Trust And US Corporate Dishonesty

High levels of social capital (trust) make for healthy, wealthy and peaceful societies, so it’s distressing that the emerging Hewlett-Packard scandal reveals dishonesty at the heart of a US icon.

HP turns out to be a cesspit (WSJ, $):

Nine journalists’ phone records were targeted as part of an investigation of leaks from Hewlett-Packard Co.’s board, including the personal phone records of a Wall Street Journal reporter, Pui-Wing Tam, according to the company and the California attorney general’s office.

That’s as well as HP’s theft of the private phone records of at least two board directors. The HP board disclaims responsibility for this (it blames outside contractors) but still used the (obviously) stolen goods to sandbag a fellow.

Here’s what this does to social capital. If – as HP claims – it’s OK to pinch people’s private phone records, then anyone can do it. The current board’s opponents can access the corporate and private phone records of the rest of that board, of HP’s legal department, and HP’s outside lawyers. They can use them to find out who instructed the record thieves, and who did the actual stealing.

For example, one of the targets was Tom Perkins, a famous and wealthy man. To steal his phone records the thief needed Perkins’ private phone and Social Security numbers, both obviously closely kept secrets – except to the HP board and HR department. He’ll have people checking their phone records to find out who did the dirty deed.

So HP becomes a Hobbesian caricature:

…a situation in which there is unrestrained, selfish, and uncivilised
competition…

That’s HP board members members warring against eachother, against HP’s legal & HR departments and against its outside contractors.

You can’t run a company this way, particularly a software company. People producing software have to be professionally honest – it’s too easy not to test properly, or to sweep known problems under the carpet, either way leaving your customers to take the pain.

In good software companies high personal integrity is created by example, from the top and people make big personal sacrifices for quality – missing their kids’ concerts, working weekends and holidays etc. They don’t do that in a Hobbesian work environment, so quality falls – after this insight, I won’t touch an HP product.

Thus low quality erodes the brand, reduces shareholder value, degrades company performance and employment, and ultimately reduces the wealth of the nation.

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