The Four Way Test
Herbert Taylor,
Creator of the Four Way Test
Credit: email from DGN Dr Baskaran
Dear Rotarians,
More than 80 years ago, in the midst of the Great depression, a Rotarian from U.S.A.devised a simple four part ethical guideline that helped him rescue a beleaguered business. The statement and the principles it embodied also helped many others find their own ethical compass. Soon embraced and popularised by Rotary International, the Four- Way test today stands as one of the organisation’s hallmarks. It may very well be one of the most famous statements in our century odd existence.
Herbert J. Taylor, the author of the test, was a mover, a doer, a consummate salesman and a leader of men. He was a man of action, faith and of high moral principles. Born in Michigan,USA, in 1893, he worked his way through North Western University, Evanston, Illinois. After graduation, Herb went to France on a mission for the YMCA and the British Army welfare service and served in the US navy Supply Corps in World War 1. In 1919, he married Gloria Forbrich, and the couple set up housekeeping in Okalahoma, USA, where he worked for the Sinclair Oil Company. After a year, he resigned and went into insurance,real estate and oil lease brokerage.
With some prosperous years behind him, Herb returned to Chicago,Illinois, in 1925 and began a swift rise within the Jewel Tea company. He soon joined the Rotary club of Chicago. In line for the presidency of Jewel Tea company in 1932, Herb was asked to help revive the near bankrupt Club Aluminum Company of Chicago. The cookware manufacturing company owed $400,000 more than its total assets and was barely staying afloat.Herb responded to the challenge and decided to cast his lot with this troubled firm. He resigned from Jewel Tea, taking an 80% pay cut to become president of Club Aluminum. He even invested $6,100 of his own money in the company to give it some operating capital.
Looking for a way to resuscitate the company and caught in the Depression’s doldrums, Herb, a deeply religious man, prayed for inspiration to craft a short measuring stick of ethics for the staff to use. As he thought about an ethical guideline for the company,he first wrote a statement of about 100 words but decided that it was too long. He continued to work, reducing it to seven points. In fact, the Four-Way test was once a Seven -Way test. It was still too long, and he finally reduced it to the four searching questions that comprise the test today.
Next, he checked the statement with his four department heads: a Roman Catholic, a Christian Scientist, an Orthodox Jew and a Presbyterian. They all agreed that the test’s principles not only coincided with their religious beliefs, but also provided an exemplary guide for personal and business life.
And so, “ The Four-Way Test of the things we think, say or do” was born:
1.Is it the TRUTH?
2.Is it FAIR to all concerned?
3.Will it build GOODWILL and BETTER FRIENDSHIPS?
4.Will it be BENEFICIAL to all concerned?
Profound in its simplicity, the Four-Way test became the basis for decisions large and small at Club Aluminum. But any test must be put to the test. Would it work in the real world? Could people in business really live by its precepts? One lawyer told Herb: “ If I followed the test explicitly, I would starve to death. Where business is concerned, I think the Four-Way Test is absolutely impractical.” The attorney’s concerns were understandable. Any ethical system that calls for living the truth and measuring actions on the basis of benefits to others is demanding. Such a test can stir bitter conflict for those who try to balance integrity and ambition. Sizzling debates have been held in various parts of the world on its practicality as a way of living. There are always some serious minded Rotarians,not to mention skeptics and negative thinkers, who view the Four-Way test as a simplistic philosophy of dubious worth,contradictory meaning and unrealistic aims.The test calls for thoughtful examination of one’s motives and goals. The emphasis on truth, fairness and consideration provide a moral diet so rich that it gives some people “ethical indigestion.”
But at Club Aluminum in the 1930’s, everything was measured against the Four-Way Test. First, the staff applied it to advertising. Words like “better”, “best”, ”greatest” or “finest” were dropped from ads and replaced by factual descriptions of the product. Negative comments about competitors were removed from advertising and company literature.The Test gradually became a guide for every aspect of the business, creating a climate of trust and goodwill among dealers,customers and employees. It became a part of their corporate culture,and eventually helped improve Club Aluminum’s reputation and finances.
One day, the sales manager announced a possible order for 50,000 utensils. Sales were low and the company was still struggling at the bankruptcy level. The senior managers certainly needed and wanted that sale,but there was a hitch. The sales manager learned that the potential customer intended to sell the products at cut-rate prices. “ That wouldn’t be fair to our regular dealers who have been advertising and promoting our product consistently,” he said. In one of the toughest decisions the company made that year, the order was turned down. There was no question that this transaction would have made a mockery of of the Four-Way Test that the company professed to live by. By 1937, Club Aluminum’s indebtedness was paid off and during the next 15 years, the firm distributed more than $1 million in dividends to its stockholders. Its net worth climbed to more than $2 million.
Too idealistic for the real world? The Four-Way Test was born in the rough and tumble world of business, and put to the acid test of experience in one of the toughest times that the business community has ever known. It survived in the arena of practical commerce. In 1942, Richard Vernor of Chicago, then a director of Rotary International, suggested that Rotary adopt the test. The R.I. Board approved his proposal in January 1943 and made the Four-Way Test a component of the Vocational Service program, although today it is considered a vital element in all five avenues of service.
Herb Taylor transferred the copyright to Rotary International when he served as R.I.President in 1954-55, during Rotary’s golden anniversary. Today, more than eight decades since its creation,has the test lost its usefulness in modern society, as some critics maintain? Is it sophisticated enough to guide business and professional men and women in these fast paced times?
Is it the TRUTH? There is timelessness in truth that will always be unchangeable.However, truth cannot exist without justice.
Is it FAIR to all concerned? The substitution of fairness instead of following the harsh principles of doing business at arm’s length has improved rather than hurt business relationships.
Will it build GOODWILL and BETTER FRIENDSHIPS ? Creating a positive energy with love is preferable to creating animosity and hatred. Human beings, by and large are loving and want to co exist peacefully.
Will it be BENEFICIAL to all concerned? This question eliminates the dog-eat-dog principle of ruthless competition and substitutes with the idea of constructive and creative competition.
The Four-Way Test is international, transcending national boundaries and language barriers. It knows no politics, dogma or creed. More than a code of ethics, it has all the ingredients for a successful life in every way. IT CAN AND WILL WORK IN TODAY’S SOCIETY.
The final test is in the doing. William James, the noted psychologist,once said, “ The ultimate test of what a truth means is the conduct it dictates or inspires.” At the heart of Rotary today is the Four-Way Test, a call to moral excellence. Human beings can grow together. Modern business can be honest and trustworthy. People can learn to believe in one another. At the 1977 RI Convention, James Fish of the US Better Business Bureaus said: “To endure, the competitive enterprise system must be practiced within the framework of a strict moral code. Indeed the whole fabric of capitalistic system rest to a large degree on trust……..or the confidence that the businessmen and women will deal fairly and honestly, not only with each other, but also with the general public, with the consumer, the stockholder and the employee.”
Few things are needed more in our society than moral integrity. The Four-Way Test will guide those who dare to use its worthy objectives:choosing,winning and keeping friends; getting along well with others;ensuring a happy home life; developing a high ethical and moral standards; becoming successful in a chosen business or profession; and becoming a better citizen and a better example for the next generation.
Eloquently simple,stunning in its power,undeniable in its results, the Four Way Test offers a fresh and positive vision in the midst of a world full of tension,confusion and uncertainty.
( Adopted from a speech given by Rotarian Darrel Thompson, a member of the Rotary Club of Morro Bay, California)
Dear Rotarians,
More than 80 years ago, in the midst of the Great depression, a Rotarian from U.S.A.devised a simple four part ethical guideline that helped him rescue a beleaguered business. The statement and the principles it embodied also helped many others find their own ethical compass. Soon embraced and popularised by Rotary International, the Four- Way test today stands as one of the organisation’s hallmarks. It may very well be one of the most famous statements in our century odd existence.
Herbert J. Taylor, the author of the test, was a mover, a doer, a consummate salesman and a leader of men. He was a man of action, faith and of high moral principles. Born in Michigan,USA, in 1893, he worked his way through North Western University, Evanston, Illinois. After graduation, Herb went to France on a mission for the YMCA and the British Army welfare service and served in the US navy Supply Corps in World War 1. In 1919, he married Gloria Forbrich, and the couple set up housekeeping in Okalahoma, USA, where he worked for the Sinclair Oil Company. After a year, he resigned and went into insurance,real estate and oil lease brokerage.
With some prosperous years behind him, Herb returned to Chicago,Illinois, in 1925 and began a swift rise within the Jewel Tea company. He soon joined the Rotary club of Chicago. In line for the presidency of Jewel Tea company in 1932, Herb was asked to help revive the near bankrupt Club Aluminum Company of Chicago. The cookware manufacturing company owed $400,000 more than its total assets and was barely staying afloat.Herb responded to the challenge and decided to cast his lot with this troubled firm. He resigned from Jewel Tea, taking an 80% pay cut to become president of Club Aluminum. He even invested $6,100 of his own money in the company to give it some operating capital.
Looking for a way to resuscitate the company and caught in the Depression’s doldrums, Herb, a deeply religious man, prayed for inspiration to craft a short measuring stick of ethics for the staff to use. As he thought about an ethical guideline for the company,he first wrote a statement of about 100 words but decided that it was too long. He continued to work, reducing it to seven points. In fact, the Four-Way test was once a Seven -Way test. It was still too long, and he finally reduced it to the four searching questions that comprise the test today.
Next, he checked the statement with his four department heads: a Roman Catholic, a Christian Scientist, an Orthodox Jew and a Presbyterian. They all agreed that the test’s principles not only coincided with their religious beliefs, but also provided an exemplary guide for personal and business life.
And so, “ The Four-Way Test of the things we think, say or do” was born:
1.Is it the TRUTH?
2.Is it FAIR to all concerned?
3.Will it build GOODWILL and BETTER FRIENDSHIPS?
4.Will it be BENEFICIAL to all concerned?
Profound in its simplicity, the Four-Way test became the basis for decisions large and small at Club Aluminum. But any test must be put to the test. Would it work in the real world? Could people in business really live by its precepts? One lawyer told Herb: “ If I followed the test explicitly, I would starve to death. Where business is concerned, I think the Four-Way Test is absolutely impractical.” The attorney’s concerns were understandable. Any ethical system that calls for living the truth and measuring actions on the basis of benefits to others is demanding. Such a test can stir bitter conflict for those who try to balance integrity and ambition. Sizzling debates have been held in various parts of the world on its practicality as a way of living. There are always some serious minded Rotarians,not to mention skeptics and negative thinkers, who view the Four-Way test as a simplistic philosophy of dubious worth,contradictory meaning and unrealistic aims.The test calls for thoughtful examination of one’s motives and goals. The emphasis on truth, fairness and consideration provide a moral diet so rich that it gives some people “ethical indigestion.”
But at Club Aluminum in the 1930’s, everything was measured against the Four-Way Test. First, the staff applied it to advertising. Words like “better”, “best”, ”greatest” or “finest” were dropped from ads and replaced by factual descriptions of the product. Negative comments about competitors were removed from advertising and company literature.The Test gradually became a guide for every aspect of the business, creating a climate of trust and goodwill among dealers,customers and employees. It became a part of their corporate culture,and eventually helped improve Club Aluminum’s reputation and finances.
One day, the sales manager announced a possible order for 50,000 utensils. Sales were low and the company was still struggling at the bankruptcy level. The senior managers certainly needed and wanted that sale,but there was a hitch. The sales manager learned that the potential customer intended to sell the products at cut-rate prices. “ That wouldn’t be fair to our regular dealers who have been advertising and promoting our product consistently,” he said. In one of the toughest decisions the company made that year, the order was turned down. There was no question that this transaction would have made a mockery of of the Four-Way Test that the company professed to live by. By 1937, Club Aluminum’s indebtedness was paid off and during the next 15 years, the firm distributed more than $1 million in dividends to its stockholders. Its net worth climbed to more than $2 million.
Too idealistic for the real world? The Four-Way Test was born in the rough and tumble world of business, and put to the acid test of experience in one of the toughest times that the business community has ever known. It survived in the arena of practical commerce. In 1942, Richard Vernor of Chicago, then a director of Rotary International, suggested that Rotary adopt the test. The R.I. Board approved his proposal in January 1943 and made the Four-Way Test a component of the Vocational Service program, although today it is considered a vital element in all five avenues of service.
Herb Taylor transferred the copyright to Rotary International when he served as R.I.President in 1954-55, during Rotary’s golden anniversary. Today, more than eight decades since its creation,has the test lost its usefulness in modern society, as some critics maintain? Is it sophisticated enough to guide business and professional men and women in these fast paced times?
Is it the TRUTH? There is timelessness in truth that will always be unchangeable.However, truth cannot exist without justice.
Is it FAIR to all concerned? The substitution of fairness instead of following the harsh principles of doing business at arm’s length has improved rather than hurt business relationships.
Will it build GOODWILL and BETTER FRIENDSHIPS ? Creating a positive energy with love is preferable to creating animosity and hatred. Human beings, by and large are loving and want to co exist peacefully.
Will it be BENEFICIAL to all concerned? This question eliminates the dog-eat-dog principle of ruthless competition and substitutes with the idea of constructive and creative competition.
The Four-Way Test is international, transcending national boundaries and language barriers. It knows no politics, dogma or creed. More than a code of ethics, it has all the ingredients for a successful life in every way. IT CAN AND WILL WORK IN TODAY’S SOCIETY.
The final test is in the doing. William James, the noted psychologist,once said, “ The ultimate test of what a truth means is the conduct it dictates or inspires.” At the heart of Rotary today is the Four-Way Test, a call to moral excellence. Human beings can grow together. Modern business can be honest and trustworthy. People can learn to believe in one another. At the 1977 RI Convention, James Fish of the US Better Business Bureaus said: “To endure, the competitive enterprise system must be practiced within the framework of a strict moral code. Indeed the whole fabric of capitalistic system rest to a large degree on trust……..or the confidence that the businessmen and women will deal fairly and honestly, not only with each other, but also with the general public, with the consumer, the stockholder and the employee.”
Few things are needed more in our society than moral integrity. The Four-Way Test will guide those who dare to use its worthy objectives:choosing,winning and keeping friends; getting along well with others;ensuring a happy home life; developing a high ethical and moral standards; becoming successful in a chosen business or profession; and becoming a better citizen and a better example for the next generation.
Eloquently simple,stunning in its power,undeniable in its results, the Four Way Test offers a fresh and positive vision in the midst of a world full of tension,confusion and uncertainty.
( Adopted from a speech given by Rotarian Darrel Thompson, a member of the Rotary Club of Morro Bay, California)
Herb Taylor
RI President 1954-55
STORY OF THE FOUR-WAY TEST
By Herbert J. Taylor, creator of the Four-Way Test
Back in 1932, the Creditors of the Club Aluminum Company assigned me the task of saving the company from being closed out as a bankrupt organization. The company was a distributor of cookware and other household items. We found that the company owed its creditors over $400,000 more than its total assets. It was bankrupt but still alive.
At that time we borrowed $6,100 from a Chicago bank to give us a little cash on which to operate.
While we had a good product our competitors also had fine cookware with well advertised brand names. Our company also had some fine people working for it, but our competitors also had the same. Our competitors were naturally in much stronger financial condition than we were.
With tremendous obstacles and handicaps facing us we felt that we must develop in our organization something which our competitors would not have in equal amount. We decided that it should be the character, dependability and service mindedness of our personnel.
We determined, first, to be very careful in the selection of our personnel and, second, to help them become better men and women as they progressed with our company.
We believed that “In right there is might” and we determined to do our best to always be right. Our industry, as was true of scores of other industries, had a code of ethics but the code was long, almost impossible to memorize and therefore impractical. We felt that we needed a simple measuring stick of ethics which everyone in the company could quickly memorize. We also believed that the proposed test should not tell our people what they must do, but ask them questions which would make it possible for them to find out whether their proposed plans, policies, statements or actions were right or wrong.
Considerable time was spent in developing four short questions which now make up the Four-Way Test. Here are the four questions:
Is it the truth?
Is it fair to all concerned?
Will it build good will and better friendships?
Will it be beneficial to all concerned?
I placed this little test under the glass top of my desk and determined to try it out for a few days before talking to anyone else in the company about it. I had a very discouraging experience. I almost threw it into the wastepaper basket the first day when I checked everything that passed over my desk with the first question, “Is it the truth?” I never realized before how far I often was from the truth and how many untruths appeared in our company’s literature, letters and advertising.
After about sixty days of faithful constant effort on my part to live up to the Four-Way Test I was thoroughly sold on its great worth and at the same time greatly humiliated, and at times discouraged, with my own performance as president of the company. I had, however, made sufficient progress in living up to the Four-Way Test to feel qualified to talk to some of my associates about it. I discussed: it with my four department heads. You may be interested in knowing the religious faith of these four men. One was a Roman Catholic, the second a Christian Scientist, the third an Orthodox Jew and the fourth a Presbyterian.
I asked each man whether or not there was anything in the Four Way Test which was contrary to the doctrines and ideals of his particular faith. They all four agreed that truth, justice, friendliness and helpfulness not only coincided with their religious ideals, but that if constantly applied in business they should result in greater success and progress. These four men agreed to use the Four Way Test in checking proposed plans, policies, statements and advertising of the company. Later, all employees were asked to memorize and use the Four-Way Test in their relations with others.
The checking of advertising copy against the Four-Way Test resulted in the elimination of statements the truth of which could not be proved. All superlatives such as the words better, best, greatest and finest disappeared from our advertisements. As a result, the public gradually placed more confidence in what we stated in our advertisements and bought more of our products.
The constant use of the Four-Way Test caused us to change our policies covering relations with competitors. We eliminated all adverse or detrimental comments on our competitors’ products from our advertisements and literature.
When we found an opportunity to speak well of our competitors we did so. Thus, we gained the confidence and friendship of our competitors.
The application of the Four-Way Test to our relations with our own personnel and that of our suppliers and customers helped us to win their friendship and good will. We have learned that the friendship and confidence of those with whom we associate is essential to permanent success in business.
Through over twenty years of sincere effort on the part of our personnel, we have been making steady progress toward reaching the ideals expressed in the Four-Way Test. We have been rewarded with a steady increase in sales, profits and earnings of our personnel. From a bankrupt condition in 1932 our company has paid its debts in full, has paid its stockholders over one million dollars in dividends and has a present value of over two million dollars. All of these rewards have come from a cash investment of only $6,100, the Four-Way Test and some good hard working people who have faith in God and high ideals.
Intangible dividends from the use of the Four-Way Test have been even greater than the financial ones. We have enjoyed a constant increase in the good will, friendship and confidence of our customers, our competitors and the public and what is even more valuable, a great improvement in the moral character of our own personnel.
We have found that you cannot constantly apply the Four-Way Test to all your relations with others eight hours each day in, business without getting into the habit of doing it in your home, social and community life. You thus become a better father, a better friend and a better citizen.”
From: http://www.charlotterotary.org/100fourwaytest.html
By Herbert J. Taylor, creator of the Four-Way Test
Back in 1932, the Creditors of the Club Aluminum Company assigned me the task of saving the company from being closed out as a bankrupt organization. The company was a distributor of cookware and other household items. We found that the company owed its creditors over $400,000 more than its total assets. It was bankrupt but still alive.
At that time we borrowed $6,100 from a Chicago bank to give us a little cash on which to operate.
While we had a good product our competitors also had fine cookware with well advertised brand names. Our company also had some fine people working for it, but our competitors also had the same. Our competitors were naturally in much stronger financial condition than we were.
With tremendous obstacles and handicaps facing us we felt that we must develop in our organization something which our competitors would not have in equal amount. We decided that it should be the character, dependability and service mindedness of our personnel.
We determined, first, to be very careful in the selection of our personnel and, second, to help them become better men and women as they progressed with our company.
We believed that “In right there is might” and we determined to do our best to always be right. Our industry, as was true of scores of other industries, had a code of ethics but the code was long, almost impossible to memorize and therefore impractical. We felt that we needed a simple measuring stick of ethics which everyone in the company could quickly memorize. We also believed that the proposed test should not tell our people what they must do, but ask them questions which would make it possible for them to find out whether their proposed plans, policies, statements or actions were right or wrong.
Considerable time was spent in developing four short questions which now make up the Four-Way Test. Here are the four questions:
Is it the truth?
Is it fair to all concerned?
Will it build good will and better friendships?
Will it be beneficial to all concerned?
I placed this little test under the glass top of my desk and determined to try it out for a few days before talking to anyone else in the company about it. I had a very discouraging experience. I almost threw it into the wastepaper basket the first day when I checked everything that passed over my desk with the first question, “Is it the truth?” I never realized before how far I often was from the truth and how many untruths appeared in our company’s literature, letters and advertising.
After about sixty days of faithful constant effort on my part to live up to the Four-Way Test I was thoroughly sold on its great worth and at the same time greatly humiliated, and at times discouraged, with my own performance as president of the company. I had, however, made sufficient progress in living up to the Four-Way Test to feel qualified to talk to some of my associates about it. I discussed: it with my four department heads. You may be interested in knowing the religious faith of these four men. One was a Roman Catholic, the second a Christian Scientist, the third an Orthodox Jew and the fourth a Presbyterian.
I asked each man whether or not there was anything in the Four Way Test which was contrary to the doctrines and ideals of his particular faith. They all four agreed that truth, justice, friendliness and helpfulness not only coincided with their religious ideals, but that if constantly applied in business they should result in greater success and progress. These four men agreed to use the Four Way Test in checking proposed plans, policies, statements and advertising of the company. Later, all employees were asked to memorize and use the Four-Way Test in their relations with others.
The checking of advertising copy against the Four-Way Test resulted in the elimination of statements the truth of which could not be proved. All superlatives such as the words better, best, greatest and finest disappeared from our advertisements. As a result, the public gradually placed more confidence in what we stated in our advertisements and bought more of our products.
The constant use of the Four-Way Test caused us to change our policies covering relations with competitors. We eliminated all adverse or detrimental comments on our competitors’ products from our advertisements and literature.
When we found an opportunity to speak well of our competitors we did so. Thus, we gained the confidence and friendship of our competitors.
The application of the Four-Way Test to our relations with our own personnel and that of our suppliers and customers helped us to win their friendship and good will. We have learned that the friendship and confidence of those with whom we associate is essential to permanent success in business.
Through over twenty years of sincere effort on the part of our personnel, we have been making steady progress toward reaching the ideals expressed in the Four-Way Test. We have been rewarded with a steady increase in sales, profits and earnings of our personnel. From a bankrupt condition in 1932 our company has paid its debts in full, has paid its stockholders over one million dollars in dividends and has a present value of over two million dollars. All of these rewards have come from a cash investment of only $6,100, the Four-Way Test and some good hard working people who have faith in God and high ideals.
Intangible dividends from the use of the Four-Way Test have been even greater than the financial ones. We have enjoyed a constant increase in the good will, friendship and confidence of our customers, our competitors and the public and what is even more valuable, a great improvement in the moral character of our own personnel.
We have found that you cannot constantly apply the Four-Way Test to all your relations with others eight hours each day in, business without getting into the habit of doing it in your home, social and community life. You thus become a better father, a better friend and a better citizen.”
From: http://www.charlotterotary.org/100fourwaytest.html
