Having good ethics should be just as important as any other business characteristic; the importance of good ethics should be seen in much the same way the business community has recognised the importance of a good company culture on the success of a business.
Good ethics help to build a stronger business, offering benefits not just externally, but also internally to staff and the company as a whole.
Here are just 5 of the ways business ethics can help your business:
1. Decision Making
Operating with good ethics helps in decision making. Ethical practices benefit businesses as a whole to make less short-term decisions that may result in long-term business failure; and more decisions that are likely to support the long-term success of the business.
Having poor ethics has directly played a role in the demise of many companies, Enron is a famous example of a company with poor ethics, a toxic culture that led directly to the ultimate collapse of the company.
In the space of a year Enron went from being considered one of the most innovative companies of the late 20th century to being synonymous of corruption.
2. Staff & Ethics
Research suggests 42% of the workforce want to work for an organisation that has a positive impact on the world.
A company with a proper focus on ethics is more likely to retain their team as they have a vested interest and a growing affinity for the business. Good working practices and ethics inspire a feeling of purpose to every staff members role. All of which makes growth and success a more likely long-term outcome.
There is a growing number of politically engaged job seekers who require more than a reasonable wage and a company focused on profit; they require their employer to hold embody values that align with their own and an ethical business model.
Ignoring this trend could mean cutting your business off from a large percentage of the workforce.
“In choosing one brand over another, consumers are already worried they’ve made the wrong choice; It’s never been more vital for salespeople to show spotless ethical standards.” – Ethical Leadership in a Global World.
You may believe that business ethics has no place in a customers purchase decision but on the contrary. In a similar manner to company culture, customers like to be associated with companies with a positive image; this includes a reputation for good ethical trading.
A reputation for ethical behaviour is a trust building tool with customers, it brings in both new and repeat business as it helps to communicate your business identity before you reach the point of sale.
Branding can also benefit from ethical business policies. Brands such as Toms have benefited from a positive brand image and association based purely on their business ethics.
This isn’t an exercise in creating a corporate facade and painting a pretty enough picture of your business to emotionally connect. Consumers are wise to brands who sell themselves on the basis of being ethical but don’t necessarily practice what they preach; this tends to come to light at some point and cause more damage than good.
Consider Brands such as ‘LUSH’ who don’t actively market or heavily brand themselves with the terms ‘Ethical’, ‘Eco’ or ‘Sustainable’ and instead conduct business ethically and in turn are regarded in customers minds as being eco-friendly and sustainable nonetheless.
5. Just Do it!
Ethically running your business is the right thing to do. No, this is not radical optimism or a naive bias. Many entrepreneurs can attest to the strains of setting up, running and growing their business; it’s an arduous journey. Running your business often bleeds quite seamlessly into your personal life, over time this can take its toll. Having a bigger picture, and a slightly altruistic reason for staying the course can add that extra 5% of motivation you need to keep going.
Good ethics play a significant role in your business decisions, staffing, branding, motivation, customer retention and so much more. Having a strong ethical core to your business can directly affect the strength of your company as a whole, and it’s future.
Every day decisions made in your business will shape its future. Make sure your fellow founders, employees and partners are all aligned with this ethical core to make it a real part of your companies DNA.
Good ethics are vital, and as businesses become more transparent (willingly or not), there is an even greater need. There is an upward trend toward enterprises that place ethics an ethical business practices at their core; one which you could benefit from also.
It’s not enough to just market your business as ethical; it’s important to set this out as part of all training, and documentation to communicate the message and improve buy-in across your business.
Tosin Yussuf is a marketing specialist and Founder of Marketbl the first startup marketing platform, based in the UK. A former Web and App developer, when she’s not helping startups grow, she’s tinkering with tech. @Marketbl_