Integrity Consulting Services

Aligning with Values to Do The Right Thing and Impact Client Relations

The Application of the Six-Step Process

1. Have I taken the time to stop and think?

The local store manager clearly stopped and thought about this crisis and the need to make a decision. He initially weighed the 2 options against his values which was the first flag that something was wrong with the “norm”.

2. What are the short and long term goals? Are we sacrificing long for short?

  • The goals of the company were to continue to grow, preferably without sacrificing revenue in the short term. The long term goal of establishing a culture of integrity was also new and important to the local store manager and the CEO. Clearly however, the industry norm from a supplier perspective was to risk long term reputation and trust to ensure short term financial gain.

3. What are the facts?

  1. The industry had been following this deceitful practice for years. Possibly the clients knew about it, possibly they did not.
  2. Commissions had been paid out to the sales team for this project, based upon the invoice containing the cost of the missing equipment.
  3. Company margins were healthy. The refund would not have a lasting impact, but the company could face retribution from competitors who would look foolish if the company offered a refund and the word spread.
  4. The values in conflict here are really Integrity, Relationships and Success. The success value measurement is short term. However, long term relationships in the industry could be damaged if a refund is issued. It would cause other clients to wonder what was going on after missing equipment had been paid for. The company’s priorities of values were: Integrity, Relationships, Success. Clearly we have to stand by integrity on this one.
  5. It is unknown at this point how the customer would respond to us being honest about his. They could ask us to go back and audit all our work over the years working with them and refund any equipment returned. 

4. What are decision options and which one(s) are best? Is there a trilemma option?

  1. Option 1: Do nothing. Start changing things on the next project. (which honours our success value)
  2. Option 2: Offer the client a credit on the next job (the supports our integrity value, but leaves a lot of unanswered questions which would eventually effect our relationship value
  3. Option 3: Give the client a refund, but hand deliver the cheque to the project manager and let him know why we are refunding the money. This allows us to leverage Integrity and Relationships with Success yet to be determined.  This is the trilemma option that meets all values.

5. Does our decision pass our ethical decision filters?

Our Corporate Core Values Yes or No
  1. Option 1 fails against our integrity value (WE ELIMINATED THIS OPTION AT THIS STEP)
  2. Option 2 fails against our integrity and relationship values. Why would we keep the money and offer a credit if the money is not ours . Its like holding our customer hostage for the next job. (WE ELIMINATED THIS OPTION AT THIS STEP)
  3. Option 3 passes (WE MOVED FORWARD WITH THIS OPTION)
Our Ethics Check Questions Yes or No
  1. The Compliance filter Yes or No:  Our client and our parent company are both public companies. Any future audits could conclude with a fraud charge, although the probability was low.
  2. The Ripple Effect filter Yes or No: The 2 big parties in the ripple effect are the customer who has paid too much for the job and the sales people who will lose their commission earned possibly.
  3. The Golden Rule filter Yes or No: The Local Store manager stated  from the beginning “if I were the customer  I would want a refund. “
  4. The Gut Check filter Yes or No:
    1. Personal Core Values. Option 3 passed all personal core values for both the local store manager and the CEO.
    2. Would I want my decision published? Both said they would be happy to have their decision published.

6. How are we prepared to monitor and modify our decision?

  • If option 3 were enacted, the CEO and the local store manager agreed that the local store manager would hand deliver the check to the project manager. This way he could gauge the response personally and answer any questions. He also stated he would do a follow up sales call to check how the relationship was after the refund was delivered.
  • There were those in the company who had been so accustomed to the “industry norm” of not refunding the money spent on returned equipment, they had difficulty agreeing with this decision. They saw the annual revenue of the company dropping significantly. Although he did not communicate the dilemma or his plan to his competitors, some of whom were close friends, the CEO did feel that relationships would be damaged in the short term if he approved a refund. He was potentially going to lose some of his own team members as well as friends and colleagues in the business.

The Epilogue

Based on the Local store manager and the CEO’s engagement with the Six-Step Decision Making Process, they realized that not refunding the client was a violation of the company’s newly defined values. Together both had made the decision to refund the money received for the returned equipment. The CEO decided not to have the sales team return commissions earned on the inflated profit, but was clear about how returns would be handled in the future. In fact he changed policy to state that commission would not be earned on lost equipment billed for. Now the challenge was determining exactly how he was going to execute on the rebate. It was really the local store manager who came up with the idea.  Instead of simply sending the client a rebate check, the rental office manager got in his truck and drove 7 hours, 1 way to meet his client, the project construction manager. He delivered the check with an explanation of what he was doing and why. He shared with the client his recent adoption of core values and this was clearly the right thing to do based on those values. He even left his customer a copy of their values card with the 6-Step decision making process on it.

As more equipment slowly trickled in over the next few months, each time the rental store manager would hand deliver a rebate cheque to his client. After two months the last cheque was hand delivered, representing a 90% refund on the “missing” equipment invoice.

Shortly after this set of cheques were returned to the client, the CEO of the rental company was contacted by the President of the construction company who had rented his equipment. He was asked if he and the local store manager could meet in the main construction company office in Calgary, Alberta. The Rental company President along with his local Store Manager went to the meeting. The construction supervisor who received the rebate cheques was also there. They were told by the Construction Company CEO how impressed he was with their honesty. For that reason, he stated that he wanted to award a 5 year exclusive rental agreement contract to my customer. His words: “Finally a contractor we can trust.”