Slimy, sleazy and smart

I’m not going to tell you that it’s OK to lie, cheat and steal. But I’m also not going to preach that you should act like a Boy Scout or Girl Scout all the time. There’s a middle ground—and that’s the smart place to be.

Listen, it’s easy to give speeches about how your department must maintain “the highest ethical standards.” That means nothing. Zero. Zip.

Talking about how honest you are doesn’t make it so. In fact, most veteran business people find such assurances worrisome. The folks with the cleanest record don’t discuss it. They let their actions do the talking.

Full disclosure or partial truth?

When I’m talking to employees about our plans for the next quarter, I can’t say, “This all depends on whether I negotiate a merger next week,” or, “Some of you in this room won’t be around by the end of next quarter because I’m canning you.”

To me, the No. 1 ethical dilemma is deciding how much to tell people. When you’re CEO, you’re privy to all kinds of confidential information.

I’ve found the safest approach is to lie by omission when necessary, but never by commission. I may omit a few key facts when responding to a manager’s question about our company’s growth plans, but I won’t give false facts.

It’s what I call “selective silence.” Choose when to shut up. If you’re pressed to reveal more, evade the issue by promising to “give that more thought” before you answer. Then move on.

Defending the indefensible

I’m not saying you should try to get away with murder. If you have an obligation to hide a pending deal, that’s one thing. But if you’re downright deceptive, that’s another.

Many years ago, I had an employee who was advising a new, potentially huge client. He accidentally billed the client for 10 extra hours, and the client paid without a peep. He told me what happened and said, “Hell, I got away with it once. Maybe I should keep doing it.”

I said firmly, “Oh, come on now. Get serious.” Then I laughed and added, “If you keep it up, don’t tell me.” I soon forgot about it, assuming he would never intentionally overcharge the client.

Six months later, I got a letter from the client saying they’re firing us. They wrote that my firm billed them for 144 extra hours! So I let a gravy-train customer get away because I didn’t put my foot down.

Sleeping like a baby

For me, the test of whether I act ethically is whether I sleep well. Do I go to bed rationalizing what I did, trying to justify what my conscience tells me was wrong? Or can I take pride in handling a delicate situation in a way that would make my parents proud?

Last month I spoke to a trade group. I made some controversial points about our business. I cited two studies that supported my views.

What I didn’t say was that some respected critics found flaws in these studies, and that my firm helped fund one of them. But I did provide handouts that disclosed all this information. I felt that was enough.

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