Business Growth – Ethical Best Practices, Part One

“If you build that foundation, both the moral and the ethical foundation, as well as the business foundation, and the experience foundation, then the building won’t crumble.” Henry Kravis

In light of the devastating impact of Enron and Tyco, the disappointing baseball steroid scandal, NE Patriots’ Spygate as well as a plethora of political missteps, we are exposed to many negative models of ethical behavior. Is it doing whatever you need to without breaking the law? Is it about getting away with what you can? If everyone else does it, does that make it right for you? Do businesses generally strive to be ethical? Is ethical behavior so gray today that it has become difficult to define and implement?

Often, greed takes precedence over best practices. In the long run, a business or individual is exposed, as in the examples previously mentioned. Business owners need to articulate the standards they want to adhere to in running their companies.

In part one of this discussion, let’s explore why a business should want to develop ethical standards:

o Ethics results in trustworthiness. All relationships, business and personal, are built on trust. The more honest and upfront you are, the higher the level of trust.

o Owners must demonstrate honesty. Don’t expect ethical employees if you don’t serve as a model yourself. Create policies that require specific behavior from employees, vendors and partners. Include consequences for violators: then enforce them. Make sure you keep an even higher standard for yourself.

o Referrals come from satisfied customers. Make sure problems are resolved quickly and without too much effort for the customer. It is important that you keep promises and fix problems to the customer’s satisfaction, even if there is a cost to you. That will ensure they will say positive things about your business to others.

o Reputation is an important contributor to a business’s longevity. A great reputation comes from providing consistently positive experiences over time. Treating customers, vendors and employees well and with respect will result in added loyalty. Loyalty is scarce, do what you can to preserve it.

o Socially conscious businesses are in vogue. Walk the talk by being involved in socially important issues. Conserve energy, use recyclable products and help preserve the earth for the next generation. Donate time and money to causes important to you. Such behavior will speak volumes about your personal and business values.

Instead of complaining about how hard it is to trust individuals and businesses, make your business one that can be trusted. One by one we can start to shift the culture of greed and one-upmanship to one of ethical standards and meaningful relationships. In the next issue, I discuss best practices.

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