Benchmark Ethics: Loyalty

Loyalty is not the only moral virtue in benchmark ethics. It can’t stand all by itself. Nevertheless, the case can be made that loyalty stands first among the virtues — both for personal character and for corporate culture.

What is loyalty? Its etymology links it to “law.” Originally, “loyal” meant “lawful,” faithful to the law. There’s also a political history. A “loyalist” remained faithful to established authority — especially in times of revolt. The closest synonym for loyalty is fidelity, faithfulness. The opposite is disloyalty: those vices from inconstancy and unreliability to infidelity, betrayal, treachery, and rebellion.

Loyalty is the capacity to remain faithful when tested. It is the disposition to stay committed even when it costs you something. It is the habit of not “bailing out” or disappearing. It is the inclination to hang in there. Both courage and patience are part of what makes for loyalty.

Loyalty is not to be confused with simple, unquestioning conservatism. Thoughtlessly or fearfully clinging to traditional ways of doing things is loyalty run amok. It’s not enough to learn to be loyal; we must learn to be loyal to the right things: our people and our core mission and values.

In a recent book, business consultant Dennis C. McCarthy discusses The Loyalty Link: How Loyal Employees Create Loyal Customers (New York: John Wiley & Sons, 1997). Simply from a bottom line business perspective, McCarthy argues, loyal customers are extraordinarily important. It costs far more to find a customer than to keep one. But how do you keep your customers loyal? McCarthy shows how it takes the kind of company-wide special customer service that only loyal employees will give. There is a clear link between employee loyalty and job satisfaction, on the one hand, and customer satisfaction and loyalty, on the other.

You can see where we go next. What makes for loyal employees — especially in an age of downsizing, job insecurity, technology-enabled employee monitoring, and so on? An employee who thinks he or she may be dismissed at any moment for almost any reason, is unlikely to be loyal. An employee whose performance, communication, productivity, and physical whereabouts are under constant surveillance is unlikely to be loyal. Disloyal, resentful employees cannot very well be bullied and threatened into the sort of customer care that results in customer loyalty.

The foundation of customer and employee loyalty is in the loyalty management shows to its employees up and down the line. McCarthy tells the story of Aaron Feuerstein, the 70 year old owner of a Massachusetts textile factory that burned down in December 1995 (The Loyalty Link, pp. 80ff.). While he could easily have closed the operation down and retired to Florida, Feuerstein, the morning after the fire, pledged to rebuild the factory in the same location, rehire all his employees, and pay out Christmas bonuses and at least a month’s salary to everyone while getting the factory rebuilt. Feuerstein’s saintly performance is beyond the reach of most, but it serves as a reminder that every business doesn’t have to treat its people as replaceable commodities.

In our era, it is often noted, employers and employees work under new conditions of flexibility, rapid change, shifting relationships, ephemeral commitments, and a different “social contract.” Perhaps this is the way it must be; but this is a challenge to find new ways of expressing loyalty, not an excuse to dispense with it altogether.

Perhaps even more profound than loyalty to our people is loyalty to our core mission and values (one of the first of which should be the people factor). Here the best recent exposition is described by James Collins and Jerry Porras (Built to Last: Successful Habits of Visionary Companies, New York: HarperBusiness, 1994, 1997) as “preserving the core.” They advise strenuous efforts to preserve the core ideology (mission and values) of the company — and then go wild on “stimulating progress.” Stimulating creativity, innovation, and risk-taking without simultaneously strengthening the core, they argue, is a recipe for disaster.

Benchmark ethics begins by staying ferociously loyal to the core mission and values and then to our people. This strong double-anchor permits and guides risk-taking and even revolution. Without this double anchor, our risk-taking and our drive for business success may wind up harming more than helping people; if McCarthy, Collins, and Porras are correct, it will also harm the long term bottom line. Of course, for them — and for the IBTE — there is moral weight to the value of loyally caring for people whether it is profitable or not.

I don’t think it should surprise us that the best modern business insights often have ancient parallels. The counsel to cultivate loyalty, to people and to the core mission and values, as traits both of personal character and of our corporate cultures, sounds, in principle, a lot like a central bit of Jewish and Christian moral wisdom to “love God with all your heart, soul, strength, and mind” (this is the stay loyal to the core part) — and “love your neighbor as yourself” (stay loyal to your people).

David W. Gill was co-founder of IBTE and author of Benchmark Ethics, a regular article in the first 32 issues of Ethix. After eight years of writing, speaking, teaching, and consulting in the Bay Area of California, he joined the faculty of Gordon-Conwell Theological Center (South Hampton, Mass.) in 2010, where he is also Director of the Mockler Center for Faith and Ethics in the Workplace.