Our Moral Obligation Back

I wrote my undergraduate Philosophy thesis on a theory in Ethics called Consequentialism. It argues that “it is the consequences of one’s decisions and actions that ultimately determine the rightness or wrongness of those decisions and actions”. This is often, more commonly and way-too-simplistically, translated into the end justifies the means. But does it? And does it always, or is it limited to just sometimes?

The dilemma I explored in my thesis was Truman’s decision to drop an atomic bomb on Hiroshima. We all know “why” he did it: to more quickly end WWII. But, obviously, the hang-up lies in the consequences to others that emerged from him achieving his goal.

Over the years in my career, I have worked on a variety of projects that have involved companies with long-time employees, many of whom had worked at their respective company for 15 or more years. In the spirit of David Upton and Stephen Macadam’s 1997 HBR article, Why (and How) To Take A Plant Tour, it could be argued that these workers are a valuable asset: they know how things work, they’ve perfected their techniques, and they’re a wealth of information and insight. Company owners and CEOs often take a lot of pride in being able to say that x percent of company’s workforce has worked here for x number of years. This statistic is meant to be a testament to the strength of the company’s culture, the good management skills of the owners and/or executive team, the loyalty of employees, and the simple fact that they like working at the company. For those of us that grew up in a family business, it is often the case that these long-term, loyal employees taught us the way things work when we were young teens working during summer breaks in the company.

These employees are the backbone of a company. Their jobs are often mundane, repetitive from day-to-day, and often don’t require a college degree. Even new employees coming into these jobs don’t usually have college degrees. These days, English is often their second language, some are single moms, some are middle-aged, some have family members also working at the company, and some are the breadwinners of their families. Many are paid at or just slightly above minimum wage. They are factory workers, clerical staff, warehouse personnel, maintenance crews, receptionists, cashiers, customer service reps, and cleaning crews. They’re usually on the receiving end of instructions and work priorities for any given day.

And that’s okay with them. For the most part, these are just people needing the jobs they have, enjoying the work they do, attempting to do a good job, and hoping their kids can achieve more in life. They don’t often have lofty career goals. They simply trust that those running the company (owners and/or executives) know what they’re doing and are themselves, doing a good job. These employees want to be led well by the people in charge and not have their time and energies wasted. They expect (and want to believe) that their work matters; that it is helping the company be successful and thus, they are generating the financial results from which they’ll receive their salaries, their 401k matching, and their health benefits.

Let me say this again: “They simply want to be led well, and to believe that ‘the people in charge’ know what they’re doing and are doing it well”.

I got called into a project a few years ago where a company had just experienced an EBITA loss of $2.5MM at the conclusion of its recent fiscal year and was in need of some help. This was a very busy company. Its Supply Chain function (Purchasing, Warehousing, and Shipping) was working like crazy to keep up with seasonal demand to keep customers in stock. Executives were working 14-hour days, warehouse personnel were working overtime and raw materials were being air-freighted in at considerable expense. In the midst of all of this hustle and bustle, I come to find out that the company was occasionally giving away its products for free to one of its largest customers. The company’s service level (the percent of an order shipped) to this customer had been so low throughout the year that the seasonal products would be arriving late to the customer and thus, force the customer to miss a portion of the usual uptick in sales. The customer was beyond upset and the only solution the company could come up with to keep the customer was to give all of its seasonal products to the customer for free as a mea culpa.

Clearly, there needed to be a major overhaul of the Supply Chain function. The entire process needed to be reviewed: the drivers of, and the factors impacting, forecasts, new disciplines needed to be adopted, and personnel needed to be evaluated for their potential to perform at a higher level of capability. Because again, clearly, the company had just wasted its blood and treasure…the time and energies of its employees, and its money in the form of air-freighting and overtime expenses due to how poorly its Supply Chain function had performed in its planning. The output of employee labor had been given away not just freely but ultimately at a loss to the company.

Remember what I said earlier:  “They simply want to be led well, and to believe that ‘the people in charge’ know what they’re doing and are doing it well”.

What do you think these employees would have said if they knew that all of their overtime, all of their hustle and bustle, had gone to no contribution to their incomes? “But wait”, you say in your defense, “We ultimately saved their jobs because if we had lost this customer, surely there would have been layoffs”!

And their response: “But, why did things have to come to this point? Where was the leadership and the competency of ‘the people in charge’ early enough to prevent the company from getting into this dilemma in the first place”?

This is a particularly poignant question when you consider that this isn’t the first time the company has found itself in this situation; it experiences significant supply chain issues almost every year. The company leadership had been aware that it had a problem but had been unwilling and unable to look deep inside itself, to ask the tough questions, to force itself to answer those tough questions, and ultimately to accept that it would have to change the Supply Chain function process and perhaps, personnel. It chose instead to allow a broken system to continue to operate and thus, play Russian Roulette with the livelihoods of its employees. The company leadership chose (decided) to remain comfortable: to not rock-the-boat, to not challenge the Supply Chain function, to not risk hurting peoples’ feelings to avoid the disharmony associated with change. This decision, for this company, on this issue, was a strategic choice made repeatedly over several years, away from the benefit of the whole for the comfort of the few. Behaving in this fashion is an abdication of the moral obligation that ownership/leadership has to lead well and do your job well for the sake of the employees of the company who depend on you and can’t do those two things for you.

Being comfortable can exist in many shapes, sizes and colors.

  • Keeping unproductive and costly legacy business relationships
  • Being dismissive of all things new that challenge the status quo
  • An unwillingness to change out Pete Principled-managers for more capable ones
  • Leadership’s unwillingness to change its own management practices and leadership style
  • The inability to maintain consistent pressure on challenging the organization to be better
  • An unwillingness to weed out long-time employees with toxic personalities or with mini-fiefdoms
  • Leadership’s unwillingness to withstand the temporary disharmony/upset associated with change

We business leaders have a moral obligation to make the best decision possible, regardless of how difficult they might be or how uncomfortable they make us feel. We have a moral obligation to provide for the profitable growth of the company and thus, its successful continuity. Why?

Because of the consequences to others.