Very early in my career, I had a character building event that I will not soon forget. I was a category manager at the time for a somewhat sizable retailer when our company President suggested that it may not be a bad thing if we overstated our reporting of rebates owed to us from a Fortune 500 company.  I declined based on my twenty something ideology, and perhaps ignorance with how the world really worked. Within two months I resigned and took a job with a vendor.

The last 60 days provide an interesting contrast in principle based leadership, and the affect it can have on customers, employees and branding. As Toyota’s troubles deepen, its President’s admission that the company lost sight of its values is somewhat startling.  Evidently, a zeal for cost cutting and competitive advantage may have triggered a chain of events that has significantly eroded shareholder value.

In a stunning contrast, Google announced this week that it would not comply with China’s censorship rules, and had shifted users to a Chinese version of its search engine housed on servers in Hong Kong.  Facing the real threat of losing access to the world’s largest market would seem like strategic suicide.  Yet the decision was clearly made on principle, Google’s commitment to uncensored information trumped strategy, revenue and access to hundreds of millions of users. Founder Sergey Brin, who grew up on totalitarian Russia described China’s stance as “quite troubling.” Google has drawn the line in the sand and sent a message to the world that some customers may not be worth having when your values are called into question.

Conversely, China is a nation who wants the fruit that capitalism can bear, but is not willing to align with free market values, which will only limit growth in the long term.  Many feel threatened by China, as we were by the Japanese in the 80’s. Yet as was proven in Russia and elsewhere in Europe, capitalism cannot work in its purist form without the rule of law (contracts must be enforceable and criminals prosecuted) or the preservation of intellectual capital.  While the U.S. may have suffered a setback, our economy is still based on values protected by our constitution (someone remind Congress) that have stood the test of time. 

So raise a glass to Google who reminds us that we have to make tough choices in our businesses, and they may not be the ones that are politically tenable, convenient or most profitable.  There is a reason why Google has exploded on to the scene as one of the world’s most valuable and powerful brands; people want to feel a part of something bigger than themselves. To have the vision and discipline to remain focused on your values demonstrates the best that capitalism has to offer.