Why Is Right So Hard?

A long post today – please bear with me. I’m sure you have heard about the cancellation of Roseanne after the show’s namesake sent out a racist tweet. There was about a two-hour delay from when the tweet went public until ABC pulled the plug on the program. During that time, I wondered if ABC and parent company Disney would do the right thing. They did and it’s a great example to any of us in business about something that I’m passionate about.

You know we don’t do politics here. This isn’t political – it’s all business, people. Let’s look at this from a business perspective and let me explain why I’m so proud to be an ABC alumnus today.

First, the business background. This piece from Variety explains the issues ABC has had for years on Tuesday nights. In Roseanne, they finally had not only a hit program but a show around which they could build a solid night of programming. While they had not reaped a huge financial windfall from the show (it was a midseason replacement), they were poised to use it in the negotiations for ad time during the upcoming season. The way things work is that if you want to buy a hit you generally have to buy other programming too to get the best pricing. In other words, the loss is more about what might have been rather than existing dollars. Still, it is a financial hit.

Which leads me to the point about which I’m passionate. ABC made a decision to do the right thing no matter the financial cost or how disruptive it may be to their business. I’m sure they also looked to the potential cost to the Disney brand if they were to give tacit approval to what Roseanne tweeted by doing nothing. They looked to the long-term and to take action in accordance with their own principles and not the easy road. While there is never a good time for something like this to take place, this is probably about the worst possible time, given that the upfront selling season is beginning and ABC just announced their schedule, which will now have to be remade, two weeks ago.

Why is it so hard for companies to do the right thing? A heck of a lot don’t. Insurance companies who spend more effort finding ways to deny claims than to pay them.  Oil companies who fund fake studies to promote climate change denial rather than working to find clean energy. Food and tobacco companies that know about the problems with their products but who fight efforts to make the public aware. Those are just a few examples and I’m sure you can think of many more.

Contrast ABC’s quick, decisive action with other media companies who protected bad behavior by big-time talent. It didn’t require multiple meetings or in-depth analysis. The right course of action was obvious. I’d argue it was as well in other recent cases where the company failed to do the right thing. Equifax knew they had a hacking problem months before they told the public. In that time, executives may have sold $1.8 Billion in shares. Someone at Wells Fargo must have come up with the plan to charge half a million consumers for insurance they didn’t need. Why didn’t someone say “oh hell no” and fire the person on the spot? Even Apple failed to do the right thing by not telling customers it was slowing down their phones even though customers asked.

Any of these things could have been prevented if the businesspeople involved had acted honorably. By that, I mean in a way that would stand up to public scrutiny when measured against ethical and moral standards. Someone knew, someone could have nipped it in the bud, and someone could have used it as a teaching moment to explain why doing the right thing is important.

I know not everyone shares exactly the same standards, but I do believe that placing customers’ needs about profits, thinking long-term, and behaving as if the customer were your Mom or Dad rather than a “mark” is better than maximizing revenue. Shareholder value comes from long-term customers with high lifetime values and a sterling reputation. You get those by opting to do the right thing.

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Filed under Consulting, Reality checks, What's Going On

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