Rotten at the top - deadly at the bottom

There are over 380 million eggs being recalled by Wright County Egg, headquartered in Galt, Iowa. These are eggs that have been shipped since May of this year and made many people very ill.  As of now, there are no reports of deaths.

To be honest I haven’t been paying a lot of attention to the story. Then I read a blog post by my former colleague Robert Reich. I worked with Bob in the mid-70’s when we both worked at the Federal Trade Commission.   That was long before he became a famous person, writing many books and becoming Secretary of Labor. Today, among other things, he blogs at www.robertreich.org.   It was his blog titled “Corporate Rotten Eggs” that got my attention.

With a growing number of high profile “accidents” with devastating impacts on the environment and public health, one wonders: "What is going on?”  There are, of course a number of factors.  One popular reason is the belief that the “government” has failed in its responsibilities. Just this morning on the Today show, Dr. Nancy Snyderman makes an impassioned plea for the government to do its job better and protect consumers in assuring a safe food supply.  Similarly, the US Government’s lack over sight of the Gulf drilling process has been at the center of much of the “blame” for the Gulf oil spill disaster.

What Bob Reich reminds us is to look at the top of the companies that are at the center of these disasters.  It is no surprise that we see a failure of “values”. That is, look at what the individuals hold most important.  With respect to the egg recall, Reich carefully documents the sad history of Wright Country Egg owner Jack DeCoster.  From the days when Reich was Secretary of Labor (early 1990’s) DeCoster and his various companies have been in trouble with the law.  It is apparent that year after year there is a history of calculating that the cost of fines for violating health, safety, labor environmental laws was more affordable that the cost of compliance.

This is a story with a familiar ring. Ford infamously decided it was cheaper not to fix or recall its Pinto than pay for the number of lives that it calculated would be lost by the gas tank defect.

What Bob Reich helps us see then is that the problems we are seeing are problems of values at the top of corporations.  Reich focuses on the “criminality” of the behavior and holding it to account, presumably in the belief that it will deter future criminal acts.  And to that I say “fair enough”.  In some ways, though, that is the easy answer.  It just jiggers a "cops and robbers” vicious circle, adding resources to the cops for now until the robbers figure it out and we do it again.

The real challenge is changing the culture and the values that are applied to decision making at the top of these corporations.  If it is always all about the money we will keep getting the same problems and results we experience today.

We need a new culture and a set business paradigms that prioritize the impact of the company and its products on society. We need to develop a culture of responsibility  When we look at what was going on at DeCoster’s Wright County Egg we see that he was willing to tolerate abuse of people, animals and the environment into order to make more money and in the process risk the lives of millions of American’s.  Better government over sight and enforcement will help, of course. Given the global framework of business today, the size and power of corporations, one government’s increased oversight isn’t going to be enough.

What is needed is for those at the top of corporations to lead and act grounded in the ultimate dignity of every human being, reciprocity and mutual respect in all dealings, and the global interconnectivity of all people. To make this happen those who lead America’s companies – indeed all global business leaders – will actually have to believe that this is their job and mission.  This happens only with changes in culture and law.  Business schools, government and the cultural institutions of our society all have to believe and act to make this happen. We need to bring together these institutions and begin to break down silos that have separated business, faith institutions, non-profits and business schools from engaging each other. Without that engagement and dialogue it is unlikely we are going to make progress, and will instead continue the treadmill of trying to fix the bad things that continue to happen.