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A man was brought in to head up the entire corporation, all divisions. He had a reputation as a hard driving, no nonsense executive had served in many high level administrative position in the federal government. He knew nothing of the pharmaceutical industry but was given the charge of divesting the company of some 200 profitless and profit consuming businesses and to run a string of consecutive profit-increasing quarters to get the company in a favorable position as an attractive acquisition. And that he did. To insure profit increases by quarter and each and every quarter, one of the first things he did was to eliminate the company profit sharing plan. Totally, and now. That dropped a lot of money onto the plus side of the financials. Of course, there were thousands of us, the loyal career employees, who had thought our retirement was not only secure but would put us in more than a very comfortable Economic class. That was a tremendous blow, not only financially but personally, emotionally. Aside from that, his move was perfectly within his charge. It was a classic strategic move. It was clear to all, that the company was in different hands. Now, the left rail guys in the pharmaceutical division, the division producing the profits knew they had to toe the mark and they did everything to assure that each quarter would show an increase in profits. Some things they did were common business practice. Loading wholesalers at the end of the quarter. Promoting discount packages which would add dollars to this quarter while mortgaging the next. Such moves were commonplace. The problem was that such things cannot continue over too long a period or they catch up with you. So many of their moves became more and more borderline as to ethical and moral practice. The game was to deliver what the top many wanted, no questions asked. It was during this time that I was ready to bring our new product to market. I had created a forecasting model that was new to the industry. This was in the mid-70s before computers, so it was really quite an accomplishment. To reduce production costs, I headed a team that designed an entirely new method of producing a capsule product. Teams came from Japan and Germany to study it. In short, the product was being prepared for launch with extreme care. The product was extremely difficult and expensive to produce so what would be the price out the door? Here surfaces a business, moral, ethical, practical question, difficult one to face. The drug was a life-saving medicine for heart patients who were already taking an average of 4.2 different drugs per day and paying a lot of money just to stay alive. If our drug were priced too high, there would simply be a lot of people who could not afford it and they would quite simply die. The company needed every dollar of profit we could find. After a lot of sleepless nights and extensive meetings with my large team of very capable people, I decided on a sale price that I felt was proper from every side of the issue. In trapesed my boss, VP of Product Management and his boss VP of Marketing & Sales. The top dog wanted this product priced 30% higher. We knew it would be a big introduction and just the initial stocking $$ would be a company record. I said "no" and I had the facts and figures that led to my decision. A couple of days later, I was summoned to a private meeting with David McMillan, the top dog, the same guy who is now heavily involved in our Federal Government. "What's this nonsense about the price of ProTem? I want the price to be…!" His style was one of intimidation. If you didn't know what you were doing or weren't sure, he would have you quaking in your boots. I did know what I was doing and we went at it. I'll give the guy credit, he was hard driving and good at it, but facts and well planned strategy held the field. I'll admit I was terrified, particularly since two levels of my superiors were not giving me any support. The battle was won. McMillan bought my position, but the VP Marketing & Sales did not appreciate my bucking his wimpy position. I accepted that because I still had a job to finish and I returned my nose to the grindstone. I should have been aware that I needed to protect myself. We move ahead eight months, the product had been introduced very successfully I say with no false modesty, and we had three months of initial stocking and sales by year end. Come February and the big corporate review of all issues. McMillan held court and every division head, etc. gave reports. The VP Marketing was at the podium and waxing hard and heavy about the success of the ProTem introduction when McMillan asked, "Why was the product so grossly under-forecast when you knew how important the year-end figures would be?" As is so typical of people in such a position, VPMarketing turned to my boss, "I guess we'd better ask the VP of Product Management, Jim?" My boss, who knew the VPMarketing had cut my forecast by
30% so that the actual numbers would look better was flabbergasted. He didn't know
what to say inform of the entire corporation, and said, "Well, Robert Johnson did the
forecast…" McMillan turned to VP Marketing and his boss and said, "Well, I guess I have to ask if figures shown me are the real ones or just for show." Dead silence and a very pregnant pause. The VP Marketing at the podium quickly called for a coffee break. My boss collared me and asked, "What the hell were you doing, putting Bill on the spot like that?" I did not respond with the tirade I could have, but made it perfectly clear that I would not take the fall for anyone who not only had made a terrible judgment in playing with an important forecast, but then refused to accept the responsibility and take it. That incident made clear to me: 1) the company had changed to a far greater degree than I had imagined, 2) the layers of people on the left rail were many and in positions of power, 3) while my personal an professional integrity had been preserved, there was no way that I could expect to make to the next level in the company. What did I do about it? Nothing! I suppose I could have taken that issue all the way to the top, but the integrity of company executives was not that important in the total scheme of things. There were bigger issues and challenges and charges. I elected to settle into a do nothing position, until I was offered an opportunity to join a group of three players in forming a new pharmaceutical company. I left HealthyLife after 26 years for the unknown. It was a new and frightening experience, subject for another book. I had friends who stayed on another 12 years to retirement and retirement benefits. If I had, I would have a very comfortable financial position now. But I left with me in tact, and I found trials, successes, and some failures I would not have wanted to miss. I still think I won the big one. I cut this short with many business ethics issues to cover. Perhaps in another segment. But, I wanted to comment on your recent situation. You took a risk, an honorable one, but a risk nonetheless. You played your hand clearly and with noble purpose, the very thing that should be done in business. However, some people are small of character and less than honorable. You said you have seen your approach backfire. I prefer what you have done. However, try to plan your action in various resulting scenarios: 1) Your boss reacts positively and responds to your suggestions and direction and takes action. Probably not likely, 2) He "wimps" and does nothing, leaving the status quo and you have to find another avenue to take. 3) He takes your ideas as his own and presses ahead. From what you have said about him, I doubt he has that sort of drive. 4) He uses what you have given him against you. It may be out of fear of his own weakness and he may find it easier to get rid of you. That could be a dangerous position for him if found out, but the easiest for him. You and your colleagues can win by careful and detailed planning. Consider it impossible, and then plan to get it done. The most successful executives are those who surround themselves with the best people, give them authority and responsibility, and encourage them to succeed. That makes them look good. Only the weak fear the success of those under them. I always felt the best managers were those who got their people promoted. If this guy was smart, he would realize that he has you and a group of people who have the company and its success at heart and as a team, can do great things. Maybe presenting things in that light, you all will make him look good and move up to greater things might be the carrot. Don't worry, if you stuff works, in the long run, it will be know where it came from. I don't know what is right for you or how to advise you. You are the one taking the risks and know the consequences. Whatever happens, quality will out. Fear of doing what you think is right is OK. Letting that fear deter you from a calculated, planned course of action you believe in would be hard to live with. |
Part 4 A business fable for modern times, based on a true story. Names of companies, locations and individuals have been changed. Hopefully, this will be enlightening for the reader wrestling with business and ethics Posted with permission of the author. |
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o my company had been infected. If it
can't be proven to be illegal, anything we can get away with is part of the game.
That is tough to live with. As complicated as the situation was, it got worse, or at
least more complicated. Looking back, that complexity resulted in my settling many
business and personal issues.