The unbelievable and shocking suspension of news anchor Brian Williams is one of the hottest topics of the week and something that impacts not only TV news viewers, but business people as well.
Advantexe just finished a very successful #TrainingMag Expo and Conference, where I had the chance to speak with a number of our clients about ethics and integrity in business and what does it all mean for the future leaders of tomorrow.
Surprisingly, there was a general apathy towards the topic and Mr. Williams’ situation. One person I know pretty well shared the following statement which I found interesting and intriguing: “Come on, everything is different now. The news isn’t the news, it’s entertainment, and Brian Williams is trying to differentiate himself as an entertainer. Ethics and business integrity aren’t part of that equation.”
The sound I heard off in the distance was Walter Cronkite rolling over in his grave.
As the Training Magazine Expo and Conference is dedicated to discovering and learning more about making businesses better and more productive – including developing skills in the areas of ethics and integrity – I thought it would be interesting to explore a few thoughts about ethics and integrity from a Business Acumen perspective.
To start, it is clear that business ethics and integrity is a different parts of the business ecosystem because the very nature of the business ecosystem and free market economy is based on the assumption of truth and ethics. However, in most evolved business ecosystems today, people have become extremely distrustful of business organizations, and the bigger the organizations get, the more distrust people have. One of the reasons I think social media has become so critical is because it is the great equalizer of truth and ethics in business; if a business does something wrong, the rest of the world knows about it in just a few clicks and a post. The brand immediately is “rightsized” and equalized in the most powerful way.
So is there a direct correlation between a brand and ethics in business?
Advantexe hosted a private reception after the Training Magazine Expo yesterday evening and I had the pleasure of having a conversation with two unique individuals about social media and building brands. Wayne Provart of Mentor Tech has been a business professional since 1960 and is just leveraging the power of social media in business. Margaret Amisano, a Marketing Manager and 2011 graduate of Syracuse University is a dynamic young professional who is utilizing every tool that social media has to offer in order to grow the business of an excellent virtual classroom company called new row. In our conversation about marketing and business development, it was so clear to me that these two successful and diverse people are successful because they embrace tools like social media in an ethical way and with great integrity to build brands.
From a business acumen perspective, I believe that business ethics and integrity are important and critical for long-term success. Here are a few thoughts on why and the impacts:
The Brand and Brand Equity
In a free market economy, the customer can fire a brand by not buying a product anymore. If a leading company like Google, Apple, or IBM were to do something similar to what Brian Williams did, customers would simply not believe their value proposition any more and would not purchase their products. Over the past few years, the brand perception of Walmart has eroded because of a perceived lack of integrity when it comes to paying scale and aggressive pricing practices. I do not believe that this perception is fair to Walmart, but unfortunately, perception is reality in most cases.
Walmart has a perception problem, but what about a brand that is dishonest and lies like Brian Williams? A few years ago we had a great example, Skechers.
And for those who can remember Walter Cronkite, then you might be able to remember when cigarette companies had physicians in their advertisements creating the perception that cigarettes are healthy:
Financial Investment
Another reason why business ethics and integrity are important is the relationship they have to financial investment. When an investor is considering making an equity investment in a stock, there are a number of factors that go into that purchasing decision. Aside from all of the sophisticated math and numbers such as the NPV of discounted cash flows, profit, and health of the balance sheet, most savvy investors also take the temperature of business ethics and integrity related to brand equity.
Companies that have poor ethical standards have lower market capitalization; it’s as simple as that. Therefore, successful organizations that are looking for and driving further investments for growth and value creation need to do whatever is possible to maintain a clean reputation and create a culture of the highest ethics and integrity.
An organization called “Audit Integrity” publishes an annual report of the most trusted brands in the world and why. Companies like Progressive Insurance score very highly because of their value proposition and integrity to customers. That integrity translates directly into total shareholder return.
Alliances and Partnership
In today’s global market place where competitors are also customers who are also partners, having high ethics and integrity is critical to success. Partnerships happen because they are important to the success and a business can be made with great alliances and partnerships.
The only way to have great alliances and partnerships is to have a great brand and a great reputation. In this world of instant access to social media, one bad move, one lie, or one misrepresentation can destroy a brand
In summary, what Brian Williams did will most likely end his career. If business people think that there are shortcuts to the truth and lies to be told that create the perception of a stronger brand, they are clearly wrong. The Brian Williams issue is a stark reminder that there is a reason why trust, ethics, and integrity are important. They are the catalysts that drive brand equity, and more importantly, total shareholder return.
And that’s the way it is…