Rotten to the core

“We are in the process of rebuilding our ethics program and understand that there is still more work to do.”

– Michael Capellas, Chairman and CEO, MCI (Associated Press)

As if cheating in its accounting wasn’t enough (US$11 billion for Pete’s sake!), the Justice Department is now investigating accusations that MCI defrauded other telephone companies of hundreds of millions of dollars by routing long-distance calls as local calls as well as diverting other calls via Canada to avoid paying U.S. local carrier access fees.

And as if that wasn’t serious enough, now the government’s U.S. General Services Administration (GSA) has suspended all new business with MCI after its own investigation concluded that MCI “lacks necessary internal controls and ethics.”

Because the GSA is the part of the government responsible for negotiating and acquiring pretty much anything that federal agencies require, this is a serious turn of events. The feds spend more than $1 billion with MCI annually, and while existing contracts will be continued, there will be no new business until MCI can demonstrate that it has changed.

Which raises an interesting question: Can MCI be salvaged? I use the term “salvage” because there’s so much rot in the body of the company that words like “redeem” or “cure” are not applicable.

The problem is that corporate personalities, just like the personalities of individual humans, are hard to change. For example, have you ever tried to lose weight? Then you know how hard it is to break your habits. You can have the best of intentions and then someone says, “Hey, want an ice cream?” and before you know it you’re sitting on the sofa with a giant tub of Ben & Jerry’s Oatmeal Cookie Chunk.

Corporations are the same. They get used to providing bad service (a peculiar talent of telecom companies), taking shortcuts, padding bills and that becomes standard procedure.

Worse still, the bigger the company the harder it is to stop the creep of moral rot. It just gets deeper and deeper into the organization and harder to expose.

So what to do with MCI? I’d suggest that we break them up, sell them off, anything but allow them to be another rotten apple in the big-business barrel.

Let me be clear: I am not anti-big business per se, but when a company of such incredible size and power is rotten to the core it is essentially dangerous to our culture. Not only does it destabilize financial markets but it destabilizes the businesses it serves.

And for the IT groups, there’s an important question to take away – how rotten is your company and are you part of the problem? These days IT is almost always involved or aware of every aspect of business that matters.

Presuming the latest MCI allegations are true, you would think some non-management technical guys were aware that something wasn’t kosher. And if that’s the case, and they didn’t blow the whistle, then they sold their souls.

You could argue that people in this kind of situation fear losing their jobs, but that isn’t a good enough argument. Being involved in a crime isn’t just a risk to your livelihood. It’s also a risk to your career, your credibility and your personal integrity.

And there’s always the risk of being found an accomplice with all the legal consequences that might entail.

Which leads to another takeaway: How carefully do you vet those you do business with? Are your partners and suppliers on the up and up or will you be dragged into their dishonesty and immorality?

And the bigger the business, the more that rottenness can be hidden. In business, never underestimate how quickly rottenness will reach to the core.

Tell me you’re clean at