How Ross Perot Lost a Fortune Due to Bad Principles

There are good principles and bad ones.

Here’s a man whose advice you should not follow all of the time. The following comes from  The Economist.

BUSINESS people love to talk about corporate social responsibility. But how many of them are actually willing to sacrifice profit for principle? When pressed, most of them simply argue that they are doing good by doing well, which prompts the question of why they bother to talk about CSR in the first place.

I was delighted to discover, in Michael Eisner’s “Working Together: Why Great Parternships Succeed“, that Ross Perot, the founder of Electronic Data Services and two-times presidential candidate, was an exception to this rule, a man who was willing to sacrifice a quick buck in pursuit of a deeply-held principle.

In the late 1970s Arthur Blank and Bernie Marcus visited Mr Perot in Dallas to finalise plans for him to take a 70% share in what became Home Depot. Noticing that Mr Blank sported a moustache, Mr Perot said that he had a strict no-facial-hair policy. He made his investment conditional on the removal of the offending hair. Mr Blank refused and took their idea elsewhere. Mr Perot lost billions by turning down the deal, but nevertheless held up the wider principle that companies need to set an example of good personal grooming to the world.

Based on this it’s pretty safe to assume that Ross would have declined as well if the long haired founders of Apple and Microsoft had approached him about investing in their companies in the 1970s.

The Economist’s writer is obviously being sarcastic, but if you don’t get it the point is that there’s a difference between holding worthwhile principles and being a cranky old fart trapped in a 1950s time warp.

I say this as  man with all three of the following:

-moustache

-beard

-long hair