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Three words that may ruin you one day

Lawyer Mugambi Nandi recounted an interesting episode on Twitter recently. He was sitting in the back of a taxi when an ambulance appeared, siren blaring. Mr Nandi’s driver, like many others on that road, refused to give way.

The lawyer took umbrage and ordered the taxi driver to give way, to little avail. He even ended up calling the driver’s supervisor as the message was not getting through. Eventually the ambulance was allowed to pass. Mr Nandi tried to reason with the driver about why it is important to give way to ambulances, to little effect. Indeed, the driver was annoyed for being reported. His reasoning? “Everyone’s doing it.”

Those three words cropped up again recently, when global car giant Volkswagen hit the headlines. It was caught cheating on emissions tests in the US: many of its cars had been rigged to look like they were low on emitting pollutants in test conditions, but were actually not meeting the requirements on the roads.

Here’s what happened next: the company lost a third of its share price over the next two days; its long-standing CEO Martin Winterkorn was forced to step down in disgrace; and VW itself is expected to face costs of many tens of billions of dollars in penalties and legal liabilities.

I was shocked. Two years ago I visited the VW headquarters in Wolfsburg and wrote about it here. I found VW to be a fascinating company: deploying the latest technology while protecting old-fashioned human values. It has grown to house some the world’s iconic auto brands and tussles for number one status with Toyota of Japan. Why would VW do this? Why would it bring shame to itself and its powerhouse nation?

John Gapper told us why in the Financial Times. Because of the same three words uttered by Mr Nandi’s taxi driver in Nairobi: because “everyone does it.” As Mr Gapper pointed out, those are three of the most dangerous words in business. In his words: “Crowd psychology rapidly takes hold. Company X knows what Company Y is doing to game its results without being punished by the regulator, and realises it cannot compete if it does not do the same.”

My own experience as a business advisor suggests this is absolutely true. Many companies can be found gaming the system, engaging in sharp practice, rigging tests, or doing any number of egregious things. These companies will usually profess virtue and look squeaky-clean for the public, while quietly presiding over underhand dealings. Why do they do it? Simply because they think they have to do it in order to win. Because they know their competitors do the same. Because they think they won’t be caught. Because, in any case, “everyone does it.”

Look around you here in Kenya: at collapsing buildings; at mobile-phone SMS scams; at polluted rivers; at tolerance of banking fraud; at procurement rackets. Yes, indeed, “everyone does it.” And almost no one is caught doing it. So it somehow becomes legit for everyone to do it.

No it doesn’t. One day, it will catch up with you. Mr Nandi’s taxi driver may have lost his job; Mr Winterkorn’s legacy is in tatters; VW’s hard-won reputation is tainted. The pressures are huge to “play ball” in your industry, and cut corners. You will be harried by your bosses, your shareholders, even your friends to stop being naive and fall in with the crowd.

Except that the crowd is wrong, and it is doing bad things. Someone’s child dies when an ambulance does not make it to the emergency room on time. Countless other children suffer when big companies’ pollution of the earth is not checked and contained. Livelihoods are lost when toxic pyramid schemes are run by entire industries, not just rogue operators.

We have to be better than this. Mr Gapper again: “The head of a Wall Street bank once told me the lesson he had learned from financial scandals was that ethics are absolute, not comparative. “We don’t behave as badly as our rivals” was a tempting but dangerous attitude.”

If we are all willing to do the dirty stuff because that’s what the world around us does, then we are just racing with rats to get to the sewer first.

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