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Legal was so 20th century, the 21st is all about Lawful

February 3, 2009

Bonuses, spas, resorts…living the 20th Century model in the 21st Century – no wonder it seems odd

We’re all amazed at the cupidity surrounding those executives granting huge bonuses and one can say they’re unethical and from a PR point of view, a bit stupid. But, are they legal or are they unlawful?

Something being ‘legal’ has a base understanding that it is in technical compliance with the Law. An act being termed “lawful” implies it has a strong ethical correctness. So, you can perform an act which is technically legal but publicly perceived as unlawful.

For many years and before we all knew about Green activities and fuel efficiency, I drove a Chevy Suburban. Great truck, ideal for hauling kids, towing pretty much anything you can imagine, skiing gear stays inside and clean, etc. I used to joke with my friends who drove smaller cars that in an accident, just based on size and momentum, I would win immediately in the Court of Physics, even if I lost later in a Court of Law. Luckily, I never had to prove this, but the parallel here is that in this business climate you can easily win in the Court of Law but big time loose in the Court of Lawfulness. And the public, the purchasing public, the voters, the majority of people in this country, are collectively members of the Court of Lawfulness and so ticking them off is not a bright survival strategy.

Let’s not forget that for most of the 20th Century, information and public perception could be controlled. In the fuller age of the Internet, ie the 21st Century, information comes out as it comes out. Even employees are more likely to use blogs, email, social sites, etc to let their feelings be known. The public controls perception now. Most senior executives came to power in the 20th Century, are products of that Century’s culture and just don’t get how life has changed and so are genuinely amazed by the uproar.

Those businesses surviving this quasi-depression will be those who do everything lawfully, ie never have to risk bad perceptions, public backlashes, angry Congressman and the costs involved in remediation.

It’s actually easier to be both legal and lawful than just legal. And more profitable as well.

Rich Eichen is the Founder and a Managing Principal of Return on Efficiency, LLC, who’s website is http://www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years’ experience reshaping companies, Operations, IT and key initiatives. He can be reached atrichard.eichen@growroe.com

 

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