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I think it goes deeper than the foundation. Here's the analogy I use in one of my seminars: The "foundation" of a good business is a worthwhile purpose. The ethics and integrity of the owner/manager are the "land beneath" the foundation.

If the owner/manager is unethical or lacks integrity, it's like building a house on sand or on a fault line -- it can be done, but a lot of specialized and costly engineering will have to be integrated into the structure itself. Likewise, a business with a dishonest owner or unethical management will spend a lot of time and money "engineering around" those shortcomings. Merely "hiding" them doesn't work for long. The structure will eventually collapse.

In contrast, having ethical ownership/management is like building a house on solid bedrock -- it will support a wider array of plans and be less expensive to construct and maintain. Even so, you can't just lay a few cinder blocks in the dirt and build a big mansion on top of them -- a good foundation is essential. That foundation, for a business, is a worthwhile mission or purpose.

Most small businesses don't fail because the owner is unethical or lacks integrity (a bad person). They fail because the business was built without a "blueprint" (bad planning) or because there was no compelling reason for the business to exist in the chosen marketplace (bad foundation). In the rare cases when an ethical issue does bring down a business, it's big news, like an earthquake.

Business owners and managers are human -- we make mistakes (which means no matter how strong our ethics and how solid the ground, our businesses will experience tremors and "settling" over time). When there's a good foundation (worthwhile purpose), the result may be some ugly cosmetic damage like cracks in the walls, but the structure itself will remain sound and functional -- our business will survive. When we (as owners) handle something badly or behave in a way that someone might consider unethical, the fact that the business is fulfilling a worthwhile purpose for its customers, employees, and other stakeholders is what saves us -- and gives us a chance to repair the damage and continue on. (But if people think they can do without us, or if we repeatedly fail to address the problem, we're toast!)

Wow that was a brilliant response.

What happens when you are business that has all of that, but has had problematic interactions with other companies that were unethical? I am just curious how you would extend your analogy to that instance.