The Loyalty Conundrum

“Leaders are leaders only as long as they have the respect and loyalty of their followers.” – Hans Selye

Here’s a question I’ve wrestled with for years: When it comes to success, is loyalty a good quality or a bad one?

Should you be loyal to those who have been there for you? If so, for how long? Always? Even after they can’t help you anymore? Even if it might hurt you?

If you care about the people who support you, you are going to face these questions in your career.

I remember reading a story about Oscar De La Hoya, one of the greatest boxers ever. Among other achievements, De La Hoya held championship belts in four weight classes. From all the reports I’ve ever read about him, De La Hoya seems like the ultimate nice guy. Devoted to his mother, who died before he won his 1992 Olympic gold medal, the 34-year-old says he “feels her” looking after him – by a touch on the arm, the neck, the face.

But when it comes to business, he’s all business.

Not so with Shelly Finkel, the guy who trained, managed, and supported De La Hoya during his amateur career.

Finkel not only treated De La Hoya like a son but paid as much as $100,000 for his mother’s medical bills. De La Hoya had promised Finkel he would sign with him when he went pro – but when the time came, he signed with someone else. The “someone” was Robert Mittleman and Steve Nelson, both of whom Oscar jettisoned after only 16 months.

Next was Mike Hernandez, who was De La Hoya’s business manager for six years – during which time De La Hoya and his family went from a net worth of less than $20,000 to millions. Hernandez was fired in 1999.

When De La Hoya fired Gill Clancy, the celebrated trainer, he said, “I loved him being around – great attitude, great motivator. But I look at everything as a business. If they’re not doing anything for you, why have them along?”

Is this what it takes to come out on top? Can you make a decision like that and still be a nice person?

There are many who say there is a difference between what we do in our personal lives and what we do in business. They claim it’s ethical to be somewhat ruthless in business so long as you are honest and loyal and kind to your friends and family.

These people have an interesting moral perspective. Some might call it solipsistic. Be good to yourself first, they say. Because if you are not good to yourself, you can’t be good to others. After you have taken good care of yourself, then pay attention to your immediate family. If you don’t give your spouse and children more of your time, attention, courtesy, and love than you give to anyone else, you don’t have your priorities straight. At the next level, outside of your immediate family, are friends – and then, outside of friends, are colleagues.

Falling so far away from the central core, business associates should not expect to be treated very well. There are simply too many priorities that come before them. In Oscar De La Hoya’s case, there was … well, Oscar De La Hoya.

I’ve talked about this before. I wrote about it in my newest book, Ready, Fire, Aim. The moral world falls into two camps: Those who have this egocentric philosophy of ethics and those who follow the Christian idea of “what you do to the least of my brethren.”

Most Christians, of course, are not Christ-like in this regard. And neither are Jews or Muslims. There’s an inverse relationship between how often a person mentions his religion and how quickly he sins – so long as nobody’s looking.

This take-care-of-yourself-first morality isn’t restricted to religionists. Politicians couldn’t be politicians if they didn’t practice it. Likewise with government bureaucrats, best-selling authors, Hollywood stars, and professional athletes.

Loyalty, their actions suggest, is a sentimental attachment that winners cannot afford. If you want to rise to the top, you have to surround yourself with the best people. Someone who was good at getting you from point A to point B might not be able to take you to point C. If he can’t, replace him with someone who can.

That is what Oscar De La Hoya did. And he’s a four-time champion. At least that’s how some people see him. I see him as a four-time chump.

There is never, ever a good reason to be disloyal to someone who has been loyal to you. Turning your back on someone who has had your back for so many years marks you as a person who has no character. It is a selfish and ultimately stupid way of achieving success.

When you mistreat a longtime supporter, like De La Hoya did, you show the world how shallow and fickle you are. Smart people will see your action for what it is – spinelessness – and avoid doing business with you. You also create, in the person you spurned, a formidable enemy – someone who will spend the rest of his life doing whatever he can to undermine your success. If you make it a habit to treat people this way, you will populate your business world with malefactors and doom your career to an unhappy ending.

Loyalty is a two-way street. Develop a reputation for “using” people, and you will find yourself used when you least expect it. Your employees, feeling insecure and unappreciated, will be motivated only by money and will jump ship the second they get a better offer. Your vendors, also feeling insecure and unappreciated, will think nothing of charging you more and doing less for you – and making sure you don’t find out about it.

Ultimately, loyalty (like honesty and integrity) is a characteristic people will judge you by. In the long run, your life gets better and easier when there are more people pushing for you than against you.

So what do you do when you are faced with an opportunity to better yourself at the expense of someone who has been loyal to you?

You pass it by, that’s what you do.

Sometimes you can find a second way. Oscar De La Hoya has made a lot of money. He could have easily afforded to keep Finkel on in some capacity – focusing on some specific thing he did very well and paying him well and giving him a respectable title. He could have done that if Finkel agreed to it. If not, he was morally bound to stick by the guy who stuck by him.

Of course, De La Hoya is not alone in this. Mike Tyson did exactly the same thing. But in Tyson’s case, his decision to hook up with Don King spelled the end of his career. He got what he deserved. De La Hoya has his just desserts coming.

You can reduce the likelihood of facing this kind of choice in your career by surrounding yourself with people who are not just good but good enough to grow bigger as you do.

When partnering or hiring key employees ask yourself, “What is his potential? What will he be contributing when the business is five times larger?” If the person is good but not that good, feel free to hire him – but don’t become his partner and don’t make any long-term promises. Treat him as well as he treats you, and you’ll both be good for each other.

The second-most-important thing you must do is provide your key people with the information, technology, and direction they need to be excellent. It is so easy, and so common in growing businesses, to neglect this part of the relationship. Time passes and the business grows, but the excellent person you started with hasn’t been given what he needs to keep up. You get frustrated and blame it on him, when it’s your fault.

You must also be honest with them every step of the way. If you believed they were excellent when you hired them but soon found out otherwise, don’t keep them in limbo by letting them do the lesser jobs and doing the more important stuff yourself. Observe them carefully, come to a reliable judgment, and then let them know. Much better and easier for them to be redeployed or even fired after a few months than after a few years.

Finally, recognize that loyalty doesn’t mean you must do what others think you should do for them. Just because someone expects to be your business manager doesn’t mean you should agree to it.

When you hire or partner with someone, he should understand that your commitment is to a particular vision. If you can inspire him to commit to that vision too – and not to you personally – it will be much easier for him to do the right thing when the time comes.

Don’t make promises you can’t keep. Don’t suggest benefits you can’t provide. Hire and partner with excellent people, teach them, listen to them, and get them to commit not to you but your vision.

If you do that, you won’t have to face the choice Oscar De La Hoya faced. And you won’t have to hurt someone who has been good to you and spend the rest of your life feeling bad about it.

[Ed. Note: This fall, Michael Masterson and a group of the world’s leading Internet marketing experts will be revealing proven techniques for shooting your online sales through the roof, creating over a dozen sources of new revenue, and tripling or even quadrupling your profits within the next 9 to 12 months. Sign up now for ETR’s fast-approaching 2007 Info-Marketing Bootcamp – Making a Fast Fortune on the “Other Side” of the Internet.

Correction: In the 9/7/07 issue of Early to Rise, we misspelled the surname of the person quoted before Michael Masterson’s article. It was Hans Selye, not Seliye.] [Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]