Category: General Commentary

By Posted on Posted in Business Ethics, General Commentary, Uncategorized

A few quotes from Robert J. Shillman, Chairman and CEO of a phenomenally successful company, Cognex Corp. of Natick, Massachusetts–as interviewed in the April 10 Wall Street Journal by Joann S. Lublin.

We never paid starting bonuses. It’s morally corrupt.

The most important thing the package includes is a great place to work. [And] I am going to give you a bonus and options package that will hopefully make you a multimillionaire someday. If you are coming for the short term, I don’t want you here.

The 15-year perseverance award is a trip for you and your spouse to one of the wonders of the world, like the Great Wall of China. All you do is show up. You get $1,000 in spending money and an extra week vacation.

For 25 years’ service, we set up a charitable-gift account and make the employee the trustee. We put $25,000 in, and they can contribute it to any IRS-approved charity anytime in any amount. I want them to feel the joy of giving…How many people get to be a philanthropist? Most people never give away $25,000 in a lifetime. I care more about morale below the top.

Remarkable from anyone. Particularly remarkable from the CEO of a very profitable technology company. The whole article is full of wonderful stuff about his attitude toward employee and executive compensation, and how his goal in starting the company was to make a difference in the world. It’s not just rhetoric, either. When he felt he had enough “toys” in his life–“So I’ve been able to go out and buy a big house, fast cars and some pieces of art. I also have donated more than $17.5 million worth of shares to charitable causes”–he stopped taking compensation and has his substantial package donated to charity.

All I can say is “Wow!” and “Bravo!” Somehow I don’t think we’ll see him in court facing ethics violations changes any time soon.

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By Posted on Posted in Business Ethics, Ethics in Government, General Commentary, Uncategorized

How much more evidence to we need? Every time I turn around, it seems there’s another revelation about lies told to the American public by this corrupt and incompetent administration. Now, the Washington Post reports that the government knew all along that those two trailers it found in Iraq, and used to belatedly justify the invasion, had nothing to do with biological weapons production.

If ever there was an argument to be made for a parliamentary style of government, where a crisis forces new elections, it would be this administration. With its lies, its finger pointing, its illegal and thuggish tactics (can you say “Valerie Plame”? It seems that GWB can and did when he gave the authorization to blow her cover, according to Scooter Libby), and its very scary politics, this administration has been an ethical and moral disgrace from the get-go.

What kind of scary politics?

  • Going to war without justification
  • Stonewalling the 9/11 Commission
  • Rushing through legislation, like the Patriot Act, that is a direct threat to freedom and democracy
  • Illegally spying on its own citizens, and then trying to make it legal after the fact when it got caught
  • Overturning so much of the progress made on environmental and social issues over the past fifty years
  • Oh, and let’s not forget the deliberate decisions to let New Orleaneans face their flooding city without meaningful assistance, and then to repeatedly deny that they had days of warning and chose to do nothing

    • And we won’t even discuss the whole passel of personal enrichment scandals that taint so many Bush allies

    Enough is enough, already. We don’t have a parliamentary democracy here–but we do have an impeachment process. It is time to impeach both GWB and Cheney.

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    By Posted on Posted in General Commentary, Other

    I went to a bookstore the other day and noticed two books prominently displayed on the same front table:

    Our Endangered Values: America’s Moral Crisis, by none other than former President Jimmy Carter, and a Beacon Press anthology, Global Values 101, featuring such well-known progressive thinkers as Howard Zinn, Amy Goodman, Robert Reich, and Lani Guinier, among many others.

    For more than two decades, the ultra-right has staked a claim around “values.” Unfortunately, the values they claim are not my values or the values of most people I know. Just as one example among many, the term “family values” has been far too often used to create a climate of acute homophobia–of bigotry. These people claim they’re in favor of family values, but their definition of family only includes one among various possible models: a dominant husband, a stay-home wife (or one focused far more on home than career, if she does work outside the home), and zero tolerance for divergence from the model.

    Well, I see a whole lot of families that don’t look like that, but that are loving, secure places for the partners and their children. And I see plenty that do fit the “traditional family values” model where abuse, infidelity, and/or alcoholism seem to rule the day.

    Let me be clear: there are, of course, plenty of loving, supportive families with a husband and wife in a heterosexual marriage; I am blessed to live in one. But our family is founded on tolerance, on freedom of self-exploration, and on the firm value of making the world a better place than we found it by helping to break down barriers of bigotry.

    So I find it very refreshing, as the author of Principled Profit: Marketing That Puts People First, a book with a strong values message within a progressive context, to see major publishing houses beginning to publish books like these.

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    By Posted on Posted in Events, General Commentary, Shel's Personal Life

    ​​​​This blog was launched on December 29, 2004, which means it just
    turned one year old. So allow me to wallow in a bit of reflection,
    please.

    I’d delayed blogging for a long time, because I’d
    thought that to be taken seriously, a blogger needed to post daily. I
    even tried to organize a group of non-blogging marketing pundits to
    each take a day of the week in a communal blog. That effort went
    nowhere, but I think at least three of us now blog regularly. Once I
    realized that many bloggers post once a week or less, I knew I could
    handle it.

    I started the blog with a few agendas. I wanted to:

  • Create a platform for my ideas and rants, of course
  • Open a doorway to a syndicated op-ed newspaper column (a dream I’ve had for decades) Support the Business Ethics Pledge campaign
  • Become more widely known in the worlds of business ethics and progressive politics
  • Develop new readers who would then buy my books, subscribe to my newsletter, etc.

    And
    in fact, in the spring, I went through my blog entries, selected seven
    or so, polished them, and submitted them to four different newspaper
    syndicates–all of whom turned me down. But I’ll keep trying.

    The
    blog has veered away more often than I’d have expected from what I’d
    originally thought of as its core topic: business ethics. But I already
    have a platform to talk about that: my newsletter, Positive Power of Principled Profit.

    It’s
    also hard to tell what impact it has, or where people are learning
    about it. I get very few comments, and many of them are from people
    I’ve steered to the blog via a post to a discussion list or one of my
    newsletters.

    So, this year, one of my goals is to build more traffic to the blog, which will be mirrored both at blogger.com and on my own PrincipledProfit.com site.

    There
    have been a few signers of the Pledge that I believe found me via the
    blog, and a few useful contacts. Hopefully, over the next 12 months,
    I’ll be able to know for certain that the blog is helping to shape the
    discourse.

    And meanwhile, there’s revamping the PrinProfit site,
    hosting my radio show (which I hope to syndicate as well), getting
    publicity for the Pledge, selling more foreign rights, and tons of
    other stuff. somehow, I find time to do at least some of it, between
    client copywriting and consulting projects.

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    By Posted on Posted in Ethics in Government, General Commentary

    Another must-read speech by Bill Moyers, one journalist who is not afraid to tell the truth and doesn’t try to hide it under “nice.”

    Moyers
    notes that, like the run-up to Iraq, intelligence leading to the Gulf
    of Tonkin Resolution (that opened the way to massive escalation of the
    Vietnam war) was faked–but not, he said, with LBJ’s knowledge. Moyers
    was working in the White House at the time.

    But then he looks at
    the Bush II administration’s penchant for secrecy, for deception, for
    rewarding its corporate cronies–and for interfering with the few
    remaining institutions in journalism that have any backbone left–and
    the results aren’t pretty.

    Ethics in both business and government is crucial–and achievable. Visit Shel’s site, https://www.principledprofit.com, to learn more.

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    By Posted on Posted in Business Ethics, General Commentary, Media Ethics

    If I’m a tad schizophrenic in my feelings toward search engine
    giant Google, it’s because the company sometimes seems like a
    many-headed hydra whose various heads have no clue what the others are
    up to.

    On the positive side: Google last October announced a wonderful plan
    to donate one percent of its stock value–just a whisker under a cool
    billion at the time of the announcement–to various change-the-world
    charities    –and to donate various other streams that push the total value well above that amazing $1 billion mark.

    This
    is wonderful! It makes sense both to advance founders Larry Page and
    Sergey Brin’s vision of the kind of world they want to live in, and to
    advance Google’s corporate goals of continued market dominance. (One of
    the initiatives, for example, is to help MIT develop $100 computers.
    Guess how they’ll link to the world?).

    Also on the positive side
    is Google’s ability to create a powerfully positive user experience.
    How did I find the above article? I received a Google News alert by
    e-mail for ethical business, that linked to a blog post by Joseph Newhard.
    After reading the article, which was more commentary than news, I
    wanted a more authoritative source to quote from, so I typed the
    following string into Google

    google “$1 billion” healthcare

    About three seconds later, I had the San Francisco Chronicle article I referenced earlier.

    Oh
    yes, and I’m typing this on a Blogger blog, owned by Google. If you’re
    reading it on my own site, I use Word Press for the mirror blog. And I
    switched my site-specific search engines to Google a couple of years
    ago, because it didn’t need me to tell it each time I added content.
    Though I’d love to see them add the feature of searching a few sites at
    once under common ownership that my old, clunky search engine offered.

    And
    I think it’s fabulous that Google now has a share value of $100 billion
    and profits of $968 million–because those profits are built on doing a
    lot of things right–first of all, creating a search engine that gives
    the right results if you know what to ask for, and gives them
    instantly. Second, not bothering with a revenue model until “usership”
    had built up. And thirdly, introducing its primary revenue model–a
    modification of the old failed model of web ads–as the brilliantly
    successful low-key, non-intrusive contextual advertising, with millions
    of partner websites who are benefiting from Google’ success. Obviously,
    it works.

    But then there are those other heads: Google
    Book, for instance, *almost* works. The ability to search books’
    complete text is great. The it’s-a-big-pie model that shares revenue
    with publishers by directing purchasers to publisher websites to buy
    the book is great. But what’s not great–and the Authors Guild is suing
    over it–i that Google insists it has the right to take books into the
    program without consent of the copyright holder.

    If there is
    any justice in the courts, Google will lose this case–and it will be a
    big, expensive mess. Just as an example–I’m delighted to have the text
    of my most recent book, Principled Profit: Marketing That Puts People
    First, in the program; I think that can only help sales. But I have
    deliberately refused to put in my older e-book, The Penny-Pinching
    Hedonist: How to Live Like Royalty with a Peasant’s Pocketbook–because
    with that book, appealing to a self-defined frugal audience, it’s much
    more likely that a searcher would find the specific piece of
    information wanted and feel no need to then spend $8.50 to own the
    content. For authors of cookbooks, reference manuals, travel
    guidebooks, etc., involuntary participation in the program could be a
    disaster. Google could, I think, easily develop a form to submit to
    publishers enabling them to quickly import their entire catalog and
    check yes or no for the program. By saying “we have the right unless
    you opt out,” they’re acting like spammers, violating copyrights
    unnecessarily, and depriving publishers of the right to make decisions
    about how their copyright-protected material is used.

    And then there are some serious concerns about privacy. See for instance “Google as Big Brother” on the Google-watch site (scroll down to “Google’s immortal cookie”). If you want to find more, here’s Google’s own results page on a search for google privacy. Stories on Wired and elsewhere raise cause for alarm.

    Of
    course, Google isn’t the only company to be a bit erratic in its
    ethics. I could have easily written a similar article about Microsoft,
    or Ford, for instance.

    But Google does so much that’s right–I
    just have to wonder about their blinders on the copyright fronts, and
    take a watch-and-wait attitude on the privacy front.

    Shel Horowitz’s Business Ethics Pledge campaign
    seeks to create a climate where future Enron/WorldCom scandals will be
    impossible. He’s the author of the Apex Award winner, Principled
    Profit: Marketing That Puts People First and five other books.

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    By Posted on Posted in General Commentary

    According to the NY Daily News, military contractor David H. Brooks just spent–are you sitting down–ten million dollars on his daughter’s Bat Mitzvah! Brooks says the figures are exaggerated, but he doesn’t deny that it involved private jets, multiple performances by rock superstars, and a very expensive swanky New York venue.

    A Bat Mitzvah is a religious coming-of-age ceremony. A teenager (usually–I’ve been to the Bat Mitzvah of a woman in her 70s) leads a section of the prayer service, reads from the Torah (the five original books of the Bible) and chants a Haftorah (a section from one of the later Old Testament books such as the Prophets). Usually there’s a party afterward. It should not be about ostentatious displays of wealth and one-upping your neighbors.

    With several hundred people attending, renting one venue for the ceremony/reception and another to prepare the food (an elaborate full luncheon), hiring a couple of workers, my daughter and two friends became Bat Mitzvah a couple of years ago. If memory serves me correctly, this whole event cost around $1800, or $600 for each participating family. And it was a great event–I daresay probably a good deal more spiritually meaningful than this obscene $10 million blowout. I can only imagine what her wedding will be like. Maybe Dennis Kozlowski, disgraced CEO of Tyco known for his lavish parties, will do the catering.

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    By Posted on Posted in Business Ethics, General Commentary, Marketing Trends/News

    Just back from several days in Minneapolis, and I had my trend-spotting radar up. Some observations:

    1. The airline industry continues to shift.

    We flew ATA and Southwest, and it was illuminating to contrast them. Southwest still very much encourages the nonconformists and humorists among its staff, and continues to do very well with on-time performance, full or nearly-full planes, and other metrics. And they continue to make things nicer for their customers. For instance, online check-in is a big improvement over the cattle-herd system of the old days, and printing your boarding group right on the boarding card is much better than the old plastic passes. Maybe it was my imagination, but it seemed to me there’s a bit more leg room than there used to be. And on today’s flight home, they even gave us each a square of chocolate!

    Lessons for other companies: give your people room to shine and they will. Fill a market niche, and you’ll be profitable. Be nice to your customers, and they will return. Do all three things right and you’re a rare success in a troubled industry.

    ATA, by comparison, was not a pleasant experience. The seats are jammed together to the point where, even at only 5’7″, I was extremely grateful to have an aisle seat so I had someplace to put my feet. (My wife flew Northwest recently, and said the legroom is even worse there.) On the way there, we discovered that the airline had never entered a change in our itinerary and had us flying the previous day. Luckily, we had a paper trail and there were still enough seats. Yet, even though I watched the ticket agent enter the correct information for our return trip, it seemed the check-in agent on the flight home had some difficulty getting the reservation to show up appropriately. And other little things–no sparkling mineral water or seltzer, only club soda (which has salt, on top of all the salt in the pretzels). And big things: ATA had over two hours to get our luggage to Southwest during our Chicago transfer; not one of our four bags made it on the plane, and neither did the bag of another passenger with the same itinerary. None of this was life-threatening, and most of it is a pretty small inconvenience–but it added up to somewhat negative experience that is likely to influence future purchase decisions. Oh yes, and the reason we were on Southwest in the first place is that ATA suddenly pulled out of our market long after we’d booked our flight. (Southwest doesn’t fly to Minneapolis.)

    Lesson: No matter how good your advertising, your brand is built on positive and negative customer experiences.

    (Disclosure: I was a fan of Southwest long before this happened, but I should point out that the company bought 1000 copies of Principled Profit: Marketing That Puts People First, prepublication. If that colors your view of my comments, so be it.)

    2. A Discounter Goes Upscale

    Southwest again. The airline’s Unique Selling Proposition has always been the combination of low prices, reliability, and superior service. Perhaps it’s the service aspect that’s helping Southwest Spirit, the inflight mag, to go after a very upscale advertiser profile. The pages are filled with ads for expensive high-rise housing, Las Vegas casinos, glitzy restaurants, expensive gizmos…and there are a lot of ads!

    This could mean several things:

    • High-end consumers are putting greater value on low prices
    • Southwest’s superior experience means non-price-conscious consumers are seeking them out because they want to get there on time and be entertained
    • The airline may be experimenting with moving away from that USP, and higher prices may be on the way (though I suspect they wouldn’t be quick to throw away 30 years of loyalty built in large measure by affordability)

    I’ll try to do Part II tomorrow

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    By Posted on Posted in Business Ethics, General Commentary

    Something most of the corporate scandals have in common over the past few years: those with their hands in the cookie jar already were receiving compensation that most of us would consider wildly excessive.

    For a number of years, some companies have established maximum earnings for top execs as a multiple of the earnings of the company’s lowest- paid employees. So if the multiple were, say, 50 times, and the lowest paid worker made $15,000, CEO pay would be capped at $750,000. If the CEO wanted higher pay, that $15,000 a year worker would get an increase as well.

    But we see CEOs with compensation in the hundreds of millions. Often the crooked ones. The Wall Street Journal reported that Enron Chairman and Chief Executive Kenneth Lay was paid $67.4 million in the year immediately prior to the company’s bankruptcy filing. That same year, according to the American Institute of Certified Public Accountants, Tyco’s Dennis Kozlowski received $125.3 million in total compensation. And you can bet that the lowest paid workers at Tyco got nowhere near 1/50th of that.

    Yet these outrageous figures weren’t enough to keep them from stealing? How much money does any single person really need to live on?

    A very interesting solution was proposed in this report of the Center for Corporate Policy; I like it because it relies on tax law, rather than coercion, to enforce the cap:

    Cap CEO pay through a maximum wage. This can be done by eliminating tax deductions for executive compensation above a certain amount — e.g. above 25 times that of the lowest-paid employee, a standard originally proposed by management guru Peter Drucker. Rep. Martin Sabo (D-Minn.) has included this proposed standard in “The Income Equity Act of 2003” which would eliminate all tax deductions for compensation above 25 times that received by the lowest paid worker in the corporation.

    Another law, proposed by Rep. Barney Frank of Massachusetts, would initiate strict disclosure rules for CEO compensation, making the packages subject to investor scrutiny for the first time.

    These are both positive steps. And long overdue.

    There will be a consumer rebellion if steps are not taken to curb these excesses.

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    By Posted on Posted in Business Ethics, General Commentary

    Let me get this straight right at the beginning: I believe in capitalism. In fact, I write books teaching people how to be better and more successful/ethical capitalists, like my award-winning most recent book, Principled Profit: Marketing That Puts People First.

    But my sense of justice is deeply affronted by this week’s news. The Washington Post story says, in part,

    High prices for crude oil, gasoline and natural gas helped Exxon Mobil Corp. to its highest-ever quarterly profit, $9.92 billion, up 75 percent from the third quarter last year, the company said yesterday.

    Profit in the third quarter at the world’s largest publicly traded oil company set an industry record, and its sales of $100.72 billion were the highest in a quarter by U.S. company, according to Standard & Poor’s.
    Exxon Mobil’s third-quarter profit, $9.92 billion, was the highest the oil company had ever recorded.

    Analysis
    Oil Industry Seeks to Cast Huge Profits as No Big Deal
    By most familiar comparisons, the $9.92 billion profit earned by Exxon Mobil Corp. in just three months is almost unimaginable. It would cover all Social Security benefit payments for three months. It would pay for an Ivy League education for about 60,000 kids. It would pay the average list price…

    Other oil companies have reported soaring third-quarter profits this week. Royal Dutch Shell PLC, based in the Hague, said yesterday that its third-quarter profit was not far behind Exxon Mobil’s: $9.03 billion, up 68 percent. London-based BP PLC reported profit of $6.53 billion, up 34 percent.

    (If that link goes dead, or you want other perspectives, here’s a link to a whole bunch of other stories on the same theme. That includes the YahooNews story that says Exxon Mobil “rewrote the corporate record books.)

    There’s nothing wrong with profit in and of itself. But could this obscene 75 percent profit possibly have something to do with increases of up to a dollar a gallon at the pump in the immediate aftermath of Katrina, which followed closely on a wave of increases that added about 40 cents a gallon even before Katrina hit? Bodies were floating through the streets of New Orleans, tens of thousands were made homeless, and meanwhile, oil company profits–not revenues, but merely the money left over in these three months after the costs of operations–$25.5 billion just from the three largest profiteers–is equal to or exceeds the entire yearly economic output of any of the world’s poorest 159 countries, from Jordan on down.

    While I’m fully convinced that “peak oil”–the idea that the easy-to-get stuff is gone, and that the cost of oil extraction will continue to rise rapidly as supplies diminish, and that we had darned well better get off the petroleum economy–is a reality, this is price gouging, clear and simple. I don’t have enormous sympathy for the single occupant of a mammoth and usually unnecessary SUV, croaking out all of 9.6 miles per gallon in the case of a Hummer S2, but I do feel sorry for the working stiff who bought an appropriate vehicle and watched fuel costs double. And then, factor in home heating costs, which are a big factor here in the Northeast–or cooling costs elsewhere. It ain’t pretty.

    Surely the time has come to make a commitment, as a society, to nonpolluting, nondepletable, environmentally friendly ways of powering our economy. The technologies–solar, wind, small-scale hydro, and others–have been around for decades and continue to improve. Let’s leave the profiteers out of the loop.

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