“If you apply The Four Way Test in your professional and personal life, you will be very successful.” ~ My grandfather Charles J. Proctor, Rotarian (in his office at the Travelier Motel in Columbia, Mo, to me when I was 10)
Herbert J. Taylor (April 18, 1893 – May 1, 1978) was the creator of the “The Four Way Test of the Things We Think, Say or Do” (see below). He wrote this 24-word statement of business ethics in twenty minutes as he set out to save the Club Aluminum Products distribution company from bankruptcy.
Founded in 1923, Club Aluminum Cookware was sold by door-to-door salesmen until the Great Depression made this method of sales too costly. In 1932, it teetered on the verge of bankruptcy. The then-Vice President of Jewel Tea Company, Herbert J. Taylor, was asked come and help out in the hopes of avoiding insolvency. After he settled the law suits pending against the company, Taylor concluded that Club Aluminum was $400,000 in debt with no chance that existing sales could service even the short-term debt. He was advised to file for bankruptcy. Jewel Tea had concluded that the situation was hopeless and asked Taylor to return full-time.
Instead, Taylor left his $33,000 salary at Jewel and became President of Club Aluminum, with a salary of $6,000. And, using his Jewel stock as collateral, he purchased the controlling interest in the Club Aluminum for $6,100. When Taylor took over the situation was so desperate. In developing his plan of action, his first priority was to change the ethical climate in the company. “If the people who worked for Club Aluminum were to think right, I knew they would do right,” he affirmed. “What we needed was a simple, easily remembered guide to right conduct – a sort of ethical yardstick- which all of us in the company could memorize and apply to what we thought, said and did.”
The Four Way Test
If the people who worked for Club Aluminum were to think right, I knew they would do right. ~ Herbert J. Taylor
The yardstick Taylor referred to ended up being The Four-Way Test, which has since been used by hundreds of thousands of business people as their guidepost for ethical conduct. When Taylor became president of the Rotary Club of Chicago in 1938, he introduced The Four Way Test to Rotary International.
Never changed, the 24 word The Four Way Test remains today a central part of the permanent Rotary structure throughout the world, and is held as the standard by which all behaviour should be measured.
In the meantime, Club Aluminum returned to profitability. The company was able to pay off its $ 400,000 debt within five years. Over one million dollars in dividends were paid over the following fifteen years. And net worth climbed to $1.75 million over the same period.
Source: Wikipedia and American Business Hall of Fame