Be an Ethical Entrepreneur, Marketer, and Business Builder

All Great Businesses are Inherently Moral

This fact has been proven time and time again by modern business and human psychology experts.

No business that exists exclusively for profit, without the advantages of corporatism or cronyism, will ever be very successful and certainly not over the long-term.

This is not my opinion. This law of business is as well established as the laws of gravity.

By a great business I very simply mean a profitable enterprise that lasts for an extended period of time. An unethical business can fool people for a short time however it cannot fool them for very long, particularly in the age of social media.

Business experts from a few decades ago called this vision and mission. Brad Sugars in Instant Team Building insists on vision, mission, and culture points. Tony Hseih in Delivering Happiness calls on vision and culture statements. Mike Michalowicz in The Pumpkin Plan has his immutable laws. Sam Carpenter references his Rules of the Game in Work the System.

Jim Collins in Good to Great discusses the requirement of all great businesses to have a “Hedgehog concept.”

One of the primary findings in, Built to Last, that contradicted the teachings of many MBA programs, is that businesses that have survived and excelled over time were often the ones that were centered around a core business concept, not a great product.

Let me summarize a major portion of all of those books very succinctly…

The compass for lasting business success always points you in the same direction.

The compass for long-term business success will always point you in the same direction.

Every great business expert knows that a business MUST be motivated by something more than profit to inspire your team, stay focused and even maximize profits.

If you’re still not convinced, pick up a copy of The Loyalty Effect by Frederick F. Reichheld and read about the numerous studies that have shown that companies who downsize in the interest of short-term profits rarely ever recover and often their stock prices suffer for a very long time. Obviously there are necessary times to downsize and appropriate ways to do so, but to simply improve next quarter’s earnings is not one of those times. As a general rule, downsizing is best treated as a last resort.

In The Millionaire Mind, Thomas Stanley discovered that the #1 thing millionaires attribute to their success is “being honest with all people.” (And 88% of the millionaires he surveyed achieved their wealth through entrepreneurship.)

Marcus Buckingham’s research in First, Break All the Rules: What the World’s Greatest Managers Do Differently demonstrated that pay is not even in the top 5 reasons people stay at or leave a job. Through 20 years of research with 20,000 managers and over 80,000 interviews, he has developed 12 questions that do show what motivates people and pay doesn’t even make the list.

In other words, money is not the primary motivator for people and all businesses are run by people.

Dan Pink takes it a step further in the below video. Through extensive research in the psychology of motivation he shows that for someone to truly excel they need Autonomy, Mastery and Purpose. If your boss, the corporation, or the government is dictating what you should do, there goes Autonomy. If your “hedgehog concept” is to maximize profit, then you’ve thrown Purpose out the window.

A non-crony entity that exists primarily for profit will never be a very successful business and every great business leader knows this. The idea that companies should be immoral is as old as Machiavelli and it was as wrong then as it is now.

If you work for someone who runs an immoral business, start educating them that there is a better, more prosperous way. As a matter of fact, help every business leader and employee you know appreciate the long-term business benefits of running an ethical, moral business.

It’s truly the only path a business can take to succeed over the long-term.

To your ethical business building success,
Bryan

P.S. My team’s number one culture point is Love and we try to live it as best we can. It’s not easy and we don’t always succeed but it is our most core value. I highly recommend you infuse it into your culture.

Your company has a culture. Did you choose it?

Yosemite National ParkIn my last blog I mentioned that if you’re an Ethical Business Builder, but none of your employees are aware of that, who cares? It’s important that you make your whole team aware of the importance of ethics in business.

Obviously your actions are the most important part of being an ethical leader. If you have an “open-door policy” but you’re never around – or you claim that its important that you treat all people with respect, but your team members can hear you flipping out on your vendors on a regular basis as a means of “getting the best deal”, then it doesn’t matter what you write in your ethical policies. The only things important to your team members are the things that you do – not what you say. I’ve read in numerous articles and books that most businesses take on the traits of their founders. Microsoft is like Bill, Apple like Steve, Facebook like Mark, and Google is like its 2 founders…

ALL businesses have a culture. Some are high-energy and highly-competitive like Nordstrom’s and some are more laid-back like your typical start-work-at-noon-and-sit-on-your-bean-bag silicon valley software company. In both of those instances the companies “culture” was deliberately structured to be a certain way. The founders of those companies apparently determined (or it just happened by accident) that the most productive way to deal with their employees was to develop a culture to cater to the type of employee they wanted. This is important because not every person can excel in every environment and company culture. It’s well-known that Nordstrom’s employees either love it there or hate it. The ones who hate it rarely last more than 6 months. That’s the way management likes it. If you’re not going to thrive in the culture they’ve created, then they don’t want you. Does the culture that you’ve developed in your company attract the employees who will excel in your business?

The examples above, however, don’t talk at all about the ethical underpinnings of those cultures. Just like other aspects of culture, if you don’t express your culture, including the ethics that you expect, in writing and then demonstrate through your own actions that you believe in them 100%, then the culture will create itself. Generally that “self-created” culture will come partially from the founder and partially from whatever the other employees think is appropriate. My first encounter with a defined set of “Culture Statements” came from Brad Sugars in his book Instant Team Building and from his entrepreneur masters class. Actually, I can’t think of one other business book or article that has emphasized the importance of defined culture statements.

Culture statements are a series of statements that simply tell your employees and company stakeholders what values and culture your company employs. It’ll probably make more sense if you just read the 12 Points of Culture that I developed for a business I co-founded, cribME!.

12 Points of Culture

  • We treat our customers, colleagues, partners, vendors, and shareholders with respect. In unsettling situations we do our best to empathize with the other side and view the situation from their perspective.

  • We maintain integrity in all interactions. The end never justifies the means. Deliberate lying is never an option. If ever we make a mistake and accidentally make an inaccurate statement we will correct that statement as soon as reasonable.

  • We work diligently to make effective and open communication a high priority by avoiding gossip, harmful sarcasm, and verbal attacks. If we have a question or concern about someone, we strive to ask them directly instead of listening solely to those around them.

  • We are never satisfied with “good enough” and continually strive to improve ourselves, facilities, products, and services to best serve the company stakeholders.

  • The team leaders do their best to provide a healthy and productive environment for their team members to excel at their jobs every day.

  • We are positive toward each other, focusing on exceptional work and constructively critiquing when warranted. We are open to others positive suggestions for improvement.

  • We understand that everyperson we encounter has something to teach us and so will learn from everyone around us.

  • We appreciate that profit is the life-blood of every business and a profitable business benefits everyone in the organization as well as in the communities we serve. We work together to minimize unnecessary expenses and waste to ensure a lasting, profitable business.

  • We strive to be on time and meet deadlines. If we say we are going to do something by a certain time, we do it. If for some reason that is impossible, we communicate another solution as soon as we are aware that we will be late.

  • We recognize that the customer is not always right, however, whether he is or not, its our responsibility to make him feel that way.

  • We hold ourselves accountable for our own actions and responsibilities. We admit to making mistakes and continually learn from them. When we learn from mistakes, they are not failures.

  • We take calculated risks to improve our areas of responsibility. We try new and innovative solutions to daily problems. We quickly discard the solutions that do not work and continually improve those that do.

One of the benefits of developing culture statements for one business is how easily they can be amended to apply to almost any business. Statements I wrote for another business included a point of culture emphasizing the importance of safety. There aren’t a whole lot of dangerous situations in the software business so I didn’t feel that was necessary to emphasize for cribME!.

It’s important to make use of and review all of the points of culture, along with your vision and mission, BEFORE you hire someone. The potential hire needs to be aware of what makes your company unique and it gives you an opportunity to measure her reaction to your emphasis on ethics.

This blog is just barely touching the surface of the importance of dictating your culture to shaping your business. One of the primary findings in, Built to Last: Successful Habits of Visionary Companies, that contradicted the teachings of almost every MBA program on the planet, is that the businesses that survived and excelled over time were often the ones that were centered around a core business concept, not a great product.

We’ll get more in depth into the Vision and Mission in another blog, however, for now, start reviewing your business’ current culture and compare that with the culture you’d like it to have. In the next few months I’ll be working to define the culture of a few startups, as well as potentially revamp the culture of a business that’s been around for over 10 years. I look forward to recording the lessons learned from both of those processes.

To your success, Bryan