The Four-Way Test

In an ever-increasingly competitive corporate society often labeled as “ethically and morally bankrupt,” is there a simple guide that can guarantee ethical behavior … and success?by Clifford L. Dochterman

In a business and corporate society occasionally labeled “ethically and morally bankrupt,” is there still a place for homespun morality and ethics, based on the simple tenets of truth, goodwill, fair play, and friendship?

In 1932, while the nation was caught in the depths of the Great Depression, countless businesses teetered on the verge of bankruptcy. In such desperate times of despair — and often panic — a leader’s moral fiber is put to the test. Many companies chose to relax standards or ideals in order to save their business — some aggressively, others only slightly. A delicate negotiation when millions of dollars and potentially hundreds or thousands of employees’ livelihoods are on the line, to say nothing of associated vendors, stockholders, partners, and customers that are affected.

Chicago-based Club Aluminum Company was one such company that faced these desperate challenges. However its leader, Herbert J. Taylor, took a revolutionary direction, one that has affected the lives of thousands of people and remains the backbone of some of America’s leading corporations today.

In 2002, Walgreens mentioned it in its annual stock report: “We focus on customers, employees, shareholders — in short, on people. Our mission is clear … and mirrors our basic principles. We will develop people who treat customers — and each other — with respect and dignity. We have a test that’s been passed down from generation to generation of Walgreen employees. In 1956, it was adopted from Rotary International by Charles R. Walgreen Jr., our founder’s son and the company’s second CEO. The words guide employees to consider four questions when making decisions about what they think, say, or do: Is it the truth? Is it fair to all concerned? Will it build goodwill and better friendship? Will it be beneficial to all concerned? That’s our ‘Four-Way Test,’ hanging in almost 4,000 stores, and more relevant today than ever.”

In another example, two neighboring colleges in Southern California had considered merging for many years, but without success. The joint meetings of the school trustees always seemed to end with irresolvable differences. Finally, a Rotarian, who was trustee chairman of one of the colleges, arrived early for another meeting to consider the proposed merger. He placed a copy of The Four-Way Test at each place around the table. It was announced that, “Today’s meeting will use these four questions in all of our discussions.” By the end of the meeting, the merger had been accomplished.

Although The Four-Way Test was never intended to be a definitive code of ethics, there are critics who quickly point out that it merely asks questions, without offering specific business rules or policies. The author of The Four-Way test assumed that business and corporate leaders, as well as other employees, should have sufficient moral and ethical values in their personal lives to enable them to determine the appropriate answers. Tragically, the line between right and wrong answers is not nearly as well defined today as it seemed to be for Depression Era executives and employees.

Other detractors note that the dilemmas of this century are not easily solved with the four simple questions. A journalist may say that although a “breaking news story” may be true in every detail, it may not necessarily be beneficial to all the people concerned. Others might ask how a corporate downsizing will build better friendships or be beneficial to some of the employees involved. The attorney could wonder how a controversial legal dispute would ever build better friendships?

Here again, The Four-Way Test must be considered a personal guide for the things a person thinks, says, or does. The test may not literally provide answers to day-to-day crises, but it can be useful in lifting the consciousness of those who must make moral and ethical decisions. The Four-Way Test becomes the instrument for analyzing moral and ethical implications of current dilemmas. In this sense, The Four-Way Test may help individuals have a better appreciation of how their personal decisions may actually affect others with whom they have direct or even indirect contact. The Four Way Test forces an individual to consider the impact upon others of what one thinks, does, or says. Perhaps this is the best reason that The Four-Way Test should continue to be introduced to students of all ages as initial instruction in ethical and interpersonal relationships.

What is the relevance of The Four- Way Test in this day, when corporate scandals, illegal activities, inside trading, and market abuse have diminished public confidence in big business? Personal and corporate behavior in the 21st century does not seem to demonstrate the same deep ethical and moral roots of a general society that once believed in universally accepted values of truth, honesty, decency, morality, fairness, and goodness. In Taylor’s day, society tended to subscribe to “absolute values” — things were either right or wrong. There did not exist all of the “in-betweens,” which seem to be founded on a current- day ethical philosophy that says, “It all depends.”

Can Taylor’s simple statement of moral and ethical principles still be helpful to executive decision makers?

It is not easy to restore tarnished or scandal-ridden reputations. And to do so, business and corporate decisions, at all levels, must rest upon the fundamental moral and ethical beliefs of the decision makers. Daily decisions are determined to a large extent upon the moral principles that guide each individual’s life. So, can Taylor’s Four-Way Test help today? The better question is, how can we possibly recover from what could be categorized as an era of moral and ethical bankruptcy without a time-tested simple method that everyone from the leaders to the rank and file can adopt as the foundation for all actions.

The Four-Way Test gives individuals a simple and useful tool to help evaluate the daily moral and ethical decisions they are called upon to make. For the executive decision makers who are seeking an easily stated and remembered guideline to bolster their personal moral and ethical philosophy and teaching, The Four-Way Test may be their answer. Amid the challenges, pressures and stress of modern business life, The Four-Way Test can be the compass for personal direction. Adopting and making decisions that reflect the basic values contained in The Four-Way Test may be a significant and useful step that modern business leaders could take in restoring lost confidence in the corporate community and building a new image of ethical standards.