The wisdom of Aristotle, the CEO

PAUL J. VOSS poses this question: In a world saturated with generics and commodities, how can anyone hope to build brand equity and keep their product, good, service, or Catholic faith from becoming a commodity of lesser value? For his in-depth answer, he turns to Aristotle (384-322 B.C.), whom he rightly tags as one of the world’s first CEOs . . . .

Paul J. Voss

Lipitor, a popular medication used to treat high cholesterol, might be the most successful prescription drug in history. Total revenue since it was approved in 1996: $125 billion.

However, the patent for Lipitor expired in 2011, creating the opportunity for a generic and much less expensive competitor. Once introduced into the market, generics tend to become very popular very quickly, destroying most of the value of the name brand drug. According to the Wall Street Journal, the executives at Pfizer wanted to fight that erosion. They hoped to keep 20% of the market share, readily conceding a loss of 80%! Pfizer amassed $200 million for an advertising campaign to retain current patients, but after spending $87 million, they abandoned the effort when well over 95% of patients opted for the generic alternative.

The business lesson here is quite clear: Losing “brand equity” can cost millions of dollars. The rise of generic alternatives (in a wide variety of sectors) results from the impressive drift toward commodity. Commoditization occurs when goods or services lose their differentiation across the supply base. In other words, something becomes a commodity when one cellphone, accountant, or tire store is just like the others in terms of quality and price. In a world saturated with generics and commodities, how can anyone hope to build brand equity and keep their product, good, service, or Catholic faith from becoming a commodity of lesser value?

Businesses spends millions each year trying to answer that question and scores of books by distinguished professors from elite business schools will offer solutions and new-fangled approaches. Hundreds of millions of advertising dollars will attempt to create brand loyalty. Yet we might do well to consider the ideas of the Greek philosopher Aristotle as we try to cultivate marriages, friendships, or business relationships that don’t become tired, stale or commoditized.

Aristotle (384-322 B.C.) wrote his classic text Rhetoric to demonstrate the most effective manner of persuasive writing and public speaking. Without much difficulty, his rubric can be applied to the creation of family, faith, friends and business. Aristotle highlighted three distinct appeals that one can use to persuade others and thus to mitigate the drift toward commoditization.

Ethos refers to the ethical character of the leader or employee. Is the person worthy of our trust? Does the employee have a professional appearance? Does the company leadership appear honest and reliable? If the audience does not trust the character of the firm, obvious difficulties follow. What is your reputation in the office, firm, company or home? How can you enhance that reputation? Do you have “executive presence?” What is your reputation within the Church and your local parish?

Logos is the appeal to logic and reason. Logos often refers to the type and quality of the evidence presented by the speaker. Logos measurements usually take the form of a number: revenue, sales, batting average, profits, grade point average, etc. Is the evidence factually correct? Incorrect evidence and suspect facts will, of course, cause credibility problems. If the evidence cannot be trusted, the speaker cannot be trusted. Appeals to the logos require research and hard work. In short, if you have no case — no compelling argument to make — your presentation will suffer accordingly.

Pathos is an appeal to the emotions and disposition of the audience. All effective public speakers (and sellers) must consider the intended audience. Clearly, speaking about football to your coworkers requires a different strategy than talking about products to your clients. Failure to understand or consider audience often leads to disaster, rendering any public presentation ineffective. How well do you “manage up”? Who is your primary audience? Who is your secondary audience? How well do you evangelize your faith?

Note that each appeal requires the application of virtue — especially the four cardinal virtues of prudence, justice, temperance and fortitude — articulated by Aristotle in his famous Nicomachean Ethics. Creating a lasting brand, service, product, or relationship requires virtue — ethical virtue — in order to flourish and sustain.

St. Thomas Aquinas (1225-1274) ultimately reconciled the philosophy of Aristotle (ratio) with revelation in the Bible (fides) in order to create the intellectual fabric of the Catholic faith. Aristotle’s insights into the requirements for effective persuasion remain true today in a hyper-connected world where information is readily available to potential consumers. Anyone attempting to create a career, sell a product, or enrich a marriage would be wise to employ the wisdom of Aristotle, the world’s first philosopher-CEO.

PAUL J. VOSS, PH.D., is president of Ethikos, a professional organization offering ethics training, and an associate professor of literature at Georgia State University.