With
some prosperous years behind him, Herb returned to Chicago, Illinois, in 1925
and began a swift rise within the Jewel Tea Company. He soon joined the Rotary
Club of Chicago. In line for the presidency of Jewel in 1932, Herb was asked to
help revive the near-bankrupt Club Aluminum Company of Chicago. The cookware
manufacturing company owed $400,000 more than its total assets and was barely
staying afloat. Herb responded to the challenge and decided to cast his lot with
this troubled firm. He resigned from Jewel Tea, taking an 80 percent pay cut to
become president of Club Aluminum. He even invested $6,100 of his own money in
the company to give it some operating capital.
Looking for a way to
resuscitate the company and caught in the Depression's doldrums, Herb, deeply
religious, prayed for inspiration to craft a short measuring stick of ethics for
the staff to use.
As he thought about an ethical guideline for the
company, he first wrote a statement of about 100 words but decided that it was
too long. He continued to work, reducing it to seven points. In fact, The
Four-Way Test was once a Seven-Way Test. It was still too long, and he finally
reduced it to the four searching questions that comprise the Test today.
Next,
he checked the statement with his four department heads: a Roman Catholic, a
Christian Scientist, an Orthodox Jew and a Presbyterian. They all agreed that
the Test's principles not only coincided with their religious beliefs, but also
provided an exemplary guide for personal and business life.
And so,
"The Four-Way Test of the things we think, say or do" was born:
Is
it the TRUTH?
Is it FAIR to all Concerned?
Will it build GOODWILL and
BETTER FRIENDSHIPS?
Will it be BENEFICIAL to all concerned?
Profound
in its simplicity, the Test became the basis for decisions large and small at
Club Aluminum.
But any test must be put to the test. Would it work in the
real world? Could people in business really live by its precepts? One lawyer
told Herb: "If I followed the Test explicitly, I would starve to death.
Where business is concerned, I think The Four-Way Test is absolutely
impractical."
The attorney's concerns were understandable. Any
ethical system that calls for living the truth and measuring actions on the
basis of benefits to others is demanding. Such a test can stir bitter conflict
for those who try to balance integrity and ambition. Sizzling debates have been
held in various parts of the world on its practicality as a way of living. There
are always some serious-minded Rotarians, not to mention skeptics and negative
thinkers, who view The Four-Way Test as a simplistic philosophy of dubious
worth, contradictory meaning and unrealistic aims. The Test calls for thoughtful
examination of one's motives and goals. This emphasis on truth, fairness and
consideration provide a moral diet so rich that it gives some people
"ethical indigestion."
But at Club Aluminum in the 1930s,
everything was measured against The Four-Way Test. First, the staff applied it
to advertising. Words like "better," "best,"
"greatest" or "finest" were dropped from ads and replaced by
factual descriptions of the product. Negative comments about competitors were
removed from advertising and company literature.
The Test gradually
became a guide for every aspect of the business, creating a climate of trust and
goodwill among dealers, customers and employees. It became part of the corporate
culture, and eventually helped improve Club Aluminum's reputation and finances.
One
day, the sales manager announced a possible order for 50,000 utensils. Sales
were low and the company was still struggling at the bankruptcy level. The
senior managers certainly needed and wanted that sale, but there was a hitch.
The sales manager learned that the potential customer intended to sell the
products at cut-rate prices. "That wouldn't be fair to our regular dealers
who have been advertising and promoting our product consistently," he said.
In one of the toughest decisions the company made that year, the order was
turned down. There was no question this transaction would have made a mockery
out of The Four-Way Test the company professed to live by.
By 1937, Club
Aluminum's indebtedness was paid off and during the next 15 years, the firm
distributed more than $1 million in dividends to its stockholders. Its net worth
climbed to more than $2 million.
Too idealistic for the real world? The
Four-Way Test was born in the rough and tumble world of business, and put to the
acid test of experience in one of the toughest times that the business community
has ever known. It survived in the arena of practical commerce.
In 1942,
Richard Vernor of Chicago, then a director of Rotary International, suggested
that Rotary adopt the Test. The R.I. Board approved his proposal in January 1943
and made The Four-Way Test a component of the Vocational Service program,
although today it is considered a vital element in all four Avenues of Service.
Herb
Taylor transferred the copyright to Rotary International when he served as R.I.
president in 1954-55, during the organization's golden anniversary.
Today,
more than six decades since its creation, has the Test lost its usefulness in
modern society, as some critics maintain? Is it sophisticated enough to guide
business and professional men and women in these fast-paced times?
Is it
the TRUTH? There is a timelessness in truth that is unchangeable. Truth cannot exist without justice.
Is
it FAIR to all concerned?
The substitution of fairness for the harsh principles of doing business at arm's length has improved rather than hurt business relationships.
Will
it build GOODWILL and BETTER FRIENDSHIPS?
Man is by nature a cooperative creature and it is his natural instinct to express love.
Will
it be BENEFICIAL to all concerned?
This question eliminates the dog-eat-dog principle of ruthless competition and substitutes the idea of constructive and creative competition.
The
Four-Way Test is international, transcending national boundaries and language
barriers. It knows no politics, dogma or creed. More than a code of ethics, it
has all the ingredients for a successful life in every way. It can and will work
in today's society.
The final test is in the doing. William James, the
noted psychologist, once said, "The ultimate test of what a truth means is
the conduct it dictates or inspires." At the heart of Rotary today is The
Four-Way Test — a call to moral excellence. Human beings can grow together.
Modern business can be honest and trustworthy. People can learn to believe in
one another. At the 1977 R.I. Convention, James S. Fish of the U.S. Better
Business Bureaus said, "To endure, the competitive enterprise system must
be practiced within the framework of a strict moral code. Indeed, the whole
fabric of the capitalistic system rests to a large degree on trust . . . on the
confidence that businessmen and women will deal fairly and honestly, not only
with each other, but also with the general public, with the consumer, the
stockholder and the employee."
Few things are needed more in our
society than moral integrity. The Four-Way Test will guide those who dare to use
it for worthy objectives: choosing, winning, and keeping friends; getting along
well with others; ensuring a happy home life; developing high ethical and moral
standards; becoming successful in a chosen business or profession; and becoming
a better citizen and better example for the next generation.
Eloquently
simple, stunning in its power, undeniable in its results, The Four-Way Test
offers a fresh and positive vision in the midst of a world full of tension,
confusion and uncertainty.
Rotary
International