Making money while abandoning ethics continues to be an unsustainable business practice, Arizona-based industry leaders told the crowd gathered at the fifth-annual Integrity Summit on Wednesday.
Brian Burt, a partner at the Snell & Wilmer law firm, said the recent Volkswagen emission cheating scandal serves as an example of the fragility of even the strongest of businesses.
“It’s not often the crime, it’s the cover up,” Burt said. “It takes a lifetime to build a reputation and only seconds to destroy it.”
With dozens of impending federal lawsuits, a plummeting stock price and billions in potential fines, Burt said Volkswagen has suffered immeasurable damage. As chairman of the Arizona Better Business Bureau, he said business owners often ask him about the balance of ethics and profit.
“They ask the question, ‘Should I choose the path of integrity or choose the path of profitability?’” he said. “It really isn’t a choice. The not-so-secret secret I think is that integrity generates profit. Acting with integrity, to me, means consistently doing the right thing. Just because it’s legal doesn’t make it ethical.”
Burt said when trust between businesses and consumers break down, his law firm makes money in the short term. However, transaction costs increase and tension builds over a longer period of time, making for a poor investment climate that becomes counterproductive for his law firm.
About 150 people gathered at the JW Marriott Phoenix Desert Ridge Resort & Spa in Phoenix to hear speakers including Gov. Doug Ducey and Phoenix Mayor Greg Stanton.
— Curtis Spicer (@CurtisSpicer) September 30, 2015
Jerry Colangelo, former Phoenix Suns’ and Arizona Diamondbacks’ owner and co-founder of the Integrity Summit, said he built his reputation on handshake contracts without mincing words.
“I think character shows with a person over a period of time,” Colangelo said. “That’s how you are consistently in all phases of your life. When people recognize your word as your bond, that goes a long way.”
Because of this ideology, Colangelo said he easily dealt with lawyers and agents for decades in the cutthroat world of sports since he approached deals in the same fashion each time.
“People say it would be overwhelming or challenging. I didn’t think so ever,” Colangelo said. “Be who you are, and you can make things happen.”
Avnet’s Chief Global Logistics and Operations Officer Mike Buseman said his company depends on maintaining supply chains and marketing electronics from business to business, all predicated on reliability. Fortune Magazine lists the Phoenix-based company as one of the most admired technological distributors.
“We believe the things we focus on internally are now gaining traction externally,” Buseman said.
Deanna Salazar, senior vice president and general counsel of Blue Cross Blue Shield of Arizona, said that bond allows her company to survive. Without a physical product to offer, Salazar said company depends entirely on their reputation.
“We don’t sell anything that’s tangible,” she said. “We sell trust.”