Toops Scoops: Apple, Panera and the Profitability of Ethics

As we head into March and National Ethics Awareness Month for insurance, I've been thinking a lot about acting with integrity.

Not that any of us aren't. I'm a firm believer that most of us are trying our best to do right by our fellow human beings. But in tough times, it's easy to slip into a survivalist mentality where we will do anything to hang on, hoping that when (and if) good times return, we can go back to the luxury of "doing the right thing."

Except that doing the right thing should never be a luxury.

Probably the biggest thing that got me thinking about integrity was a story that's been bubbling up for awhile but finally achieved huge national exposure this week on ABC's Nightline: working conditions at the Foxconn electronics plant in Shenzen, China.

The massive plant churns out products like the iPad -- not by machine (too expensive), but human labor. To me, the most sobering aspect of the Foxconn story is the "suicide nets" draped along the upper stories of the building to prevent jumpers.

You could argue that the young Foxconn workers are lucky to have jobs, that living conditions in the dormitories are no worse than in rural China, and you'd be right. But the image of all those silent workers put me in mind of conditions at the Triangle Shirtwaist Factory, and it would be nice to think we've evolved beyond that.

I don't think the Foxconn expose will cut into the hordes of people queueing up for the lasest Apple toy, or slow down the beatification of Steve Jobs. But it might cause us to think about whether our corporate practices are ethical.

Ironically, some scientists say that the "nice guys finish last" mindset is wrong -- not just morally, but because it's inaccurate.

Dacher Ketlner, a professor at the University of California/Berkeley and co-director of the Greater Good Science Center, maintains that we humans have survived as a species by controlling our destructive instincts and protecting, helping and being kind to one another.

That's very high-minded and all but, to be crass, can it turn a buck? Conventional wisdom might say no -- but a quiet trend that started in Dearborn, Mich. actually suggests that it can.

About a year ago, Panera Bread launched an experiment in Dearborn by setting up a store where customers "paid what they could" for menu items. The experiment worked: The company estimates that about 20 percent of patrons give more than the suggested donation, about 20 percent give less or nothing, and about 60 percent leave the suggested amount.

A year later, the cafe is breaking even, taking in about 80 percent of the retail value of the food, enough to pay expenses. Panera is happy enough with the results to be launching more "pay what you can" locations in other cities.

And Panera's shareholders are probably pleased, too: At year-end 2011, Panera reported adjusted net income of $42 million, or $1.42 per diluted share, a 28 percent year-over-year increase from 2010.

Of course, insurance is neither electronic toy nor bread. And actuarially speaking, there is no way insurance could replicate the Panera formula. But by thinking altruistically, Panera is taking the long-term view of corporate success and building a devoted return-customer base -- and insurance is all about repeat customers.


About the Author
Laura Mazzuca Toops,

Laura Mazzuca Toops,

Laura Mazzuca Toops, National Underwriter Property & Casualty executive managing editor, is responsible for the Agent & Broker channel for Her more than 20 years of property & casualty insurance experience includes associate editor at Business Insurance, Midwest managing editor with Insurance Journal, and freelance work for insurers, brokers and trade associations. She holds a bachelor’s degree in journalism from Columbia College Chicago. She may be reached at


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