Ethics and Company Folklore

An Interview with A.C. "Mike" Markkula Jr.

To some businesspeople, ethics is a luxury, something a company can only afford after it has already become established. In the rough-and-tumble of a new venture, some entrepreneurs argue, you have to be ruthless to survive; after the IPO is time enough to attend to the niceties of morality. We asked Mike Markkula, "Is it naïve to talk about ethics in a start-up context?"

The most pregnant moment to establish ethics is when you’re just starting up because actions that leadership takes during that phase become the folklore of the company and set the tone. These are the stories that are told about how management went about dealing with problems. The folklore is really a statement of the company’s decision-making processes—including its ethical decision-making processes—that everyone can relate to.

Probably the most famous example is the H-P way. Employees [at Hewlett-Packard] will say, "What would Bill have done? What would Dave have done?" That’s the company culture. When Apple first started, we spent a long time developing the Apple values. They were statements everyone could relate to—not integrity, truth, justice or words like that. They were statements like, "We want to be a good citizen of whatever community we reside in."

That could be as simple as saying, "Let’s not put big piles of trash outside our offices. We don’t want to mess up the neighborhood." Or it could be that we decide to support a vice president who says he wants to participate on the local planning commission. It’s a trade-off we’d have to weigh…. But if you want to be a good corporate citizen, you want people to participate in charity activities, city government, whatever area they find satisfying.

Markkula went on to describe how the Apple values set the tone in other areas of the company’s operations.

Part of the reason I started Apple was I wanted to make a company that worked the way I wanted it to work. One of the things that I think is a hidden cost in many companies is politics—who has what job title, what authority. So when we started Apple, we made a rule that we would have no job description longer than two paragraphs. We considered not having job titles at all, but we decided against that because we thought people outside the company wouldn’t know how to relate to us.

Still, we did have an unusual structure. I was the chairman, so the president worked for me, but I was also vice president of marketing, so I worked for him. That sent a message: It doesn’t really matter who you work for; it matters what you do. I suppose the ethical facet of that would be how you interact with other people. Whether they’re the janitor or chairman of board, you treat them with respect, recognize their contributions and their faults. That, then, becomes part of the company folklore.

Currently the owner of ACM Investments, Mike Markkula is probably best known as the former chair and president of Apple Computer. For his part in founding the Markkula Center for Applied Ethics, he was named to the San Jose Mercury News Millennium 100 list—one hundred individuals "who made Silicon Valley what it is today."