Most people don’t start a business thinking that they’re going to do the wrong thing. However, ethical challenges inevitably arise.
It’s even more difficult to do the right thing if your company is not anchored from the onset to a strong moral base. Entrepreneurs can lay a firm ethical foundation for their enterprise by ensuring a “yes” answer to these four crucial questions:
1. Fairness: Is your business model based on win-win outcomes?
One of the practices that led to the 2008 financial crisis was certain banks bundling risky debt, selling it to clients, then betting against those same investments. No business’s success should be predicated upon its own customers’ failure. A core tenet of any ethical business is that both company and consumer should come out ahead. A need to win at your customers’ expense is a fundamental moral lapse.
2. Integrity: Can your business’s products/services be promoted with the truth?
If a business needs to dramatically alter pictures of its products to make them look appealing, fabricate positive customer feedback, or obscure contract terms, something is drastically wrong. Any company that has a legitimate value proposition should be able to promote its products or services by presenting them in a straightforward and honest manner. Creativity in communication is a good thing, but a need to change the truth is a clear sign of a morally-flawed foundation.
3. Decency: Can you unashamedly tell others what your business does?
When asked how he decided what ad content his agency would not use, an advertising executive famously said he would not allow the creation of anything that he wouldn’t want his wife and children to see. The same standard of decorum should apply to your basic business concept. You should be able to describe with pride your business to your spouse, children, mother, father and everyone else. Embarrassment may mean a morally suspect business model.
4. Sustainability: Does your business make efficient use of resources?
The notion that wastefulness is immoral is nothing new. Consuming more than we need, or gluttony, has long been one of the seven “deadly sins.” Organizations should avoid a similar lack of self-control, starting with the design of a sustainable business model. Of course, remaining viable means being profitable. However, here sustainable more specifically means practicing good stewardship of resources to support the long-term well-being of everyone, not just primary stakeholders. A business model based on reckless consumption is not only inefficient, it is also ethically irresponsible.
Fairness, integrity, decency and sustainability – the four pillars of ethical enterprise. Of course, these four pillars of ethical enterprise won’t guarantee morality, but their early adoption does provide the firm foundation upon which a morally-minded business is based.