Leadership and Ethics: Is Doing Business In Los Angeles Really That Different?

My two questions…

Firstly, do my 1979 answers about doing business in Los Angeles stand the test of time? And, secondly, is doing business in Los Angeles really any different from doing business where you happen to live?

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Some background…

It was mid-1979. After spending some brief time living, working and studying in London, Zurich, Paris and Montreal, I’d just arrived in Los Angeles. If you think this sounds mildly glamorous and interesting, I’m cool with that. The truth is sadly that it was neither…

Soon after I’d joined a fancy Century City law firm, an old English client called me. He was the leader of a large international business with offices all around the world. He said he was thinking of setting up an office here in Los Angeles and that he had a question or two for me. We met and I did my best to answer his questions…

 

His question…

He and I had worked together successfully around the world. Over the years, we’d come to appreciate the nuances of communicating across national and cultural borders. This might explain this particular question he had asked me—

“What’s the biggest difference, Michael,” he asked, “between doing business in Los Angeles compared to doing business in other places we’ve worked together before—like London, Paris, Hong Kong, Zurich or Macau?”

My answer…

Because I knew him so well and because he knew I was a smartass, I began by asking if he wanted the long or short answer? With a chuckle, he said he wanted the short one— which didn’t surprise me a bit. OK, I thought, if short is what you want, buddy, short is what you’re gonna get…

“Its about ‘communication,’ ‘ethics’ and ‘fairytales’” I told him.

I then decided to pull his chain. I pretended to end the conversation there and then. I told him it had been really nice talking to him and that he should please send my best to his wife. Just as I was about to say “G’Bye,”  he interrupted me with a chuckle—

“Hold it! You’re not getting off that easily. I don’t understand. You have to explain!” he demanded. “It seems to me,” he continued, “that communication, ethics and fairytales are VERY strange bedfellows.”

Yes, I agreed, they were indeed strange bedfellow. I said I’d explain—

The first bedfellow: “A communication problem”…

I took a deep breath and plunged into an answer about  a business communication problem that you might not agree with…

The Los Angeles gentry,” I offered, “seem to communicate quite differently from the folks we’ve dealt with together around the world. Here, while they use the SAME WORDS that we’ve used before in our travels, those same words now just don’t always mean the same in Los Angeles.”

Before getting too serious, I offered one admittedly silly example:

“When someone here asks you how you are—or how are doing,” I offered, “understand this: They DON’T CARE how you actually are. It’s a little like an Aussie saying ‘G’day, mate.’ It means Nothing, Squat, Nada. Oh, and before I forget, when someone here says: ‘Let’s do lunch,’ that’s most definitely NOT a lunch invitation. Its much closer to them simply saying: ‘Goodbye!'”

Time for a more serious example, I thought—

“In a business context,” I explained, “in London or Paris or Hong Kong, when someone tells you, for example, they have the rights to a particular widget, this generally means they have the rights to that widget. Nothing too profound here, right? If I’m going too fast for you, buddy, tell me and I’ll slow down…”

He chuckled, but said nothing. So I continued—

“In Los Angeles, however, when someone tells you they have the rights to that particular widget, those words can actually mean SOMETHING ELSE—something quite different. Here are three examples of what those SAME WORDS can mean in Los Angeles—

First, those words can mean THEY KNOW SOMEONE WHO HAS THE RIGHTS to the widget; or

Second, the words can mean THEY KNOW SOMEONE WHO KNOWS SOMEONE ELSE WHO MIGHT KNOW WHO HAS THE RIGHTS to that widget; or

Or third, the words can mean that THE KNOW SOMEONE WHOSE MOTHER PLAYS BRIDGE WITH A FRIEND WHO HAS A KID WHO HAS A ROOMMATE WHO HAS A FRIEND WHO THINKS HE KNOWS WHO MIGHT HAVE THE RIGHTS to the widget.”

Now, as I heard his response, it was time for me to chuckle—

“Please tell me you’re joking!!!”

I said I wasn’t—I really wasn’t…

The second bedfellow: “An Ethics problem”…

As I moved to the subject of ethics, I warned him that this might be a little difficult for me to explain—or for him to grasp.

I explained that the very same folks, who all certainly regarded themselves as ethical, were the same people who would tell you that they owned the rights to the widget even when they didn’t. Why was this, I asked? Again, I answered my own question—

“I think the answer might lie in the fact that Los Angeles is the city of the ‘deal’… Everybody here seems to want to be involved in a deal—either directly or indirectly, no matter what. And because nobody wants to lose an opportunity to be a part of a ‘deal,’ the last thing they will ever want is to close any doors to a possible opportunity to be part of the deal.

So, when they tell you that they own the rights to the widget when they don’t, they don’t see themselves as being dishonest or unethical. Instead, they simply see this as a harmless misrepresentation—a perfectly legitimate way of potentially staying involved in a possible deal.

They also don’t see the misrepresentation as really hurting anyone. I think they see it as akin to crossing an intersection when the traffic light is yellow.”

So, what was my conclusion, I asked hypothetically? I answered my own question—

“What you and I might regard as a lie and clearly unethical behavior, our Los Angeles friends might well not regard as being unethical at all… At worst, some might well see it simply as a minor harmless white lie…

The problem for us, however, remains the same: We still won’t know who actually owns the rights to that widget—and we don’t really know what we can believe and what we can’t…”

The third bedfellow: “A Fairy Tale problem”…

I began by explaining that, for me, a fairy tale is the sometimes-extraordinary entanglement of fact and fantasy.

The value of reminding ourselves about fairy tales is that, whenever someone makes a pitch to either a client or me, I ask the fairy tale question—

“Can I identify and separate fact from fantasy in what we’re being pitched?”

While I accept totally that this had made me much more cynical than I typically might have been, I’ve nevertheless found this to be an invaluable tool. I explained why—

“My experience here in Los Angeles is that people seem to believe that the more conviction with which they something, the more likely it is that we’ll believe what they’re saying.

Because of fairytales, I now believe the opposite: The more conviction I hear, the less I’ll believe. So, for example, when someone tells me that they can guaranty I’ll get my investment back in a year—or they they’re 500% certain they’re right about something, I’ll make sure the door doesn’t hit me in ass as I escape.”

I said I hoped this made sense to him, but I still asked him to bear two things in mind. Firstly, and as unlikely and improbable as this may seem, I could be wrong. And, secondly, he should always remember that advice is worth what you pay for it, which, in this case, was nothing…

Postscript—and a question…

About a year later, I bumped into my client in a bar. As we locked eyes, he rushed towards me and put his arm around me as he confided in me…

“Everything you told me a year ago turned out to be ABSOLUTELY true!” he gushed. “It totally astonished me. Thanks SO MUCH!”

As he thanked me, I asked him if I could send him a bill. He said he’s rather buy me drinks for the rest of the evening. After I unsuccessfully tried to negotiate him into buying me drinks for the rest of my life, I accepted his less generous offer…

And now for my question—

Assuming there was any merit at all to my 1979 observations and answers to his question, how do you this these would play in 2015?

In responding to this, please be kind…