Stand Tall: Stand on Principle or Go With the Flow?

As an owner, CEO, senior manager or supervisor of a smallDecisions group, you are often called upon to “stand tall” on making not only basic business decisions but also upholding the principles and values of the company. Most business decisions can be reduced to numbers, rules, and standards. But pressure on company management to compromise or look the other way and bend, equivocate or break company principles and values has never been greater. Societal norms of behavior and conduct continue to shift which poses challenging conditions when dealing with conflict, conduct, morality, and ethical business practices.

Company principles and values may have been set when the company was founded. In some companies, this could be decades ago. It is imperative for the company to be active and consistently reinforcing its principles and values. Management needs to “walk-the-talk” as they conduct their daily business responsibilities. It is also a common expectation that the company principles and values be extended and demonstrated in the personal lives of management.

I have addressed the topic of business principles and values in previous articles in this blog.

These two articles focused on establishing principles and values for a business and their relationship to business success. However, the thorny issue of what you do when a major conflict occurs between published and practiced principles and values of the company and real incidents or circumstances threaten the ability of the business to operate successfully.

The following are three examples where executives had the choice to go with the flow or “stand tall” and uphold their values and principles.

Contaminated Product
One of the most significant product-recalls was the decision by Johnson & Johnson in 1982 to remove 31 million bottles of Tylenol that cost the company an estimated $100 million. The packaging methods during that time did not expect that anyone would tamper with the contents on the shelf in the store. In this case, seven people died after ingesting contaminated Tylenol. Someone injected poison into the Tylenol capsules while they sat on the store shelf.

Johnson & Johnson took independent action to remove all of the Tylenol product from pharmacy shelves and retooled their packaging process, which set the standards for packaging and distribution for food and medicine. Consumer loyalty due to the company’s quick and independent decision quickly restored profits when new product was produced and distributed.

Johnson & Johnson could have resisted pressure to remove product and change the packaging. However, executive management new what the right decision was and took immediate action once the problem was diagnosed (drug tampering), removed product from store shelves, changed the packaging and redistributed new, and safe, product.

Organization Conflict
I had a personal experience standing by my personal principles and values. I served as a voluntary director for a state high technology association, which was part of a national organization. The national organization hired a new director who wanted to radically change the business model of the organization and deemphasize the state office and its programs.

This change posed a major impact to the state association and would quickly reduce services to members. Likewise, the employment of the state office employees was in jeopardy. I challenged the director at the next national meeting to modify the change to allow it to go state-by-state so that programs in states that were operating successfully and “profitably” would be allowed to continue. This was not received well.

Fortunately, the vice-chairman of a leading multi-national electronics company, who was the voluntary chair of the national organization, supported me and helped me wage a highly political battle with the director of the national organization. I received calls from other board members who sided with the director and could not understand why I would protect the state programs and specifically our staff who they described in a disparaging way.

Despite the pressure to go with the flow, the state association was allowed to continue as it had operated and the staff was protected. To say the least, my relationship and standing with members of the national association was non-existent with the exception of the vice- chair of the board who allowed my position to be heard and acted upon.

Conflict with the Owner
In another situation, I was the chief operating officer of a technology company and was hired to deal with a rapidly changing business environment that challenged the design and manufacturing operations to meet objectives and commitments. One of the goals was to provide a reasonable and comfortable work environment to attract and retain engineers. As a result, it was common for the engineers to post pictures and posters on the walls of their work areas.

The owner took exception to this practice one morning and started going through the engineering department tearing down many of the pictures himself. I was called by one of the engineering managers and quickly interceded. I was able to convince the owner to leave the engineering area and return to his office to discuss his concerns.

While the immediate crisis was brought under control, this incident was one of several where I had to try and buffer the resistance of the owner to changes in the business. Fortunately, we did not lose any engineers over this incident but the owner and I continued to have a difference over the way the company should change. Unfortunately, this chafing over how the company was changing was the reason my contract was not renewed and I left the company.

I could have bowed to the owner, but it would have caused significant disruption in the working environment, business growth and bottom-line success, which were the reasons I was recruited..

Establishing, communicating and reinforcing the principles and values of the company is basic for a successful company. They are the cornerstone of the company and establish the foundation of how the affairs of the business will be conducted. The true test comes when you are confronted with interpreting and acting upon situations, which are contrary to the values and principles of the company.

Johnson & Johnson executives took the initiative and took action to remove product and make the investment to package and distribute their product in a safe manner. Unfortunately, we have witnessed other companies violate their values and principles in favor of trying to get by, seek legal remedies and avoid responsibility.

In the other two examples I was personally involved in, it was necessary in the first example to defend the industry association programs and employees from someone who operated by a different set of standards. In the other example, an owner vented his frustration irrationally over changes in the working environment in the engineering department.

It would have been easy to look the other way and accept the actions in both instances. If I had, however, I would not have a credible standing applying values and principles in future situation. Employees and peers would see that I was guilty of exercising my stand on values and principles in an inconsistent manner based on the prevailing (but always changing) circumstances.

Stand tall, live out and practice the values and principles of your company. In so doing, you will earn the respect of your peers and employees. Your conduct and behavior will be consistent, employees and peers can rely on you to reliably interpret and act in accordance with what the company stands for.

Stand tall and honor your company values and principles.

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