Goodwill Hunting

Put A Moral In Your Story

Deciding to embrace ethics is one thing. Figuring out how to incorporate ethics into your business is another. Yet improving your company's moral posture doesn't have to be painful or complicated. Here are some steps to get you started:

  • Set priorities. The first and perhaps simplest thing you can do to delineate your company's values is to create a clear mission statement. "Identify your stakeholders," says ethicist Hartman. "Is the customer your highest priority? Or do your employees come first?" Down the road, this kind of distinction might help you choose between, say, lowering prices (in consideration of customers) or taking a cut in profits (in favor of employee benefits).

Wilson included the following words in his company's mission statement: "We put social responsibility in front of profit." Although this is not exactly a specific plan of action, it guides many of the company's decisions. "Whenever we have to make a tough judgment, we refer to our mission statement," he says. "Putting things down on paper helps set in stone what your standards are."

  • Use company policies and procedures to bolster your case. If you don't already have a clear and specific policy manual for your employees, create one--and make sure ethical issues such as sexual harassment and employee theft are addressed. Beyond the basics, look for procedures that will help guide your company through the kinds of dilemmas it faces daily.
  • Get advice. Don't try to reinvent the wheel. Ask one of your industry's trade associations if it has a code of ethics; the information it contains may help you establish your company's policies and procedures. At the very least, it will highlight important issues to consider.

When faced with an individual dilemma, Wilson consults fellow business owners at the Greater Houston Partnership, which is similar to a chamber of commerce. "Sometimes you don't know what's best," Wilson says. "That's when it helps to turn to your peers."

  • Foster an ethical work environment. As you work to clarify your company's ethical positions, don't forget to walk the walk. Bear in mind that unwritten, unspoken messages can be powerful, too.

Jack Donner, owner of America's Best Self Storage in Torrance, California, believes one of the best ways to encourage ethical behavior is to treat employees well. "Maintaining an adversarial relationship between yourself and your employees is very shortsighted," Donner says. "[If that's your approach,] you'll get compliance only when fear or the threat of punishment is there. Otherwise, you won't."

Thus Donner's ethical agenda begins with fair terms of employment. "I'm here to help the employees, and they're here to help me," says Donner. "I pay top wages. I make my employees partial owners of the business by offering them a commission structure. I expect them to operate with the highest degree of ethics, but I'm also interested in functionality, not theory. If you hire unethical people or you don't pay them enough, people are going to do what's in their best financial interest."

  • Provide a forum. No matter how thorough you are, predicaments will arise and violations will occur. Toward that end, make sure employees have a set procedure for raising concerns. And consider soliciting their advice on decisions you're making; they'll often have perspectives you don't.
  • Avoid hypocrisy at all costs. Suppose you don't care about your employees, and you have no compunction about lying to clients. You lay off staffers on a whim, cook the books at tax time, and, worst of all, you have no interest in changing your ways.

Whatever you do, don't promote yourself to clients and staff as a paragon of virtue. Don't put glorious words about social responsibility in your mission statement. Don't institute sweeping reforms throughout your company. You'll only create bitterness among your staff and make a mockery of your authority.

"People are a lot more observant than you realize," says Wilson. "You've just got to be [ethical]--you can't lie about it."

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This article was originally published in the July 1998 print edition of Entrepreneur with the headline: Goodwill Hunting.

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