7 Guidelines for Entrepreneurs to Do the Right Thing, Whatever That Means
Most entrepreneurs I know want to do the right thing for their businesses, as well as themselves, but they are not always sure what that means. Does it mean the right thing from a customer perspective, societal impact, maximizing business returns or personal benefit? The good news is that none of these need be mutually exclusive, according to recent studies of market trends.
Companies that have focused on sustainability and social responsibility, in addition to ethical business practices, such as Patagonia and Zappos, claim more than three times the return of average companies over the last 10 years. Another article indicates that 80 percent of customers continue to base some portion of their buying decisions on their perceptions of the company’s ethics.
In reality, even if you and your business are doing the right thing, the challenge is to make it visible and convince customers and people inside your company that you have personal integrity, strong moral values and always act ethically. Here are seven specific actions I recommend to get the right message across:
1. Consistently communicate values before goals.
Make it evident that your values drive your business goals, rather than goals driving values. Communicate personally and interactively with your constituents, both inside and outside the organization. Don’t allow anonymous and impersonal messages to go out, and always ask for feedback.
2. Build an organizational culture based on ethics.
This starts with hiring the right people, and giving them the training and support they need on a regular basis. It also means rewarding people for making the right decisions on social responsibility, sustainability and adherence to ethics. You must be the model of the culture you want.
3. Manage your company based on long-term priorities.
By demand, entrepreneurs are crisis managers, and can be busy reacting 24 hours a day to urgent short-term issues. Entrepreneurs who do the right thing are able to balance their priorities, including both business and personal, and focus their priorities on long-term goals and values.
4. Set the bar high on standards.
Doing the right thing means never accepting “good enough” or making excuses for lapses. Apply the same high bar to product quality, employee satisfaction, social responsibilities and customer service. Don’t let day-to-day demands take the reins and drag you off course.
5. Provide leadership to your team for doing the right thing.
It’s impossible to train the team on every possible contingency, but it is possible to set the right tone and define ethical guidelines. This is real leadership, and requires constant communication, motivation, recognition and accountability. Be a coach, rather than a dictator.
6. Personally collect and accept customer and employee feedback.
These interactions cannot be filtered by others, or brushed off as not representative of reality. Great business leaders always find the time to talk directly to both customers and employees, and realizes the importance of both to the long-term impact of the business.
7. Continually refine your values and goals based on changes in the world.
Society and every marketplace is changing more rapidly these days, so it’s easy to get distracted and out of tune with reality. Be especially sensitive to emerging “quality of life” issues for customers, employees and yourself, and tune your business focus to address these.
The worst assumption you can make is to assume that doing the right thing will always come naturally, and that all your constituents will see and understand what your intent is. It’s important to learn from peers, advisors and mentors that the required mindset must be combined with specific actions, including the ones outlined above, before value can be harvested.
How long has it been since you made a real assessment of your business's culture and the model you project? Make doing the right thing your competitive edge today, and the key to your long-term success. It’s a lot more fun and satisfying than fighting the latest crisis every day.