Business ethics will drive success in the new millennium

As trucking's tumultuous post-deregulation era finally gives way to the next millennium and its host of new challenges, fleet managers will be compelled like never before to examine - and embrace - the values that drive their businesses and the ethics that guide their decision-making.

Granted, talk of values and ethics was not a hot button during the go-go '80s and the so-on '90s. Truckers had enough to worry about just keeping the doors open to spend much time philosophizing about corporate culture and the common good. But business life in the coming 2000s will be a lot different than the period of adjustment and maturity trucking has just rolled through.

For one thing, companies - all companies - will be increasingly expected to toe certain lines of conduct as our consumerist society grows in sophistication in the years ahead. The global village being ever shrunk by the galloping Internet and other seductive communications advances means few businesses will "get away" with conducting themselves differently outside their home markets.

But even companies - including most trucking firms - that never set foot outside the U.S.A. face changing demands in the new millennium. Companies that have managed to get by so far without a social conscience will eventually discover how difficult it is to maintain a business on the shifting sands of weak values and questionable ethics.

That's because corporations will be operating under many watchful and demanding eyes. Companies that run roughshod over the business landscape will increasingly draw fire from government regulators, disgruntled employees, dissatisfied customers, and concerned shareholders.

The best way not to be a target is to not act like one. That's why one value all companies should hold dear to their hearts is the pursuit of enlightened self-interest. Accepting its importance is the key to understanding why it's essential for a business to always act and behave in concert with the best interests of the society it serves.

Well, society's a big word. To keep things in perspective, think instead in terms of the communities your company serves or impacts. For most trucking fleets, these include the communities of owners (or shareholders), workers and customers (which collectively are "stakeholders"), suppliers/vendors, the motoring public, and the people who live anywhere the firm operates or its trucks drive through.

How your values and ethics impact these communities - and, in turn, the fleet's ability to prosper with and for them - is not always reflected in the "mission statements" that have become staples of American corporate culture.

A mission statement generally tells shareholders, employees, and customers what a company does and perhaps how a company does it. It doesn't necessarily reveal the values - if any - that drive those actions.

Values are essentially community-based. A company's values can serve no one. Or, in the best of all worlds, its values exist to serve one or more of the communities of people touched by the company's actions.

In today's world, the most effective business values are self-propagating. Compare that to the early experience of corporate life in America. The first corporations on these shores, such as the Massachusetts Bay Co., were chartered by the British government to conduct business - insofar as it helped colonize the New World. Once that empire - building mission was achieved, their charters were revoked.

In other words, those colonial companies had no reason to pursue enlightened self-interest; they had nowhere to go but down. Therefore, they could be as ruthless in their dealings with Native Americans and non-British settlers as they chose. They didn't have to worry about what later impact their expedient, foot-to-the-fire actions might have, such as the eventual breakup of the British Empire put into motion by the American Revolution - itself kindled by unfair trade and taxation issues.

Oh, if only life was so simple for the modern American corporation. Today, U.S. corporate leaders must bear responsibility not only for their actions and those taken by companies under their stewardship, they must also be prepared to answer for all environmental or legal policies linked to predecessors or past deeds.

In short, "business ethics" can't be seen as a contradiction in terms. Consider how University of Kansas ethics professor Richard

DeGeorge (in Beyond the Bottom Line) shatters the myth of business as amoral: "If it were true that business is viewed as amoral, that it is not expected to behave according to moral rules, and that it is appropriate for it to do whatever is necessary in order to increase its profit, then there would be no surprise, shock, or uproar when a business acted immorally. The uncovering of bribes and kickbacks would not be news."

Nor would it be news if a business was accused of breaking laws, competing in restraint of trade, selling or providing shoddy goods or services, polluting the environment, or harming the welfare or rights of workers.

In his book, Beyond the Bottom Line (Facts on File, 1985), author Tad Tuleja points out that "... even conventional profit maximizers must now recognize that the nature of corporate obligation has changed." He says the base of customer support and social involvement has broadened to the point that corporations have taken on obligations to groups that "may have no direct connection with the operation or ownership of firms."

Tuleja refers to the groups to which companies have obligations as "corporate publics" or "stakeholders," as they are known at some firms, including Cummins Engine Co. He points out that the original stakeholders were a company's shareholders and investors. But as the base of the corporation expands, the other publics (or communities) it serves can be seen as "having interests roughly analogous to those who put up the first stakes" to get the business going.

Most trucking firms are obliged in one way or another to answer - and therefore act ethically towards - six sets of stakeholders: 1) owners/shareholders/investors; 2) employees/contractors; 3) customers; 4) suppliers/vendors; 5) local communities; and 6) society in general.

Even today, unless a company is formed by truly cause - driven founders, like the two guys behind Ben & Jerry's Ice Cream, the lion's share of attention is usually still paid to meeting the concerns of owners/shareholders.

But ignoring or, even worse, hurting the other communities or publics the company impacts can come back to take a vicious bite out of profits - and thus, out of the pockets of owners, shareholders, and investors.

Again, think of the value of pursuing enlightened self-interest. Anything done to serve the interests of the five other groups will ultimately serve the sixth, the owners.

To begin with, consider the benefits that can result from serving well the needs of employees: general labor peace, lower overall employment costs (including less turnover), higher productivity, flexibility, and quality, and enhanced public image.

Customer service is a value seldom addressed weakly by trucking firms. (To learn how customer service is keeping pace with these changing times, see the related article in this section.) Truckers, be they owners, drivers, or mechanics, know that what drives their business - and supports their livelihood - is satisfying the customer.

When it comes to customers, the most obvious ethical pitfall to avoid is defrauding them of the value of any goods or, in the case of trucking, services provided. Fortunately enough, the stiff competition truck fleets face from each other and other modes of transportation pretty much precludes the successful cheating of customers.

On the other hand, fleets may face an ethical dilemma if they push customer service to the point it becomes detrimental to the other communities to which the business must answer. Certainly, companies have driven themselves right out of business by delivering too much customer satisfaction. And there are businesses that have boosted customer service by breaking the backs of workers.

That's why it is both unethical and unprofitable for a fleet to drive its drivers to break speed laws and disregard hours-of-service regs to keep unreasonable shippers/receivers happy.

How fleets relate to their suppliers/vendors also impacts values, especially as trucking equipment becomes more regulated and technologically complex. While fleets need to retain their bargaining power as buyers, suppliers have gained the need to know more about a given fleet's business in order to provide it with the best services and products. And to stay in business as industry suppliers. The more fleets and suppliers are linked by integrated systems, the more each will value the value of mutually beneficial cooperation.

Many fleets understand the value of serving the local communities in which they work, whether through financial or other support of various programs and charities. But many more still don't. Perhaps the fleets most in danger of missing out on opportunities to build their business by acting locally are those physically remote from population centers and those consisting of many locations centrally managed from a corporate headquarters.

No ethicist would argue that community spirit has to begin or end with property lines. Especially not in a business as mobile as a truck fleet. If there's no town just down the road that can benefit from your company reaching out, then extend that reach into communities your trucks visit frequently.

But how can you make an impact? Alan Reder, author of In Pursuit of Principle and Profit (G.P. Putnam's Sons, 1994), suggests several ways businesspeople can view their community role:

* Whether they seek the mantle or not business leaders are community leaders by definition, and therefore have a responsibility to the community that transcends ordinary citizenship.

* Because business leaders know how to get things done quickly and cost-efficiently, they constitute a unique and invaluable resource for those trying to solve community problems.

* Business leaders have far more ability than individual citizens to mobilize corps of volunteers and aggregate material donations.

Besides outright fiscal support of worthy causes, Reder points out that companies can add value to their communities by subsidizing or otherwise "positively encouraging" employees to volunteer their time, energy, and expertise to the causes that most interest them. That would make for a win-win-win situation by boosting the community's welfare, the employee's self-worth, and the company's image.

The impact of the company on society in general is perhaps best addressed by invoking the golden rule. That is, if in going about their business, managers do only what they would have done to them, they can be assured they are working ethically.

In the final analysis, sticking to values entails striking a balance among all the groups that must be served. And, as dean of management gurus Peter Drucker advises in Management Challenges for the 21st Century (HarperBusiness, 1999), the practice of ethics can't be separated from the businessperson practicing them:

"Organizations have to have values. But so do people. To be effective in an organization, one's own values must be compatible with the organization's values. They do not need to be the same. But they must be close enough so that they can coexist. Otherwise, the person will be frustrated, but also the person will not produce results."

Bear in mind practicing your values at work will benefit your employer, employees, neighbors, and colleagues. And you.

Here are key points of the U.S. Dept of Commerce's voluntary guidelines for how businesses can adhere to a code of conduct that respects universal human rights:

1. Provide for a safe and healthy workplace.

2. Practice fair employment practices, including avoidance of discrimination, and respect for the right of association and the right to organize and bargain collectively.

3. Practice responsible environmental protection.

4. Comply with federal and local laws promoting good business practices, including those prohibiting illicit payments and ensuring fair competition.

5. Maintain, through leadership at all levels, a corporate culture that respects free expression consistent with legitimate business concerns; that encourage good corporate citizenship; and where ethical conduct is recognized, valued, and exemplified by all employees.

For more information on putting these model business principles to work, contact the Commerce Dept. at 202-482-2000.

Boise, Idaho-based ECCO, an industry supplier of warning lights and backup alarms, recently released a listing of its core values - and a statement of how they are "not just words" but the operating philosophy of the firm.

Core Values: Team membership; Sharing; Continuous and rapid improvement; Profit; Customer satisfaction; Citizenship; Quality; Operating philosophy:

"Each of us have principles that guide our lives. When faced with personal choices in life, those people who have strong beliefs usually have an easier time making a good decision. Sticking to a congruous set of values over a period of time leads to more harmony and consistency in life..."

"Because we want to operate as an effective and harmonious company, our Core Values are the fundamental guiding principles for ECCO Team Members when making a decision for the company..."

"ECCO Team Members may choose not to adapt these specific principles in their personal lives, and that's okay. But we suggest if they don't know what their personal values are, it might be something to consider."

More information on ECCO's approach to corporate values can be obtained by contacting the company by phone at 800-635-5900, by fax at 800-688-3226, or via e-mail at eccolinknews@eccolink.com.