6 Tips on building an ethical company: Actions speak louder than words

Are you ethical? It’s a hard question to ask yourself, but you need to dig deep and try and view yourself as others would – that is, in the most honest light possible. Few people – if any – will say they are unethical or have no moral fortitude. But we all know that these kinds of – as they say in Animal House, “morally casual” – people are out there. Your business ethics will be tested throughout your journey as an entrepreneur, and the way in which you react to situations and problems will determine your reputation as a company. It’s important to set your standards from the start. First, let’s examine the basis of being an ethical leader. Take this description from the Institute for Ethical Leadership: "The ethical leader understands that positive relationships are the gold standard for all organizational effort. Good quality relationships built on respect and trust-not necessarily agreement, because people need to spark off each other-are the single most important determinant of organizational success. The ethical leader understands that these kinds of relationships germinate and grow in the deep rich soil of fundamental principles: trust, respect, integrity, honesty, fairness, equity, justice and compassion. Stephen Covey calls such principles the “laws of the universe.” The ethical leader knows that by acting in accordance with these laws, living in harmony with these basic principles, human enterprise flourishes and is sustained. "Early last century the German philosopher and theologian, Martin Buber, described these successful relationships as “I-Thou” relationships, in which people recognize the intrinsic worth and value of others and treat each other with sincerity and respect. In the language of the 18th century German philosopher, Immanuel Kant, this is the principle of always treating the other person as an end and never merely as a means to serve your own personal interests. The ethical leader moves and acts in a world of I-Thou relationships, where in any situation, to the fullest extent possible in the circumstances, the intent is to honor and respect the worth of the other person. "In this way the ethical leader embraces the act of service as described by Robert Greenleaf in his concept of “servant leadership.” The effective leader acts as a servant to others engaged in the enterprise, not in any sense of inferiority, but as one who empowers others to achieve success by focusing on right action. The ethical leader understands the truth of our interconnectedness to each other, and that it is through our willingness to serve each other that we release our combined energy and potential to benefit the greater good of which we are all a part." Second, here are 6 tips to build and maintain an ethical company: 1. Actions speak louder than words. While it’s important for your employees to understand your company’s rep as an ethical firm, make sure that reputation – as well as your community-giving activities – don’t wallow behind the scenes. It may sound (somewhat) self-serving, but you should make sure your actions are visible to customers, who have the final say in your small business’ reputation and overall perception. They’re the ones giving referrals, and knowing you sail an honest ship is of utmost importance. Announce your corporate-giving activities in news releases. Post them on your Web site or Twitter page. Mount banners or certificates from your supported charities inside your office, like we do in the Capital TechSearch board room. Heck, even go as far as pointing them out to clients when they visit. If your clients are ethical too, they’ll give you credit where due. 2. Ethics must start at the top. You set the bar for work ethic and moral ethic at your company. Don’t work hard? Neither will your employees. Moral standards questionable? Your employees will either knowingly follow, or leave the business (if they know better). 3. Always keep your door open. Establish an office environment where employees can voice concerns, including issues with company policy, without fear of recrimination. We see examples every day where people blow the whistle – ahem, Enron anyone? – but no one should have to resort to that. 4. Don’t assume employees know “right” and “wrong.” Clearly communicate from the beginning how you expect them to behave when it comes to internal work and dealing with clients. Set and manage these expectations. 5. Make sure you reward people on the basis of exhibiting company values. Be it money (good) or a burrito (dare I say better?) 6. Deal decisively and immediately with breaches in conduct. It is important to make sure you know the whole, two-sided story before you confront unacceptable ethical behavior. Most importantly, don’t ever compromize your ethics. For a Bedtime Story on the business lessons we learned about not compromizing your ethics, read Chapter 5 of 15 Bedtime Stories That Keep Entrepreneurs Awake at Night. And, remember, if you ever have any doubt on what to do in a situation, always take the high road for lasting success.


David Ingram is the founder, president, and CEO of Capital TechSearch, headquartered in Richmond, Virginia, and author of 15 Bedtime Stories That Keep Entrepreneurs Awake at Night. He has a deep understanding of -- and great empathy for -- the business challenges that his fellow entrepreneurs face. Capital TechSearch was honored in 2008 and 2009 on the prestigious Inc. 5000 list of the fastest growing companies in America. The company website is http://CapitalTechSearch.com and David blogs at h...

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