his lips shall have destruction."

Proverbs 17:27-28, "He who has knowledge spares his words, and a man of understanding is of a calm spirit.  Even a fool is counted wise when he holds his peace; when he shuts his lips, he is considered perceptive."

Proverbs 20:3, "It is honorable for a man to stop striving, since any fool can start a quarrel."

Proverbs 21:23, "Whoever guards his mouth and tongue keeps his soul from troubles."

I could have given several more.  I think these convey the point extremely well.  Those who consider themselves ethical in business and in life must learn how to practice verbal restraint.  Do you think that is a fair assumption? 

The verses above contrast the wise person from the foolish person with regards to practicing verbal restraint.  The wise person stores up knowledge, restrains his lips, guards his mouth, spares his words, stops striving and guards his tongue.  What is the result?  He "keeps his soul from troubles."  The mouth of a foolish person is described as near destruction, hides hatred, spreads slander, can't keep his mouth shut, talks too much and starts quarrels. 

Is it easy to practice verbal restraint?  Absolutely not!  Why then is it so hard?  Why do our words often cause so much harm and hurt, especially with the people we love the most? To better understand this dilemma, consider these thoughts from the New Testament Book of James.  The writer of James describes the tongue as something that no man can tame, that it is an unruly evil, that it is full of deadly poison.  Ouch!  That's not a very glamorous picture is it?  He compares the tongue to the rudder on a vast ship.  The ship however large it might be can be turned by the movements/actions of its very small rudder, just like the tongue can control us.  He goes on to say that with our tongues, we bless God and curse men, often at the same time.  He even says a person's outward demonstration of their religion is worthless if they cannot control their tongues.  Does this leave us without hope?  Again I say, absolutely not!

The pilot of a ship is the one that controls the rudder.  "No man" can tame the tongue, but God can.  When we allow Him to pilot our ship, He can help us control our tongues.  He is the One that can teach us how to practice verbal restraint. 

I realize not everyone reading this blog believes in having a personal relationship with God.  Some may even doubt the existence of God.  I respect your beliefs or lack thereof, but today's topic about the destructive tendencies of one of our smallest body parts, the tongue, when the mind has it flapping out of control and saying too much, I cannot but acknowledge the reality that something so powerfully destructive needs something even more powerful to control it.  That's why I could not leave this topic without expressing my personal conviction that controlling the tongue requires Divine help. 

The Value of Integrity

Have you ever considered how valuable personal integrity really is?  I'm not talking about worrying about how your conduct appears to others.  I'm talking about that inward character that manifests itself outwardly in how you live your life.  Can you really put a price tag on it?

Proverbs 10:9, "He who walks with integrity walks securely, but he who perverts his ways will become known."

Proverbs 19:1, "Better is the poor who walks in his integrity than one who is perverse in his lips, and is a fool."

Integrity is defined as an adherence to moral and ethical principles, a personal authenticity.  Integrity is doing what's right when no one else is looking.  Bobby Jones was considered the greatest golfer in the world during his time in the 1920's.  He held the record in winning major golf championships, until Jack Nicklaus broke his record in the 70's.  One day during the U.S. Open Championship, Jones drove his ball into the woods, and accidentally nudged it. Although no one saw him move the ball, he penalized himself one stroke, which caused him to lose the game by that margin. When praised for his integrity, he said, "You might as well praise a man for not robbing a bank."  Think about that.  No one saw it, yet he knew he had moved his ball.  No cover up, no ignoring the rules.  He did the right thing, even though no one was looking.  That's integrity.

Let's look at the verses again.  First, the person of integrity walks securely, he never has to look over his shoulder to see if anyone is watching.  He never has to rehearse a story in his mind or to other accomplices to keep it straight.  Dishonesty and moral failure will come out, eventually.  Mark Twain, said it best, "If you tell the truth, you don't have to remember anything."  You will walk securely.  Secondly, the verse in Proverbs 19 puts a value statement with integrity.  It is better to be poor, and be a man of integrity, than to have great wealth and be a liar and a fool.  Victor Kiam, the businessman who loved the Remington electric razor so much that he bought the company, once said, "As an entrepreneur, a reputation for integrity is your most valuable commodity. If you try to put something over on someone, it will come back to haunt you."

If ethics can be taught, as I concluded in last week's blog, even though some may differ with that conclusion, can integrity also be taught?  Aren't they really one and the same?   If you are grounded in sound moral and ethical principles through your developmental years with sound teaching in both word and by example, will that not help to shape your character to be a person of integrity?  It takes years to become known as a true person of integrity.  You live life to a higher standard.  You seek not to please men.  You speak the truth.  You do what's right, decent and moral.
 
BAM!  All of that reputation, all your integrity, all your moral character can evaporate in an instant.  That which took years to develop, can be gone in an instant.  Moral failure, compromised ethics, dishonesty can take all of the integrity that you developed over the years and flush your reputation down the toilet.  It can be gone in an instant.  Trust me.  I know what I'm talking about here.  It is painful.  It is devastating to you and the people you love and respect.  It can destroy you.

Do you fear that you may have lost your integrity?  Maybe you feel your credibility has been damaged.  Can integrity be regained?  Can you ever be trusted again?  Can a tarnished character ever be made whole again?

I'm convinced, and I believe it can.  If I didn't, I wouldn't be writing this blog.  I struggle at times with what makes me think I'm qualified to write this blog on Business Ethics.  Me, of all people, who's integrity was lost in an instant.  What makes me think anyone would listen.  Why subject myself to even closer scrutiny and professional ridicule by those who know or learn about "my story".  Why listen to me?  I honestly have struggled with this, but I started looking at the men in the Bible.  Men, whom God used to do His work on earth.  With the exception of Jesus, who was the Perfect Man, all of the characters in the Bible had flaws.  Some of them major ones too.  Think about the Old Testament.  There was Moses, living high in Egypt, yet he killed an Egyptian and had to flee Pharaoh.  His reputation was ruined, yet God used him to lead the children of Israel out of Egypt.  Then, I think of David, King of Israel, whose immoral deeds are clearly spelled out in the Bible, yet he was known as the "man after God's own heart".  In the New Testament, I see Peter, who cursed and denied that he ever knew Jesus, when accused, while Jesus was on trial, yet Peter later preached on Pentecost and helped spread the Gospel to distant lands.  Then there is Paul, the human writer of 13 books of the New Testament.  He persecuted the early Christians severely, yet God used him.  Why?  These men's characters were flawed.  What I learned was that when failures come, and we set out to make things right again, that God will take failures and make them winners.  It shows what God can do with someone's life.  It is a testimony to the working of God in lives.  He can take the useless and make them useful again.

Let me warn you though.  That which can be lost in an instant, may take years, and in some cases, the rest of your life to restore.  Once integrity, trust and honesty are lost, healing and restoration takes time.  If your lost integrity has hurt people extremely deep, some people may never forgive you.  You may never be trusted by some, ever again, but with time, slowly, little by little, as you live your life redeveloping your inward moral integrity, that trust can return for most.

Integrity is something that you cannot put a pricetag on.  It is invaluable.

Can Business Ethics be Learned?

In an op-ed article in the New York Times in 1990, Michael Levin argued that teaching courses on Ethics is a waste of time.  In 1991, Irving Kristol wrote a similarly themed piece in the Wall Street Journal.  They both argued that teaching business ethics will not improve the behavior of business people, and it is naive to think they will.  Levin and Kristol laid out three basic reasons:  (1) People already know right from wrong, (2) Moral behavior is the result of cultural influences, (3) No one can really know right from wrong, which seems to be a direct contradiction of the first point.

So what kind of evidence did the 70's and 80's give to help produce the conclusions of these articles?  AIDS reached epidemic proportions.  There was the growth in the drug culture, cocaine use was blatantly open in board rooms and bars.  The divorce rates hit 50%, some couples begin to practice wife swapping.  Hostile takeovers in business became commonplace.  It was all about the Me, Me, Me, generation.  I could go on and on.
 
What about the 90's, the 00's?  Were those decades any better?  Maybe not as blatantly open in some respects, but just as corrupt.  I will let the reader fill in some of the moral failures that you can remember from the last two decades.  From Enron to Haliburton, from president's to presidential nominees, to moral failures with leaders of large ministries, ethics scandals have created a sense of urgency that business must do a better job of promoting ethical behavior. 

Still today, according to an INC Leadership Blog from 6/24/08, that states that many still say that ethics can't be taught, at least not past early childhood.  The reasoning is that you either have it or you don't.  It's like trying to teach someone who is tone-deaf how to carry a tune. 

So, do we conclude that ethics cannot be taught?  Absolutely not!  Almost 2,500 years ago, the Greek philosopher Socrates debated the question with his fellow Athenians.  Socrates' position was clear:  Ethics consists of knowing what we ought to do, and such knowledge can be taught.

In "Issues and Ethics", vol. I, no. I, from the Markula Center for Applied Ethics at Santa Clara University, "they reason that there are 3 levels of moral development.  The first level is that of the child, who defines right and wrong in terms of what authority figures say is right and wrong, in terms of what results in rewards and punishments.  The second level is the level most adolescents reach.  At this level, right and wrong are based on group loyalties; loyalties to one's family, loyalties to one's friends, loyalties to one's church teaching, loyalties to one's nation, loyalties to one's employment.  Right and wrongs are defined by what families and institutions have taught them, or what friends or business peers might think.  The third level is when the person stops defining right and wrong in terms of group loyalties.  Instead, the person at this level develops moral principles that define right and wrong from a universal point of view.  The moral principles of this person are principles that would appeal to any reasonable person because they take everyone's interest into account.  In other words, before an action is taken this person consciously considers how this right or wrong would affect them individually, how it would affect their loved ones and family, how it would affect their business and the people in it, how it might affect their country," and I will add one more, how it might affect their relationship with God.

Unfortunately, the reason why there are so many moral and ethical failures is because too many adults remain in the adolescent stage of moral development.  Far too many peoples' concept of right or wrong is based on what others have taught them, instead of having internal moral principles that guide them.  We are taught the "thou shalt not's", and we know we shouldn't, but if ethical standards are not life convictions, if we don't take in consideration the ramifications of our actions, then loyalties alone will not help us.  Does this help explain why President's fail, Pastors fail, Business Leaders fail?  It does not matter how smart or intellectual or how accomplished someone is, if their moral values are not continually growing, they are prime candidates for moral and ethical failure.  When you couple the Christian view of a sinful nature that came through our DNA, our parents DNA, our grandparents DNA, all the way back to Adam, you can see why just holding to a teaching, a belief, a loyalty is not enough.  If moral principles are not developed and ingrained within you through continually learning and applying ethical teaching, which I think have their origin in the Bible, you are subject to moral and ethical failure.  I'm not saying you will, but you sure are increasing your chances.

How can we learn to be more ethical?  The answer is simple.  Remain teachable.

Proverbs 9:7-9, "He who corrects a scoffer gets shame for himself, and he who rebukes a wicked man only harms himself.  Do not correct a scoffer, lest he hate you.  Rebuke a wise man, and he will love you.  Give instruction to a wise man, and he will be still wiser.  Teach a just man, and he will increase in learning."

Proverbs 15:14, "The heart of him who has understanding seeks knowledge,"

Proverbs 13:20, "He who walks with wise men will be wise,"

Have you been around people who are unteachable?  They just seem to know everything already.  Maybe some of you reading this supervise others.  How does the employee that you have to correct react?  Most times, it doesn't go very well, does it?  That's what the verses say happens when you try and correct one described as a scoffer.  Scoffers are unteachable.  The reason they scoff is because they know it all, already.  Yet, the verse above also says, if you rebuke a wise man, he will love you.  The wise man, the one I am calling the person that applies the knowledge of what he is taught, not only handles criticism well, but also will continue to grow and get even wiser.  His ethical and moral training does not reach a point that goes no further, it keeps growing.  Don't you think that growth in ethical learning will continue to benefit him in the days and years ahead? 

I would like to close with a short 10 question quiz taken from John Maxwell's book, "Self-Improvement 101".  Please answer them within yourself, and be honest with yourself.

 1.  Am I open to other people’s ideas?
 2.  Do I listen more than I talk?
 3.  Am I open to changing my opinion based on new information?
 4.  Do I readily admit when I am wrong?
 5.  Do I observe before acting on a situation?
 6.  Do I ask questions?
 7.  Am I willing to ask a question that will expose my ignorance?
 8.  Am I open to doing things in a way I haven’t done before?
 9.  Am I willing to ask for directions?
 10.Do I act defensive when criticized, or do I listen openly for truth?

How did you do?  If you answered "no" to one or more of these questions, then you have room to grow in the area of being teachable in general and teachable in the area of Business Ethics in particular.  Are you ready to start learning and applying ethical principles to your daily life?   

How teachable are you?

(Next Week:  "The Real Value of Integrity")