The Ethics of Success
By John Ingrisano on Apr 11, 2007 in Feature
Honesty pays. It’s as simple as that. Unless you’re in business to make a one-shot killing and then plan to take the money and run, honesty will always be the best policy.
Business owners who fail to play straight — whether it is with their employees, their suppliers or their customers — eventually undermine the value of the business by driving away customers and honest employees. If you short shipments, pad bills, accept inferior products or services, lie to vendors or to employees, your business may survive, but it will never reach its fullest potential.
That’s because what goes around comes around. If you treat people poorly, they will eventually do one of two things: They will either walk away from you and refuse to do business with you; or they will wait for the opportunity to pay you back. On the other hand, if you treat people honestly and fairly, they will reward you with loyalty and commitment. No, you may not get rich overnight; however, you will build your business on a solid foundation.
The key ingredient is trust. This is especially true, whether you are dealing with employees or customers, says management consultant Gordon Shea, author of Building Trust in the Workplace. Trust, explains Shea, is the "miracle ingredient in organizational life — a lubricant that reduces friction, a bonding agent that glues together disparate parts, a catalyst that facilitates action. No substitute — neither threat nor promise — will do the job as well."
The same applies to customers and suppliers. People do business with people with whom they feel comfortable. If they believe that they must be ever vigilant to prevent you from picking their pockets at the first opportunity, they will look to do the same to you.
The cream rises to the top. If you deal honestly with all people — and insist that your employees do the same — you will eventually end up surrounded by a network of reliable, honest people who trust you… and upon whom you can rely.
To promote ethical practices in your business, keep the following in mind:
? Ethics start at the top. You set the standard and tone of how your business is run. If employees see you cheating customers or cutting corners, they will do the same. But if they see you doing what is right, even when it may cost you a few dollars, they will not only behave the same way, but they will also trust you and give you their loyalty.
? Put the best interests of your customers first. We’re all in business to make money. However, the truly successful business owner understands that, if you take care of your customers, your own needs will be taken care of accordingly.
? Develop a code of ethics for your business. Keep it short and concept-oriented, so it fits on a three-by-five card. Hand out copies to all employees and post it on the bulletin boards and in the restrooms. Then stand behind it.
Footnote: Don’t confuse tough-minded business practices with unethical behavior. Being fair and honest does not mean giving away the store. Far from it. No business can survive unless its owner seeks on a daily basis to get the best value for each and every decision made and dollar spent. But it does means doing so honestly and in a palms-up manner.
Work hard! Make money! Have fun! — JRIngrisano (The Freestyle Entrepreneur)
WORTH READING:
Managing with a Conscience: How to Improve Performance Through Integrity, Trust, and Commitment
Principle Centered Leadership
Building Trust in the Workplace (Ama Management Briefing)
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R. Patrick Sheridan | Apr 11, 2007 | Reply
This is an excellent commentary, John. It looks as though you may have one of my students in my Business Ethics class!
Actually, I’m curious about the Code of Ethics for small business. From my understanding, small businesses usually do not have a written code; they leave that to “big business.”
Regardless, ethics is perceived, I think, to be a major problem for big business. I actually think that the public’s perception of small business ethics is probably pretty positive, though I’ve not seen research to prove that.
When you were an employer, did you actually do the 3 X 5 card thing?
John R. Ingrisano | Apr 12, 2007 | Reply
As an SBO — and I think this goes for most SBOs — ethics is almost an intuitive thing. I know some guys who would only skin you if they could! I also know some who live by a strong Judeo/Christian ethic.
In truth, I have never seen a written statement of ethics. Oh, there was the occasional “code of conduct” that nobody took seriously. What always mattered most was the word from on high, meaning the manager. When a boss said, “We will run this business fair and honestly,” and he actually walked the walk, the employees were mostly eager to do it that way. When the boss was unethical, people struggled, morale plummeted, attitudes and tempers got short, and decent people left.
Bottom line: Leadership sets the tone.
Oh, it has been my experience that all businesses — from tiny to huge — are generally ethical in their business approach. The rare exceptions that make headlines are just that…the exception. Look at Wal-Mart, for example. In spite of some terrible political pressure from misguided do-gooders, Wal-Mart is in fact one of the best run, most ethically managed businesses in the world. — JRIngrisano (The Freestyle Entrepreneur)
R. Willford | Apr 18, 2007 | Reply
I am a Business Ethics student at NICC. I agree fully with your article and that the best policy overall is honesty. Honesty and trust can go a long way, not only in the world of business but in every aspect of life. I believe that all businesses, even the small ones, should have some kind of Code of Ethics. I like the idea of the 3 x 5 card.
John R. Ingrisano | Apr 18, 2007 | Reply
I think the Golden Rule is a good standard of conduct both in business and elsewhere. (And, no, I am not referring the golden rule that says: “he who has the gold makes the rules.”)
The fact is that every successful business owner I know has a strong moral core. And every one who liked to play fast and loose with the rules may have peaked fast…but has always — I repeat, always — crashed and burned eventually. — JRIngrisano, The Freestyle Entrepreneur.
CA | Apr 18, 2007 | Reply
Nice article. One of the few business topics close to my heart. An individual’s morals play a part too. As you say John, if an individual’s concern was only money, then that person would stoop to any extent to loot, steal or use unethical methods.
The true test of ethics is the way a person behaves when no one is looking. As the saying goes “Birds of the feather flock together”. If you do hold yourself to high moral values, you will attract only such individuals around you, and vice versa.
Julie Anderson | Apr 18, 2007 | Reply
I am also in the Business Ethics course at NICC. I just wanted to comment on the footnote in your article. This has been the most eye opening part about being in an ethics class. I thought before that it was always about the people and if it became about the money that the business owner was just greedy. I see now that you are absolutely right when you say “don’t confuse tough-minded business practices with unethical behavior.” I have certainly been guilty of this, but now have a much more open mind about the need for business to make a profit and that this is indeed being ethical and responsible. Great article. Thanks!
John R. Ingrisano | Apr 18, 2007 | Reply
Julie, I am glad you enjoyed and benefited from the article. The concept of ethics is one of the most misrepresented ideas in this country. Too often, we hear about Enron and other poor examples of capitalism. They are not the norm.
Most business owners and managers are not greedy or anti-environment. (They have children, too, and want to protect the earth just as much as many greenies.) Some are good, decent folks. Some are not. At the very least, high standards of ethics just make good business sense.
Finally, business should be practical. If I need an employee, I will hire the best one for the position, without regard for sex, race or any other factor. I want to make a profit. If I don’t, everyone loses.
I had a business in the Caribbean on St. Thomas for a brief period of time. My biggest mistake was in hiring relatives who thought the job was supposed to be a walk on the beach. In the end, because I made poor business decisions and turned my company into a welfare state for people I could not afford to keep, we went under. Who got hurt? Everyone — I lost a small fortune, my employees lost their jobs, my suppliers lost a valued customer. — JRIngrisano (The Freestyle Entrepreneur)
Kayla Steinbronn | Apr 23, 2007 | Reply
I am in the Business Ethics course at NICC. Reading your article was very interesting and I agree that honesty is the best policy. If a person or business is not honest, they just have to cover up lies and this is not a way to be successful. Putting the best interests in your customers first is another good point that I read. Although we all want to make a profit, the customer should come first. Great article. Thanks.
Eric Schmitt | Apr 23, 2007 | Reply
This article was very interesting because it shows that good ethics can lead to success. I liked the code of ethics because it shows everyone what the owner expects from people involved in the business.
grand-gambler.com | Mar 31, 2010 | Reply
Well written! I would think a lot …