An article headline caught my eye the other day on BRW online: “Creating an ethical culture while growing your business”.
One of the challenges in growing a business is how to embed your organisational values and ethics in everything your business does – including policies, procedures, recruitment, expected behaviours, performance reviews, job descriptions, the list goes on.
And research has clearly informed us that businesses that succeed in the long run are those that have a strong, deep sense of purpose beyond just making money, and this purpose is backed up by supportive values embedded into the organisation culture that are lived and breathed every day. Conscious Capitalist businesses perform up to 10X better than conventional, profit-maximising companies.
So at first glance I thought this article had an important message to communicate, however the opening paragraph threw me: “Most start-ups want their business to be ethical. But when the focus is on getting the business off the ground, conscious engagement with ethics can seem like a luxury.”
Having started up my own business Whole Kids over 10 years ago, I would agree with the sentiment of this sentence. During the start up stage where cashflow may be tight, resources may be low (or maybe the only resource is you!), customers may be hard to find, or competitors may not be playing by the rules, your focus may be distracted by the pressures of the business to just be able to operate day to day.
However, in my opinion, this is the most critical stage of the business in terms of setting the culture and reinforcing why you went into business in the first place. Sure, if your aim in setting up was to make as money as you can, then go-ahead and create a culture that is money-focused, profit-centred and may contribute little or nothing at all to the betterment of your customers, suppliers, communities or the environment. But whatever you are selling, please don’t knock on my door – I won’t be buying from you.
I don’t accept that during this critical start-up stage that “conscious engagement with ethics” is a luxury. Indeed, your core purpose, values and ethics should be consciously engaged at all times during the stage (and all stages after) because it will guide you in how to make the best decisions for your business.
If you decide that ethics are a luxury to be traded-off for other decision-making criteria such as increasing sales or profits but you still hold your company up to be an ethical or socially responsible business, then the slope gets very slippery from then on. As a business leader, your decisions, behaviours, actions and words send out clear signals to your staff, suppliers, customers and other stakeholders as to what kind of decisions and behaviours you find acceptable or unacceptable.
If you start off from the view that ethics are a luxury (or a luxury in certain situations), then this will be the yardstick by which your company’s values and brand will be measured. Importantly, it will underpin the level of trust (or mistrust) both inside and outside your business.
Do you really want to create a business that has low levels of trust and trades off ethics and values for business outcomes? Do you really want to be known as a business leader that compromises ethics and values for short-term gains or financial success?
As mentioned, research has shown you can achieve both – an ethical, values-driven business and financial success. So why even entertain the prospect at the start that your ethics are negotiable and suspect?
We need more businesses and business leaders with higher standards of ethics and conscious leadership – not fewer.