Being ethical in business is not only common sense, it makes business sense as well.
Thanks to many social and technical shifts, this is now more important than ever as we now live in a hyper-connected and transparent world.
No matter if you run a huge corporation o,r a little home business from your garage running a business, unethical behaviour is sure to set you up for failure. The key result being its affect on retention, retention of staff and customers the two key assets of any business.
Having ethics in business is not another thing you need to consider as an entrepreneur, it’s a critical core element of what sets you apart and keeps you in business.
The groundswell shift of power over the last 10 years from brands to consumers means that sites like Twitter, Whirlpool, Facebook and Glassdoor can affect the key asset in your business, your brand’s reputation.
In a world where a brand report is only a few keystrokes away, you have no choice but to accept this and put ethics in front of most other priorities.
Why do some entrepreneurs overlook ethics?
But if ethics is so important, why do so many entrepreneurs overlook it?
One of the reasons is because they often have other priorities, such as business ideas, marketing, and financial matters, to consider.
However, business ethics have a more powerful influence on the existence of a business operation than most entrepreneurs think. They can create a positive image of a business that boosts the growth and sales by increasing consumer trust.
On the other hand, breaching business ethics could create serious damage, causing customers to turn their backs on a business and let others know about the bad experience. Whilst most entrepreneurs are aware of the importance of business ethics, many feel it is difficult to demonstrate on a daily basis. So what can you do to bridge the gap and be more ethical?
Discussing ethics with Con Georgiou
To gain a deeper insight into this topic, I recently spoke with serial entrepreneur Con Georgiou. He was the co-founder of Velteo, a company that helped intergrade ethical cultures with technology for some of the largest organisations in the country.
Velteo’s high performance culture and ability to innovate well ahead of the market led to its ultimate success when an overseas competitor bought the business.
Georgiou now spends majority of his time investing in new start ups and advising other companies on matters related to ethics, corporate culture, compliance and leadership.
He believes the only way to sustainably out-compete now is to out-behave, ethically. Unless your venture prioritises an ethical culture, you will spend more time and money on compliance, rules and processes without the desired outcome.
Get this right and you have a venture that creates market and talent gravity.
Answer these five questions to help you be an ethical entrepreneur
1. How we pursue
Is your venture driven by short term goals or pursuit of a legacy? Do you enforce regulatory and legal requirements or engaged proactively to prevent ethical issues?
2. How we recognise
Do you create a culture of obedience and conformity or, enable your team to pursue satisfaction in achieving the mission? Is the venture operating on Fear or Purpose?
3. How we relate
Is the venture operating on suspicion and penalties or on mutual collaboration with a commitment to openness and growth? Is it based on a group of followers or on a team of leaders?
4. How we behave
Is the venture structured in silo’s or, integrated with high levels of trust? Are staff behaving according to rules or are they values and principles oriented?
5. How we know
Is access to information Hoarded or on a ‘need to know’ basis? Or, is the venture committed to an open and transparent operating system?
The ethical, self-governed organisation
Answers to the above will determine if your venture is governed by blind obedience or, is self governed.
Self governed organisations have a higher level of engagement, ethics and performance due to their open, peer based and values aligned culture. This inevitably increases returns and will outcompete organisations that do not treat culture as their #1 strategy.
Building a positive image in the public sphere helps your company unlock future opportunities and avoid intense public scrutiny during periods when your firm may struggle.
Most business people do not take a keen interest in implementing business ethics. Most of them think that making profit is the most important thing but as they realise later, no matter how hard they try, they do not achieve their objectives.
The many scandals that have affected businesses, companies and entire industries are cautionary tales with the moral being that the role of ethics in business must take centre stage.
Alex Pirouz is an Entrepreneur, Author and Business Mentor who assists companies successfully start, grow and exit their business. Connect with Alex on LinkedIn