Tuesday, July 29, 2008

Keeping Your Ethics Afloat For The Next Generation

Watching and hearing about my parents’ business experiences in Korea provided me with an excellent base of knowledge and expectations when I moved there in 2000 to start HeyAnita Korea, a joint venture between HeyAnita and Softbank.

Early on, I had a discussion with my friends and co-founders, Jimmy and Peter — Jimmy and I were the two on the team who had an explicit biblical worldview — in which we agreed we would hold to our principles and not conduct business in the manner that many people do within our space. Our company was a voice technology platform that depended on working relationships with South Korea’s telecommunication giants and government entities. Closing deals with people from these entities typically involved drinking with them in room salons, establishments similar to Japan’s geisha houses where most are not places of prostitution but drinking establishments.

Jimmy, Peter and I determined that it wasn’t practical for a startup to conduct business in this manner and we wanted to hold to our ethical principles. This caused some dismay among our employees, but we were happy and comfortable with our decision. I suppose it was a blessing that we were perceived as executives from the U.S. extending a U.S. company to Korea because this allowed people to more easily accept our scruples about providing money under the table or taking them drinking to room salons. Jimmy’s disarming personality certainly helped. I think his contagious laugh and engaging conversational skills could calm a raging grizzly. In any event, we found these primarily elder company representatives willing to back off from their typical expectations.

To be honest, there were rare situations in which we reluctantly agreed for some of our managers to take a customer drinking to close a big deal. We didn’t like it but we decided it was a reality we had to face. While it might seem silly to most people, we actually had executive meetings on these decisions. We acknowledged that not everyone holds the same values in the business world nor are they bound to respect our values. We definitely weighed the costs of our decision, balancing our corporate values, our responsibility as executives of the company, our obligation to our investors, board, and employees. Compromise was not an easy pill to swallow.

I believe these decisions were made somewhat easier because they never directly harmed an entity, never directly lined our pockets, never paid for unlawful activities and we were not personally involved in questionable social-business behavior. Had there been bribery involved, we would have not done the deal no matter how much revenue it generated for us.

Over the years, I have seen and experienced numerous difficult situations where I and others have had to wrestle to remain conscientious and hold onto our ethical principles. I saw one person walk away from tens of millions because he refused to tarnish his reputation and deceive his colleagues. His colleague who didn’t hold the same values walked away with tens of millions — but lost many relationships and his reputation forever. When my close friends and I heard this, we were baffled. Why would anyone sacrifice their friendships and reputation for money? A million, ten million or hundred million…none of it would be worth it for us.

I’m grateful for what I learned from my parents and by working with honorable partners like Peter and Jimmy about the value of standing on principle, even when principle threatens the bottom line. This is a legacy I plan to pass along to the next generation in my household.

Originally published at InsideWork

UPDATE: The people over at Blogged were nice enough to feature this post in their business section.

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