Back to the (Slippery) Slopes

re: Giving Back is a Slippery Slope

I recently attended Harvard Business Schools 2007 graduation and was reminded of Joseph Newhard’s article, “Giving Back is a Slippery Slope,” which appeared a year or so ago in your publication.

Newhard said it’s a “misconception that successful companies accumulate earnings at society's expense,” and suggested that if people choose to pay for a company’s goods or services they implicitly validate the company itself. He said consumers had a “desire to penalize and punish producers for the great crime of producing a good or service desirable to their customers.” This is a critical misunderstanding of consumer sentiment at a time when the business community needs more than ever to commune with the people it sells to.

Tyco, Enron, WorldCom and sub-prime lenders represent only a small percentage of America’s business community, but the impact of their improprieties on consumers’ perception of corporate America is huge. Consumers agreed to buy those companies’ goods and services on a presumption that they weren’t harming the communities in which they did business. People presumed honesty and a degree of “goodness” or social responsibility—the same presumptions they make upon meeting new friends or colleagues. When they discovered otherwise they realized the cost of doing business with those companies was greater than the dollar figures on the bills, invoices or price tags.

In his address at Harvard last week, American Express CEO Ken Chenault said of businesses: “Society allows us to operate in ways that enable us to deliver good returns to our shareholders. In exchange, we have an obligation to do things the right way, to be helpful to society, and to avoid actions that are harmful.” Chenault said service is a critical component of any business plan, and the only way corporate America will regain the trust of American consumers.

It’s a shame companies like American Express are burdened by the misdeeds of their corporate peers. But it’s an even greater shame that the Newhards of the world are actively working to maintain the status quo and prevent the business community from evolving as it must. Ultimately, Newhardian hubris makes doing business less pleasant, and more expensive, for everyone.

Jeb Tilly
Estes Park, CO