The Golden Rule of Business and Ethics (and Life)

I was speaking with my kids the other day about how easy it is to be a “good” person and I realized that one simple (and well known) rule is really the key to doing the right thing. That “right thing” applies in business, ethics, and pretty much anywhere else in your life where you need a guidepost. For this business-oriented post, I’ll call it The Golden Rule of Business. But there is a reason it is more commonly known as just “the golden rule”.

Do to others whatever you would like them to do to you. This is the essence of all that is taught in the law and the prophets. -Matthew 7:12

Depending on your religion and culture, you most certainly learned a version of this verse at some point. This message is found in early Egyptian writings as early as 2000 BC, and it exists in every culture. It is the “golden rule” or the “law of reciprocity” and it is a cultural norm throughout the world.

The Golden Rule of Business is Simplicity

The simplicity of the rule is where it’s power comes from, and it can provide us guidance in almost everything we do. In fact, the simplicity of the rule allows us to use it for every hard ethical decision we make. If it doesn’t apply, then it probably isn’t a big ethical or personal decision. (ie. Would you like fries with that?). While I was talking with my kids it became apparent to me that this was the only rule that needed to appear in the bible. We didn’t need the Ten Commandments. We didn’t need the countless other guideposts which can easily be misinterpreted or misused to support negative agendas. The golden rule is so simple that it can’t be misinterpreted. Do unto others as you would like them to do unto you.

Think of all of the courses taught today on business ethics. Every university and college offers some version of it for business students both at an undergrad and graduate level. Somehow there is a more advanced version of ethics that we need to learn when we do our MBA that we didn’t learn in undergraduate school? But is there really an “advanced” version of ethics? I think the simplest way to look at things is best. There is one simple rule to business and ethics. The Golden Rule of Business.

Why Is It So Hard?

So if being a “good person” and remaining ethical is as simple as following the golden rule, then why do so many people struggle with it? Why did Enron happen? Why did Bernie Madoff choose to operate a Ponzi scheme? Why did Volkswagen deliberately design vehicles that hid their pollution when tested? I think there are several reasons that drive these bad choices, but one of them is the complexity we have created around the concept of ethics.

Certainly, it is true that there are just “bad people” in the world who make their decisions out of self-interest and greed. Bernie Madoff wasn’t confused by the complexity of ethics when he decided to dupe people out of their hard-earned money to profit for himself. He was greedy. He didn’t care about the ethics of it. But if you look at the stories and the people behind the scandals at Enron, Arthur Andersen, Volkswagen, and many more, the story is less clear. There were greedy people involved in each of those scandals, but it took hundreds of people to create the scandal. Most of those people were “good people” doing what they thought was right.

Complexity

In some cases the problem in following the Golden Rule of Business is complexity. We have created so many variations of the rules in our ethics classes that it becomes hard to decide which to apply. In the confusion, it becomes possible to justify a bad decision as doing the right thing. Consider the Nike sweatshop scandal as a case study. Nike employees, likely on the advice of their MBA ethics classes, recognized that there were differences in the cultural and societal norms between the United States and Indonesia. Based on those differences in expected pay, working conditions, and business practices, they were comfortable with “turning a blind eye” to situations that would have been unacceptable at home.

What started with a discussion on lower pay rates which were justified given the cost of living and economy of the local area, slowly extended to detestable working conditions which could be painted with the same brush. We are taught in MBA ethics class how to think about these cultural differences and given a complex framework for how to weave ethics into a global economy. And then we graduate and all we remember is how complex it was.

If we taught only one rule, the golden rule, this would be much simpler.

• What should wages be in a global manufacturing plant? They should be similar to the overall wages in the local economy because that’s what I would expect to earn and need to live if I were working and living there.
• Should we demand air that is as clean as outside the facility for our workers? Yes of course, because I wouldn’t accept anything less for myself. I don’t need to purify the air to a level that exceeds the local region, but I do need to at least ensure that I am not causing more damage to the lungs and health of my employees than if they didn’t work for me.
• Should I expect that my factories are physically maintained to prevent collapse or machine malfunction? Definitely! I expect to be safe when I go to work, so why shouldn’t my employees enjoy that same safety?

When we simplify the rule, the answers aren’t hard.

Management Pressure (or the “I’m just doing my job” syndrome)

Often people at lower levels of an organization “hide” from the ethical decisions of their work by “just doing their job”. If you are told to design a catalytic converter that detects when it is being e-tested, and which will reduce the pollutants in that scenario vs normal driving behaviour, it is possible to pretend there isn’t an ethical decision being made when you follow out your orders.

But we can’t be “good people” through ignorance. The engineer tasked with designing the system that resulted in 11 million vehicles being recalled and largely destroyed was aware that he was designing a solution to skirt the laws. He or she chose to be ignorant to the facts because it was a management order.

You can choose a ready guide
In some celestial voice
If you choose not to decide
You still have made a choice
(Rush, Freewill)

As Rush so aptly points out in their song Freewill, by choosing not to do or say anything, we are still making a choice. We all have the right to choose. We can speak up in our workplace when we see something that isn’t right. We can choose to decline a task which we believe is unethical and articulate our concerns. We can choose to leave a job and company that is not behaving in alignment with the golden rule of business rather than ignoring it through feigned ignorance.

It’s not easy. But it is a choice.

A Call To Arms on The Golden Rule of Business

I believe that ethics are simple. Being a good person in business is simple. Leading an organization that leaves a positive impression on everyone and everything it touches is simple. It is as simple as the Golden Rule. It is up to the leaders to make it that simple and embed it into the culture and norms of their organization.

It is up to you, leaders, to make ethics easy again.

It is up to you, leaders, to work and live according to the golden rule.

Use only one guidepost to make your big ethical decisions.

Use the Golden Rule of Business.