Business Ethics Run Amuck

You probably heard about the following stories in the news this past week:

Equifax announced a cybersecurity breach of information providing hackers with everything they need to assume a person’s identity: social security number, address, birth date, address, full name, etc. This was announced some 6 weeks after the last intrusion in July; the breach started in May. Equifax claims 143 million people are affected. And, here’s the icing on the cake:

• If you go to Equifax’s website to find out if you’ve been hacked, you have to accept that you are automatically opting out of suing them via an individual suit or a class action lawsuit
• 3 top executives sold Equifax stock 3 days after learning about the breach. This is insider trading–it’s illegal. Note: Experian stock was down 13% the day they announced this problem on September 8, 2017.

The FDA reports that EpiPen had bad batches with ineffective auto-injectors that resulted in the drug not being injected into patients causing deaths and needless harm to certain patients. The company is Mylan (owned by Pfizer} and they issued no recalls. This is the same Mylan that in recent years increased the cost of the EpiPens by 400%.

These companies are so ethically-challenged that they cannot “do the right thing” in a timely manner. Executives at both companies need jail time.

The Federal Trade Commission is looking into the issue at Experian; the Food and Drug Administration (FDA) is looking into the EpiPen debacle.

Is there a lesson here? Yes. Leadership is responsible for protecting the brand value. Big mistakes require swift action. If an issue is handled with speed and integrity, customers will appreciate that. If an issue is handled with delay and obfuscation, it can destroy a brand not to mention potential legal penalties. Let me give you an example:

The president of Bike Friday contacted me after reading my book about mass customization. I looked at his web site. The web site mentioned a recall on certain bike configurations for a potential issue that could cause harm to the rider. The web site told the customers what they needed to do to initiate corrective action. Customers were also notified by mail. Bike Friday paid all of the costs for this potential problem. I knew when I saw this, this was a company I wanted to work with. Why? Bike Friday demonstrated a lot of integrity by the way they handled this.

What do you want to be known for? What do you want your customer’s experience to be?

Thought for the week:

“A man without ethics is a wild beast loosed upon this world.” – Albert Camus