“Do the right thing. It will gratify some people and astonish the rest.” – Mark Twain
Passion, focus, and relentless tenacity—table stakes for achieving any revenue goal. “Team! Let’s take that mountain!” At this point, things get complicated. For some organizations, doing the right thing doesn’t have a fitful place in the tactical mix. “Ethics? What’s that?” A few enterprises, like these award winners, lose their way. Others discover that the scramble toward the revenue summit traverses a slippery ethical slope.
Candidate companies for my 2013 Sales Ethics Hall of Shame had to clear three exacting hurdles. First, the primary purpose of the enterprise couldn’t be illegal, like human trafficking or selling crystal meth. Second, more than one employee had to be involved in unethical activity. And third, any chicanery had to be repeatable and scalable—in other words, embedded in the company’s business process.
The 2013 winners passed another demanding threshold, one that no formulaic analysis can expose. The company’s practices had to bury the ethics needle all the way into Eeeeeeewwwwwwwwwwww!, and keep it there. Not easy to do, but as you’ll read in these vignettes, these four inductees have what it takes—and more.
Dun & Bradstreet Credibility Corporation. First, needlessly frighten prospects. Then, close! Close! Close! Imagine you’re sitting at your desk and the phone rings. You answer, and the caller from Dun & Bradstreet Credibility tells you that your company’s credit status has changed to “high risk,” and that your poor credit score could deter lenders, suppliers, and clients. The salesperson pitches you to buy a credit-management service, CreditBuilder, from his company to rectify the problem. What do you do? Until the call, you had no idea.
According to a June, 2013 Wall Street Journal article, Krista Bradford, owner of a small company, The Good Search LLC, spent almost $1,000 on the service, but now believes she was misled. Her “excellent and extensive” credit was always paid on time, and once she signed up for CreditBuilder, her credit rating changed, “as if someone had simply flipped a switch,” she said in an interview.
She’s not alone. More than a dozen other business owners revealed to The Wall Street Journal that they had been misled by the same pitch. “These business owners raised questions about whether Dun & Bradstreet Credibility, a three-year-old company . . . is unfairly preying on their anxieties, in order to sell its credit-management program. Credibility’s sales pitch is particularly worrisome, some say, because of its close relationship with its former parent, Dun & Bradstreet Corp.” A former company employee shared that the telesales script provided to staff prompted them to say that based on a lack of credit information for the prospect, “it looks like you may be a failing business,” and then to recommend CreditBuilder as a solution.
Pilot Flying J. When customer rebates are withheld, profits and sales commissions grow. After the FBI raided Pilot Flying J’s Knoxville, Tennessee corporate headquarters in April, 2013, their investigation produced an affidavit that asserted Pilot employees discussed “a new internal Pilot two-tiered pricing structure that would impose higher prices on less sophisticated customers.” The FBI’s 120-page affidavit was “filled with detailed allegations of how Pilot’s sales team deliberately withheld rebates to boost profits and sales commissions,” according to a Wall Street Journal article, Pilot Truck-Stop Chief Pleads: Don’t Sue Us.
Pilot CEO Jimmy Haslam III, who also owns the Cleveland Browns football team, pleaded ignorance, saying he didn’t know about the internal practices that led to the FBI’s fraud investigation. “I was absolutely not aware of any of this,” he said. The FBI alleges that 250 of Pilot’s 5,000 customers were not reimbursed for earned rebates. Now Mr. Haslam acknowledges that his biggest job is rebuilding customer trust. “We hope you’ll continue to do business with us,” he told an audience of mainly trucker customers. “I hope you’ll give us a second chance.”
US Coachways – If your customers consistently berate your service, you can always get a good online review from your employees, friends, and probably your mom—if you ask nicely. US Coachways operates a charter bus service in New York State. But if you want to hire the company to provide transportation for your group, you might have second thoughts. “This company basically ruined what was otherwise a great trip,” wrote one reviewer, who was quoted in a New York Times article last month. The article continues, “Currently, the company has fourteen reviews averaging one star. It is not possible to get much lower than this.”
Sensing the revenue at risk from these negative reviews, Edward Telmany, the company’s CEO, took matters into his own hands. “We get bashed online,” he wrote to his employees in 2011. “We are loosing [sic] money from this.” But instead of improving service, Telmany’s solution was to hire writers to post fake reviews. He even required his employees to post comments on Yelp. One review gave a five-star rating that began, “US Coachways does a great job!” The “reviewer”? Edward Telmany. According to the Times article, “the company agreed to pay $75,000 in fines and stop writing fake reviews.”
Star Scientific. When you don’t have a GL account called Favors to Politicians, just put the expenses in Sales, General, and Administrative. Jonnie Williams, CEO of Star Scientific Inc., a Virginia-based nutritional supplements manufacturer, “contributed $108,448 in corporate jet travel to [Virginia governor Bob] McDonnell’s gubernatorial campaign and political action committee. Williams became even more generous with personal gifts or loans to the McDonnell family that topped $145,000, including five-figure checks to two daughters for their weddings and a $6,500 Rolex watch engraved for the “71st Governor of Virginia,” according to an article in the Richmond Times Dispatch. When the governor’s wife, Maureen McDonnell, flew to New York City to do some shopping, she picked up a $10,000 suede jacket, two pairs of designer shoes, a Louis Vuitton leather handbag, and a designer dress—all on Williams’ tab.
“I admire people who are entrepreneurial, who are finding ways to create opportunities in Virginia . . .” McDonnell said of Williams at the height of their bromance. But Williams’ largesse didn’t come purely from generosity. The Richmond Times Dispatch article reported that “Star Scientific representatives were lobbying senior McDonnell administration officials to include the company’s anti-inflammatory supplement, Anatabloc, in every state employee’s basic health benefits package. The request was denied, and a review by Democratic former Attorney General Anthony Troy found no evidence that either Williams or the company received any benefit, appointment, or other special treatment from state government during McDonnell’s term.”
Still, that leaves people pondering the business relationship—or friendship, if you work in the governor’s office—that has spawned a federal criminal investigation. This past July, McDonnell publicly apologized for accepting gifts from Williams. Once a possible Republican presidential contender, McDonnell has fallen from grace. Rich Galen, a McDonnell spokesman, is bitter. “Apparently, the US government has given Star Scientific a free pass for unspecified misdeeds in return for the testimony of Jonnie Williams.”
“Be a trusted advisor!” “Deliver outstanding customer experience!” “Sales is all about providing value and exceeding customer expectations!”—customer-centric bromides that rattle around the blogosphere. But to a shady executive, they are utterly meaningless. So while most everyone nods and agrees that bad ethics are bad for business, Twain’s point still hits home.
I wonder which companies will be inducted in 2014?