Nothing is as valuable as reputation. And yet we see corporate reputations squandered daily. In truth, most companies and people spend every day trying to do the right thing and protect their reputation. Very few set out to do anything less. So how does it happen?

The Complexity of Cognitive Dissidence

Reputation can become damaged in a variety of ways, but mostly, a little bit at a time. I call it the “Paper Clip Slip.” Anyone who hasn’t walked off with a company-owned paper clip hasn’t ever worked with paper clips. The problem comes when the theft grows to a box of paper clips, or pencils or something else.

The process we use to justify this petty larceny is called Cognitive Dissidence. It’s a very valuable human trait that we would be whimpering wrecks without.

After we choose between the alternatives, we need to move on. We all know people who agonize over every choice and are filled with doubts, sometimes for days. Cognitive Dissidence is the mental function that tells us we made the right choice and lets us become more convinced every hour that other options would not have been as good.

The problem comes when we have too much of this trait. We begin to justify our actions no matter how outrageous. Actually, excessive Cognitive Dissidence is often admired in the C-Suite.

A decisive executive can be a real asset to any organization. However, the same strong leader can steer the ship into treacherous waters, sure they are on course to success. When things don’t look too good, it is easy for them to justify actions that threaten the reputation of the company. And when it goes sour they say, “I did what I had to do.”

The “Do What It Takes” Mentality

Others come into corporate life with a distorted view of what needs to be done. They believe you have to do what it takes to win in a dog-eat-dog climate.

Where do these people—some of the best and brightest youngsters—get this idea? That’s easy! Good news is not news, so almost everything they see and hear in the media involves the baddies. And it’s not just the news media. Books, movies, TV shows—it’s all about the interesting nasty stuff, in business and in life.

Putting Stakeholders First

Doing the right thing is not always easy. Sometimes it’s not even clear what the right thing is to do. We face hard choices everyday. What is clear: an ethical business model is the best choice.

Research shows that companies that put the best interest of their stakeholders first—customers, employees, suppliers, communities, environment, and finally, shareholders and lenders—win in every way.

Why put shareholders last? Because if you take care of the others, profits will take care of themselves.

Do ethics driven businesses always win? Of course not. But if all things are equal, these companies will do better every time. And they are a lot more fun to work for, and a lot more fun to run.

Bill can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it. . This article appeared in Impact Analysis, November-December 2008.
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W.T.
About The Author W.T. "Bill" McKibben
W.T. “Bill” McKibben is Senior Counsel, Ethics Practice, The Great Lakes Group. His book, Play Nice, Make Money, makes the case for the ethical business model as the surest path to profitability.




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