Although this dos not have anything to do with plants, it does have to do with how we do business. A while back, I was in a meeting of the Omaha Business Ethics Alliance. I was in a conversation with people from academia, and some leaders of business up to fortune 500 companies. The conversation was so big picture, I was thinking it would be over the heads ofeven the desire of many small business to understand it, so I wrote this to sum up why it matters to small business to pay attention.
A Fiscal Case for Ethics Policies in Small Companies
By: Michael Becker, Estate Gardeners
A point I often like to make regarding ethics policies and procedures is if you want to affect change in small businesses, it is crucial that you can demonstrate the payoff. Although many small business owners are honest, ethical and even altruistic, they are equally overextended in time, overwhelmed by the number of roles they fill in the company and they are constantly making due with limited resources. So the question that needs to be answered in black and white is what are ethics programs, procedures and policies going to do for the bottom line? I am the CEO, CFO, COO, HR Officer, Head Sales Director, Lead Designer, Lead Estimator; I am a trainer, a quality control manager, a purchaser, and sometimes even a crew member. Why in the world would I want to add another hat to that rack with Ethics Officer? Another set of policies means more things to manage, more expectations of my people, more training and more discipline. The answer is: In the short and long term, it adds to my bottom line.
First you have to understand that ethics is not a separate department or isolated entity in a business. It is more like a nervous system that winds through every aspect of the business, so how you define ethics is important. An ethics statement after your mission and vision on your website, or even volunteering for a committee on the Omaha Business Ethics Alliance probably isn’t going to do much for your bottom line. But, if you approach ethics as a verb rather than a noun you can begin to create change in your business. At Estate Gardeners we say ethics is Proactive, Timely and Ours. All of these things contribute to our well-being as a company because this approach takes ethics through every facet of the company. So let’s look at each one of these and see how they add up.
Ethics is proactive is an important step. It says we will head off conflict, misunderstanding, mistakes and damage before it occurs. We do this by looking at functions of hiring, training, and equipping our people with tools and skills as an ethical imperative. It is our ethical duty to all of our stakeholders that we do these things and do them well in order that we can keep our promises. Our promise to do the job we are being paid for in the manner the customer expects, our promise to pay our vendors, our promise to our employees that they can safely and efficiently succeeded at their jobs. We do this by looking for qualified people, training them how their do their job and how to make decisions that are right for the company, and all the stakeholders alike. Our employees attend in-house, local, regional even national educational events and they obtain and maintain licenses and certifications in their field. This is all an ethical decision. It is easy to cut training as a cost especially in hard times, Many companies do it, worse yet, many don’t ever spend the time or money….and that translates to more mistakes, more conflicts, and overall more damage to a company.
Ethics is timely. It is not something you can get to later, especially if you are dealing with an ethical dilemma after the fact. If there is a conflict, or mistake, it is important to remember that bad news is not like wine or cheese; it does not get better with age. When our proactive measures fail, and we find that we must repair damage or correct a mistake or clarify communications, now is the time. We once had a job where we had a subcontractor install some concrete stairs at a customer’s home. The evening they were poured, I got a call from the client that they were not properly aligned with the front door. And in truth, if you stood in the street and crouched down you could see that this flight of 15 stairs was about 6 inches off center of the front door. I am convinced I could have discounted the job and left the stairs where they were, or even convinced the client to just live with it (which is exactly what would happen, they would live with it every day). Our response was to rip the stairs out, have the concrete contractor come back and re-pour the steps, all completed in 48 hours at our cost. The referrals we received from this customer since then have added up to over $250,000. That is a quarter of a million dollars. I think a company of any size would agree that that is an incredible return on the $1,800.00 spent to take a client from upset to a fanatic supporter. This happened because we addressed our mistake immediately. Our ethics policy (ethics are timely) guided our thinking here and prevented us from making a poor, and I would say unethical decision based on very short sighted financial grounds. The customer thanked us for not making her feel like a whiner or complainer and just handling the situation. That gratitude came from the fact that we owned that problem and we did not shirk our responsibility.
Ethics are ours. We are the ones that put ourselves into the market place. We are the ones that say “Your trust is well placed with us.” We are the ones responsible for every aspect of our business and that includes the expectations the stakeholders have when they engage us. When we enter that relationship we take full responsibility for all expectations and communications. If there is a failure in communication, it is our failure, even if the customer is difficult or a poor communicator; we are the ones who sought that relationship. It is our ethical responsibility to clearly define all expectations, all understanding and then follow through with them, and in the instance we fail, to correct the situation. This ethical principle also guided our action in the above case. It prevented us from blaming others, or classifying the client as too picky and as a relationship where we should cut our losses and extricate ourselves.
Seeing ethics as a verb, being proactive, being timely, and owning our own ethical behavior prepares our people to do their jobs well and make better decisions that avoid ethical dilemmas which creates happy customers and long term relationships. In a small company ethics statements or procedure statements in subchapters of policy manuals do not engender ethical behavior. When we define ethics as actions, we see behavior and thinking follow, and with ethical behavior and thinking we avoid conflict, and when we don’t avoid it we address it immediately. Through all of this, we recognize that ethics is our responsibility. The result of this ethical policy is, fewer mistakes, people trained and empowered to do their job well and make sound decisions, and ultimately, to customers, employees and vendors who see that they can count on us. That translates to more productive employees, long term profitable customers, better terms from vendors and a bigger bottom line.