Thomas Watson was the sort of guy every business person dreams of emulating. He was a nobody at the turn of the 20th century, but found a mentor and learned the ins and outs of his markets, mastering them. In 1914, Watson was hired to lead a company called the Computing-Tabulating-Recording Company (CTR). He ran with CTR—renaming it International Business Machines in 1924—and by his retirement in 1956 he had grown revenues from $9 million in 1914 to $892 million.
But as journalist Edwin Black extensively chronicles, there was a problematic side to Watson. Watson and IBM built machines for Hitler that helped the Nazi state identify Jewish citizens and were ultimately used for the death camps during the war. Watson himself received a medal from Hitler in 1937 for IBM's services to the Reich. (He returned it under popular pressure in 1940.)
Now, some have pointed out that many Western companies did business with the Nazi regime in the 1930s, including Ford and GMC, and IBM also contributed significantly to the American war effort. The point here is not to condemn IBM, but to ask aloud whether morality has a role to play in the business world. Do business leaders have moral obligations? (To the public? To their customers? To their shareholders?) Morality is distinct from ethics; ethics is a mutually-derived code of conduct (sometimes reinforced by regulations); morality is an internal system of values and principles about (admittedly subjective) notions of right and wrong.
But while subjective, as the IBM example shows, business decisions can have consequences. Coca-Cola CEO J. Paul Austin famously threatened to move his headquarters from Atlanta in 1964 if the city refused to honor Martin Luther King, Jr. Still, some like Geoffrey Wheatcroft reject any notion of morality in business: "A hypodermic syringe can be used to inject cyanide or penicillin. It is not an independent moral agent."(2001) But Adam Smith himself considered morality central to free markets—his two other books were on morality. One of my economics professors asserted that while marginal analysis—the crux of all economic analysis—can sometimes justify things like child labor and slavery, that doesn't mean we should do them. Moral dilemmas are a real challenge for companies. Just ask Mark Zuckerberg, who is now facing a popular and potentially legal backlash in both the US and the EU over just what Cambridge Analytica did with Facebook data.
This brings us to another question: If morality is a concern for the business world, then what role do consultants have? There are reams of materials published on the consulting profession and ethics, but little on morality. What sort of moral obligations do consultants have when they work for dictators or authoritarian regimes? What about clients that deal in hazardous materials? (Think Union Carbide in Bhopal, India in 1984.) What about international arms manufacturers and dealers?
But those are just extreme examples. What about when a large corporate client just won't take the steps necessary to address their problems? Most consultants I've spoken with claim they would walk away in that case, but the evidence suggests that at least some are still happy to continue taking money from these clients despite their refusal to change. There is the reality that some corporations have years, sometimes decades-long relationships with leading consulting firms—but still fail.
None of this is black and white. Morality never is. Business engagement played a role in encouraging reform-minded elements in some Eastern European dictatorships to dump the communist regimes in 1989, for instance. And I've met consultants who are very passionate about what they do, every bit as committed to changing the world as any NGO activist. But how much, if at all, does morality impact the decisions consultants make? They are uniquely placed to influence the business world. How often do they raise not just legal and ethical questions with clients—the stuff that can get them sued or arrested—but moral issues?
One of the themes to arise from the wreckage of 2009 is the notion of customer-centricity. At its simplest it's about listening to customers and giving them what they really want, the way they want, affordably. Consultants have played an important role (along with customers themselves) in driving these themes, helping corporate clients better understand customer segments and customer life cycles, for instance. At some point, as consultants help their clients build trust with their customers, shouldn't moral considerations be on the checklist?
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