Rain Making Problem # 8: When Does Mutual Help Cross the Line to Corruption?

In a previous post, an exchange of comments among Andy Hoye, David Harkleroad and me brought to mind an issue that has troubled me over the years. As noted in many posts (see, for example, Mark Buckshon, Bob Burg or Tim Klabunde) on many blogs and as I have described in my books, networking is based on the belief that if you help people, the help will eventually be returned by some of them in the form of new business and referrals.

Though in each case you may give without expectation of return, it is consciously a numbers game; you count on some people giving back some of the time. You may give generously to many, but you also give sagaciously, looking for opportunities to give to buyers and influencers. You seek out stable, mutually beneficial relationships where you give back and forth over the years.

My question: At what point does this sort of mutual help cross the line and become unethical?

The term, reciprocity, doesn’t have negative connotations to most of us, but it certainly does in the professional purchasing world of corporate buyers. That should caution us, because ethics in buying behaviors is central to that profession. Earlier in my career I knew a facilities manager at a large corporation, whose handicapped son drove a specially designed van donated by a group of suppliers to the company on a major building project. Each had anteed up a part of the cost. Generous, yes, even heartwarming, but I cannot believe that accepting this gift didn’t have some impact on his judgment when making decisions about hiring professionals, thereafter.

We can, of course, draw a continuum between buying a cup of coffee and buying a beach house. And money isn’t always involved in the exchange. In recent posts I described how to help a contact’s child find a job. I like giving this kind of help—who doesn’t enjoy helping a young person get started in the world—and have never been given business after doing this, but I am aware of how grateful parents are for this help. Bluntly, I am asking, when does help become a bribe?

This is not just an issue with clients and prospective clients. In a previous post I wrote that ethical concerns about referral fees keep me from accepting them. But is a referral fee so different from a relationship based on back-and-forth referrals? I always refer people who I believe to be of high caliber and right for the client need, but I also refer those first who have been helpful to me.

Enough agonizing. What do you think?

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14 Responses to “Rain Making Problem # 8: When Does Mutual Help Cross the Line to Corruption?”

  1. John Caddell Says:

    Ford,

    The concept of reciprocity in human relations is extremely powerful and will defy attempts to eliminate it (Bazerman in particular has written about this factor in business negotations).

    Given that, rather than trying not to give before one gets, the giver should always understand and abide by the rules that the other party’s company has established (in other words, not tempting the other party to break the rules). Other than that, I say, help away.

    The receiver has obligations. One of which is structural. The company should create processes that ensure that decisions are not made by one person, but involve dialogue among several, to ensure that one person’s feelings of reciprocation do not trump other important considerations.

    The receiver should also be trying to act in the best interests of his company. (Per the above paragraph, that’s not easy for an individual to decide on his own.) But should measure any reciprocation against certain norms and limits. For example, setting up a meeting on behalf of a consultant is likely OK, but awarding a contract to her without any other review/concurrence is not.

    Giving/getting of information, leads, referrals between people seeking business and prospects has existed as long as business has, and will continue to do so. Setting the line between “enough help” and “too much help” is a complex process and requires vigilance, a view of one’s own ethics and integrity, and a process that does not allow important commitments to be made without dialogue and concurrence.

  2. Ford Harding Says:

    John:

    Thanks for the thoughtful comment. Implicit in some of the things you write is a need for transaparency. Other than getting career advice, if a person recieves anything from a professional that he would be unwilling to share with others at his or her company, there is room for questionning appropriateness. Sunshine helps keep germs from spreading. Do you agree?

    Ford Harding

  3. John Caddell Says:

    Yes I do.

  4. David Harkleroad Says:

    John hits a critical point: clearly you must abide by the rules the other party’s company has established. I recall years ago when I was working for an aerospace and defense firm when I (mistakenly, I later found out) offered an officer on the same flight a ride to the airport, literally minutes away. He politely declined, letting me know that under FAR (government procurement rules) that he could not accept anything of value from a contractor, which included a ride to the airport. Sometimes the rules bordered on absurd: we literally couldn’t offer military personnel coffee during meetings (we had to put a collection plate out for them to donate money to pay for their coffee…). On another occasion, at a banquet, the CEO of a company provided ‘goody bags’ containing branded trinkets to all attendees; however, his own employees had to return similar branded trinkets to us under their procurement rules.

    But the more difficult question, absent rules, is when does help become a bribe? I’m not sure there are hard and fast rules, though sometimes we try to make them. For example, because I’ve lived overseas for parts of my professional career, I’ve had to become conversant with the Foreign Corrupt Practices Act, originally passed by Congress in 1977. It attempts to differentiate between ‘bribery’ and facilitation, or ‘grease’ payments, which in many parts of the world – thought not here in the US – are accepted ways of doing business.

    There are some tests you can apply, such as the ‘spouse’ test (how would my spouse react if I told her or him about this?) or the ‘newspaper’ test (how would I feel if my actions appeared on the front page of the newspaper?).

    But like all ethical questions, many of these are judgment calls, and sometimes what is appropriate or not is contextual.

  5. Ford Harding Says:

    David:

    Many thanks for sharing your thoughts and, especially, the stories. The spouse and newspaper tests are excellent guides for all of us. The stink test is another. I think them hugely helpful, but, as you know, they have their limits.

    A client of mine at a big infrastructure engineering firm was put in charge of its California office. He decided to take its biggest clients to lunch to learn how the firm was doing in their eyes. Most were state and local civil servants. The first one he took ordered soup. After the meal was over, when they had talked enough to have a rapport, the guest said, “By the way, you should know that under State law, I’m not allowed to accept anything worth over $x from a vendor, and the soup was the only thing on the menu under that amount.”

    Context is important, as you say. For me, soup passes stink, spouse and newspaper tests, but baked Alaska doesn’t. (Maybe I should work for state government..)

    Ford Harding

  6. Andy Hoye Says:

    After all the stink, spouse, corporate, legal and newspapeer tests are passed, who gives a (expletive deleted). My point here is that there are so many of these impossible stifling tests that human generosity (part of natural law, remember) has received a body blow in the modern corporate environment, one much like humor took about forty years ago. It is hard to show goodwill beyond a smile. Oh, whoops, that could be misconstrued, too. It is all very very sad. And I do not know how to turn it around. (Yes, I know about the abuses, yada, yada…it is still profoundly sad.)

    Except for a couple of years at the major domestic commercial aircraft manufacturer in the US, my corporate life has been in small business. It is a bit easier here for an insurance broker to deliver a fifth of Crown Royal to the best 40 customers every year for 55 years. And much easier to write a college recommendation for the son of a customer. But would you give a strong job recommendation to a competitor’s son, if a client’s son had applied and was inferior?

    The older I get, the more likely I am to throw caution to the wind – maybe that’s why they have pastures…

  7. Martin Stockdale Says:

    Hi Ford–

    Great question, no easy answer(s).

    It is my practice to not give gifts, period. I do, however, send a thank you card to all involved in a purchasing decision that went my way.

    I also will provide a referral, and maybe I am being naive here, but expect nothing is assumed in regard to payment.

    If I am out in a social setting i will bluntly ask if I am allowed to pick up the tab. If so, then that’s fine, I’ll do it. If not I thank the person I asked and move forward with the rest of the event.

    I think most of the time simple common sense will lead you to the correct decision. The sense iIhope is common is this: If what I want to do be can in any way, shape or form be considered as an attempt at influencing a decision by even the most casual of observers then I shouldn’t do it.

    It’s always easier to defend not doing something than trying to justify what you did.

    Marty Stockdale
    COO
    Wireless Logistics, Inc.

  8. John Caddell Says:

    Here are a couple of stories:

    A few years back I engaged a consultant for a small project. After the deal was signed, he sent a nice, modest gift basket. It made me feel really good about him and helped the engagement, in my view. Not only did I never forget that, I have always questioned why I didn’t do something similar each time I signed a new engagement (my wife did as well, she has very good customer-service instincts).

    In my last real job, we replaced a Christmas-card tradition with sending Hershey gift assortments to our customers, with a request to “share this with all the people we work with” (one VP took his home nonetheless, and we sent another). Anyway, many many customers said how much they appreciated the gesture.

    In each case there wasn’t a quid pro quo. And that’s important. The gifts were modest and after the sales had been closed. A way to cement a relationship, and perhaps building a little good will to buffer against future difficulties.

    Also, they recognized that there are humans on both sides of the relationship, and this is perhaps their greatest value.

  9. Ford Harding Says:

    Andy, Martin and John:

    You all provide good practical examples, which make it clear that small forms of help do not really create a problem, unless you sell to the government. This is reassuring. But it wasn’t long ago that corporate CEO’s took opportunities to get in on IPOs on special terms from I-Bankers who also sought their banking business. These same CEOs would probably felt it improper for a purchasing agent to accept something much less valuable from a vendor.

    It is sad, but it’s true, giving and recieving can be overdone in the professions.

    Ford Harding

  10. Tim Klabunde Says:

    Some incredible and thought provoking answers here; by comparison my approach is greatly simplified: Help everyone everyday.

    When I receive a call from someone looking for a referral, I note that the referral helps two people: the person I refer and the person asking for the referral. Helping “everyone everyday” means that I will provide the person looking for a referral with the best possible referral I know, even if that person is not in my network and will not provide me with personal benefit.

    Another example of “help everyone everyday” would be a government employee. If I take them out to lunch above their “limit” I am not helping them. By contrast I am helping them if I can make their job easier by helping them better understand the scope of a project they are about to procure in an effort to help them get competitive bids.

    Finally, companies are made of many more people that just the person I am directly helping. If I am to help “everyone everyday” that means that I would not provide help to an individual in an effort to coerce a company into a bad decision for personal or corporate gain.
    I am certain that I have oversimplified a rather complicated topic, but perhaps focusing on the original goal of helping others can help guide us to the best decision.

    Tim Klabunde
    Cofebuz.com

    PS – Thanks for the link in this post! We are looking forward to hearing you speak at SMPS DC on Feb 18th!

  11. Mark Buckshon Says:

    This is a truly rewarding discussion. Your blog and readers’ comments themselves reflect public generosity that thankfully violates no ethical guidelines.
    I wish I could share a recent example where ethical standards have been tested and I am involved in the story, but as noted above, the news wouldn’t stand the ‘smell test’ in the newspaper — and I publish several. In this situation, the end probably justified the means but there was one point where my wife said (on seeing me receive, unsolicited, sensitive competitive information), “Is this right?”
    Reasonable, modest generosity is generally accepted and respected in the private sector, especially for smaller to medium-sized businesses, where the owner can see what is going on. Understandably, the rules need to be more stringent (perhaps to the point of absurdity) for larger corporations and government agencies. As vendors and networkers, we simply need to appreciate and respect the situation of the other person.
    (And I’m looking forward to seeing both you and Tim at the SMPS Washington event in February.)

  12. Ford Harding Says:

    Tim and Mark:

    Thank you for our comments. Tim’s logic that if it isn’t ethical, you aren’t really helping someone, warrants remembering, though it risks reducing the problem to a tautology. So, we must avoid the trap that if we define something as “help,” it must, therefore, be ethical.

    Mark, who has a rare ability for self reflection, reminds us that we all have done something at some time in our lives that fails one of the tests. And some people would fail a choice on the same test that others would pass it. For example, a company asks firms to compete for work, implying an even-handed selection process, but one staffer gives better information to one firm than the others get, because a partner there once helped him out. This firm is able to compete more effectively. This happens every day. The ethicality of it can easily be questioned, but a firm which refuses to take the proferred information in such cases had best be prepared to lose, often.

    Ford Harding

  13. Matt Handal Says:

    Ford,

    You’ve developed a nice community of readers here. Here is my 2 cents on this topic:

    I think you cross the line when you do something for a client that you wouldn’t be willing to do for a friend with your own personal resources. For example, I might take care of a round of golf for a friend, but I wouldn’t buy him a van. I might pay for a cab ride, but I would never pay for his plane ticket. I wouldn’t be willing to recommend a friend’s kid for a job unless I knew he/she was qualified, but i would not hesitate to give that kid some job leads.

    Each person is going to have a different “comfort zone” when it comes to what they would be willing to do for a friend. So the answer will be slightly different for each person.

    I think its important to use your firm’s resources as you would your own personal resources (money, info, etc.). Its a good way to stay out of ethical trouble in general.

    Obviously, when it comes to public officials you need to be careful. Most agencies make you sign a document stating whether you gave donations or gifts to anyone in a govt. position. So, if your boss signed that document and you are giving gifts…that may lead to some trouble down the line.

  14. Ford Harding Says:

    Matt:

    The friend test is another helpful guideline. Thanks for commenting.

    Ford Harding

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