I have had several moral dilemmas posed to me in the past few months – an unusually high number that I believe is related to the difficult economic times that we have faced in recent years. Each situation was very different, but the approach to resolving each situation has the same pattern. Here are a couple stories to illustrate:
Dilemma #1 – A friend’s startup company “ABC Co” just climbed out of significant debt in the past 18 months and has been profitable for 3 months. ABC Co’s largest customer, comprising 25% of revenue, goes out for bid on the services provided by ABC Co. The Customer’s senior manager over supplier accounts asks for a confidential meeting with ABC Co and essentially states that he would guarantee that ABC Co wins the bid if ABC Co hires this manager away into a current job opening with ABC Co.
My friend replies that he wants to win the bid and keep the Customer’s business based on ABC Co’s merits, and that ABC Co’s hiring would go through proper protocols, not be circumvented by side deals. The manager becomes angry and strongly influences the bid against ABC Co. My friend loses a large customer and the winning solution is actually marginally workable because the manager who controlled the bidding was unfamiliar with some complexities of the services required.
The dilemma? Should my friend approach the President of the Customer company (who is a colleague in other matters) and disclose the manager’s unethical proposal, or should he honor the manager’s request for a confidential discussion?
1) Has ABC Co done anything illegal, immoral or unethical to date? No. First rule is always stay within the law.
2) Has ABC Co kept its promises? Yes, it agreed to treat the manager’s conversation as confidential, although perhaps in hindsight this promise was a mistake. Second rule, always keep your word, unless keeping your promise will put you in jeopardy of Rule #1 above.
3) Will either alternative (keeping ABC Co’s promise of confidentiality, or breaching ABC Co’s promise) destroy someone else [the Customer]? No, the results of a marginal winning bidder might “hurt” the Customer business a bit, but won’t bring the Customer’s enterprise to its knees. Rule #3: only consider other alternatives if keeping Rules 1 and 2 will destroy someone or something unfairly.
The Solution: My friend decided not to disclose the manager’s unethical proposal, since it might only come across as sour grapes, and because there was a possibility ABC Co fairly lost the bid based on other unknown facts. He gracefully acknowledged losing the Customer’s business to the President, then asked the President to provide candid feedback to him so ABC Co could learn from its mistakes and do better next time. The hope? To learn a lesson from this process and make an unbeatable proposal next time to win the business back. If the manager’s decisions were so hugely detrimental that they would destroy the Customer’s business, then my friend would have changed his mind and a) disclosed to the manager his intention and then b) enlightened the President regarding the manager’s unethical proposal.
Side note: In my own workplace, I have seen customers return to our business 2 or 3 years later after we took the high road and lost a deal. They end up being the most loyal of customers in the long term, because we kept the relationship paramount, more important than a single deal.
Dilemma #2: A client I work with came across a purchasing opportunity that was a once-in-a-lifetime find. This item was extremely rare, offered at an unheard of low price. However, the seller was managing a competing business under receivership and would only sell the item for cash: no receipt, no bill of sale and no paper trail.
The Dilemma? Should my client buy the item, which is likely “hot” and without legitimate title attached, or turn the deal down?
1) Has the client done anything illegal, immoral or unethical to date? No.
2) Is taking this opportunity illegal? Yes. You’ve got your answer already. Think about the risk of buying a hot item and tarnishing the client’s reputation as a purveyor of stolen or illegally obtained items.
3) Will doing either alternative bring someone or the business to its knees? Yes. an illegal act could trigger reputational risk that is irretrievable. If the message sent to other employees is that illegal acts are condoned, this sets the stage for other, highly risky transactions that could also harm the business.
The Solution: The client has to weigh the benefit of gaining a steal of a deal item, against the risk and magnitude of negative consequences, either legal, financial or reputational.
Side note: I have seen situations like these go both ways — sometimes clients take the amazing deal and sometimes they turn it down. However, I have seen more than one business lose long term relationships and future deals as customers and suppliers eventually figure out the “value system” of a business and decide to terminate dealings.
Bottom line: Choose your options wisely, consider the long-term implications of your choices, and protect your own reputation.
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