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Right is Might
In a world which believes in the credo "Might Is Right", two women entrepreneurs in the US decided to implement the teachings of Richard Wetherill's seminal book "Right is Might" and went on to set up a very successful auto components business, which subsequently went on to become a global brand in its space. In this story lie valuable lessons for every entrepreneur - especially those in fiduciary businesses like financial advisory - on the power of the credo "Right is Might".
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Marie Bothe and Edith Gripton, middle aged women from Philadelphia, US, were so taken in by Wetherill's teachings that they decided to call their firm Wetherill Associates, Inc (which later became WAI Global). Marie had earlier worked for Wetherill, a management consultant. What she did was to go beyond consulting - she actually implemented Wetherill's philosophy - and did this very successfully. Starting with $2500 each pooled by the two partners, WAI set up a small electrical auto parts business in 1978. By 1993, it had grown to a team size of over 350 and an annual turnover of over $ 100 million.
What set WAI apart from the rest was the way it ran its business. Marie, the CEO, delegated all functional tasks - operations, marketing, finance - to professionals, and focused on her key role as the de facto Chief Ethics Officer of the company. Honesty and integrity were the core principles adopted by WAI - in a business where these qualities were scarce.
Here are some of the core beliefs that Marie inculcated into WAI:
Getting something for nothing is dishonest, even if legal and fashionable Getting too much for too little, even when the opportunity exists, is dishonest All dealings of the firm will keep the customer's interest first, then its suppliers, its employees, its community and finally its shareholders.
Customer first meant that if it couldn't supply a part to a client, it would refer the client to a competitor who had it - because the customer's interests came first.If a supplier made an invoicing mistake that gave an advantage to WAI, the company would scrupulously notify the supplier and ask for a revised invoice.
Honesty was the guiding light for all hiring decisions made by WAI. The company quickly built a reputation of zero tolerance for any dishonesty by any employee - even if the action was within the parameters of the law. Profits were largely shared with all employees, with the disparity in pay from the top to the bottom being easily among the lowest in the country.
Marie created WAI's "Quality Assurance Manual" - which was treated like the Bible of the company - a unique combination of the firm's philosophy, conduct guide, technical manual and a company profile - a sort of "all-in-one" document that every employee could refer to for anything technical or behavioural about the firm's business and operations.
The auto components business in the US at that time saw rampant corruption as deals between component suppliers and the larger OEM auto companies often saw bribes, kickbacks and pay-offs as the central component of deal making. WAI, with its ethical standards upset the apple cart big time. There were enough and more purchasing department personnel from its larger clients who didn't quite like what they saw in WAI. But, WAI stood its ground, started small, worked on the fringes initially with clients who liked what they saw, and gradually built a powerful niche for itself, by differentiating itself sharply on business practices more than anything else.
It took Marie Bothe a lot of time and endless conviction in her model through the initial rough times, but what she demonstrated with WAI was that it is indeed possible, practical and immensely desirable for firms to be set up and run with the notion of "Right is Might" instead of "Might is Right".
Food for thought
The financial advisory business globally is moving from transparency to something much deeper - treating customers fairly. The UK has its set of "Treating Customers Fairly" guidelines in place, and many countries including India are closely studying the guiding principles of UK's TCF doctrine. Treating customers fairly goes beyond being compliant - it gets to the heart of doing what is right for the client - even when doing something less right is legally allowed. Those who are genuinely far-sighted will see the merit of embracing "Right is Might" as the guiding philosophy for their financial advisory business - because that is finally what will be your cutting edge over many others who continue to react to evolving regulations rather than being far ahead of the curve on ethical standards in their fiduciary businesses.
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