Corporate Ethics, and Glitches, in Houston

By Matt Kelly | August 30, 2017 |

Our usual discussions of corporate ethics and compliance seem a bit out of tune this week, given Hurricane Harvey and the tremendous suffering it has poured down on millions of Texans. So today let’s hopscotch through a few examples of corporations trying to maintain ethics, moral values, or good common sense in these trying times.

First we have Gallery Furniture, a furniture chain with three stores around Houston. The proprietor, Jim “Mattress Mack” McIngvale, sent out this tweet Sunday night:

 

Mattress Mack’s tweet had been retweeted 20,000 times by last night, and rightly so. It’s a simple, straightforward gesture of kindness and generosity in a time of trial. Will it also win Gallery Furniture years of goodwill among the public? You bet. It’s brilliant marketing, and I imagine every salesman in America is applauding Mattress Mack on those grounds alone.

But before we assume that Mattress Mack used his generosity solely as a loss leader for future sales, take a look at the About Us page of his company’s website. At the bottom, McIngvale talks about annual donations of furniture to homeless families, to Houston schools, and to the Houston Livestock Show & Rodeo, which sounds as weirdly Texas as a New Englander like me can imagine. Whatever. Sympathy and generosity are two of the most important moral values we can demonstrate to each other.

More precarious was the situation of televangelist Joel Osteen, senior pastor of Lakewood Church in Houston. Osteen has run his mega-church for years in an arena that seats 16,800. Osteen canceled services on Sunday as Hurricane Harvey slammed into Texas. Then the church stayed closed until midday Tuesday, even as thousands of Houston residents desperately needed shelter.

You can imagine the social outrage on Twitter. One video sample is below:

 

 

Osteen soon saw the light. By Tuesday afternoon the church had opened its doors, and began distributing baby food, clothing, and other supplies. Osteen also promised that if city shelters reach capacity, the church would provide shelter,too.

Corporate Ethics

Courtesy: Lakewood Church

We need to be more fair to Osteen than some people on Twitter have been. Roads around the church were inaccessible; hence he closed the doors. The church also apparently did sustain some flooding, as seen from photos posted online. A church spokesman told Slate magazine that several staffers remained at the church all the time, and had instructions to let in anyone seeking help—and, that spokesman rightly noted, the church isn’t designed as a shelter. It has no showers, no kitchen, no lockers. Stuffing 10,000 desperate people into Lakewood would do us few favors.

The lesson for organizations here is about selective documentation, which is a very real threat in the social media age: critics capture proof of what they want to see—which, of course, is some instance that could be interpreted as the organization behaving counter to the values you profess—and then plaster it across the Internet.

Best Buy had similar problems thanks to errant employees at a Houston store, who were selling bottled water at $42 per case. Residents quickly spread images of that price-gouging on Twitter (see below), which quickly came to the attention of Best Buy senior executives, who quickly apologized.

 

 

Best Buy says that because its stores typically don’t sell bottled water, employees didn’t know how to price a case of it accordingly. They took the price for a single bottle and multiplied that out to 24 bottles in a case, to arrive at the $42 price.

Kudos to Best Buy for trying to help Houston residents, by selling supplies they would actually need during this crisis. Still, that’s 5 demerits for not training employees on how to apply core tasks such as pricing to new products being sold for the first time.

Proper training shouldn’t be too hard, because those employees had to have been thinking, “You gotta be crazy to pay $42 for a case of water.” If their common sense told them it was wrong, they should have had the power to fix it. If they deliberately didn’t want to fix it, that’s price-gouging, and they shouldn’t have been on payroll.

Praise goes to HEB, the grocery chain based in San Antonio with stores across Texas. HEB first caught my eye when someone tweeted a photo of its founder working at the company’s emergency operations center. Then I visited the company’s website and found that it…

 

I suspect we could say the same of Walmart, Home Depot, Target, and other retailers; I simply haven’t had time to investigate what they are doing. I do recall the disaster of Hurricane Katrina in New Orleans in 2005, where one of the most efficient distributors of relief was Walmart. Walmart’s then-CEO told local managers “do the right thing,” which prompted one manager in Waveland, Miss., to bulldoze down a wall so people could reach needed goods.

All these retailers are masters at supply chain and logistics issues. So when disaster strikes, we can expect them to excel at getting needed goods to the right place at the right time; that’s what they do for a living. The only difference this week is that HEB (and many others) are doing it either for little or no profit (the latter, most likely), because that upholds their core values—the core values we all have as Americans and human beings, really.

Some people will carp that businesses are using Hurricane Harvey as an opportunity to curry goodwill with the public; that all these altruistic gestures are simply loss leaders to cultivate more profit in the future. So what? Isn’t life supposed to be about doing good now, with the blind faith that good will come back to you in return?

Good luck to the many compliance professionals who live and work around Houston. Check in with us when you can.

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