Ethics and 4 Way Test – more applicable that ever

small 4wt
First posted Sept 24 on LinkedIn

Well, the CEO of VW resigned. It’s a start. I assume the head of the American division, Michael Horn is next. And it looks like the former President of Peanut Corp of America will stay in prison for the rest if his life. (Hopefully!) He is 61 and received a 28 year sentence. Misdirection, lying and covering up just to improve the bottom line, wow. I would expect their mother’s would have raised them better.

Simple common ethics should be standard operation procedure in the business world and, yes, simple common ethics can lead to profitability. It saved Herbert J Taylor’s business during one of the ugliest economic times in 1932.

Short version of this great story is Herbert quit a very good job, took an 80% pay cut to join and kept the Club Aluminum Company from going bankrupt. His secret was institutionalizing what we, as Rotarians, call the 4 Way Test. In his words:

“To win our way out of this situation, I reasoned we must be morally and ethically strong….I felt that if we could get our employees to think right they world do right. We needed some sort of ethical yardstick that everybody in the company could memorize and apply to what we thought, said and did in our relations to others.

So one morning I leaned over my desk, rested my head in my hands. In a few moments, I reached for a white paper card and wrote down that which had come to me – in twenty-four words.” 83 years later, most every Rotarian in the world can repeat it:

Is it the TRUTH?
Is it FAIR to all concerned?
Will it be BENIFICIAL to all concerned?

It worked even during the Great Depression. This approach brought them out of the ‘red’ in 5 years. These simple rules also work today regardless of your religious beliefs and even if you do not have religious beliefs.

I firmly believe this is the glue which has kept Rotary strong and relevant for the past 110 years. Personally, I can attest it has help make me a better man and better businessman.

I wonder: How would I send a copy of the 4 Way Test the new leaders of the VW and the Peanut Company. It definitely would be FAIR to all concerned.