BUSINESS ALCHEMIST: Ethics in your business — do the right thing – Sarasota Herald-Tribune

Dennis Zink| Sarasota Herald-Tribune

Corruption is widespread in business. Some leaders are out-and-out crooks directing malfeasance from the top. More often, employees bend or break rules because those in charge are blind to unethical behavior and may unknowingly encourage it.

So says Harvard Business Review.

A business sector with countless examples of an ethical morass is the automotive industry. Dating from the Ford Pinto era, rear-end collisions often ruptured fuel tanks, resulting in leaking fuel and deadly explosions. Casualties were thought of in terms of a dollar amount to settle lawsuits as a cheaper alternative to fixing the problem. A few years ago General Motors had a massive recall involving faulty ignition parts that was a result of saving pennies at the expense of its reputation and lost lives. Volkswagen cheated on diesel-emissions tests. And in the biggest automotive recall in history, defective Takata airbag inflators in cars made by several manufacturers showed a high risk of killing passengers with pieces of shrapnel.

Sadly, this is only one industry.

The quest for higher profits, conflicts of interest, misguided incentives and coverups of unintended consequences are just some of the reasons business ethics go awry. In the quest for higher profits, cutting corners and other cost savings strategies often backfire and result in the loss of profits and even thedemise of a business.

In a case of the end justifies the means, liar loans were all the rage during the housing boom. Banks and mortgage companies didnt even try to hide it. Government incentives prompted small down payments in an effort to increase home ownership. The ends justified the means until they didnt.

Honesty, perhaps the most important value, is a slippery slope descending into dishonesty through various stages, such as withholding information, telling white lies, using puff or spin, putting lipstick on a pig, exaggeration and understatement, evading or stretching the truth, and outright lying.

Some of my thoughts on business ethics:

Be a good corporate citizen. Social responsibility encourages honesty, dignity, respect and fairness in dealing with your associates, customers and vendors.

Hire ethical people who will do the right thing. The culture of your company should reward safety, diversity, accountability and promote continuous improvement. Culture is made up of the collective behavior of owners, managers and employees.

I am more ethical than you. Surprisingly, employees tend to see themselves as more ethical than anyone else. They see their peers and co-workers on their level as less ethical than themselves. They see those above their level as even less ethical, with ethical standards descending with ascending levels of management.

Personal versus business ethics. As a person, of course, you act ethically. Your company is putting pressure on you to achieve quotas as it relates to sales goals. What are you going to do?

In religion, its the golden rule of reciprocity. Confucius said in 500 B.C., What you do not want done to yourself, do not do to others.

It all comes down to values. If you go with your gut, you should stay out of trouble. But your business should have a written code of conduct. Ethics is not event oriented, it is value oriented. David Rockefeller said, Honesty in business is non-negotiable. Trust is the foundation of all business success.

The boss. The top dictates the tone on what people say and do in the workplace. Clear and effective company communications are necessary. As the leader, anticipate trouble and be proactive. The best thing a company can do to help it succeed is to take care of its employees and inspire confidence in others.

The greater good. Sometimes there are no good choices. Ask what decision will provide the greatest long-term benefit to the greatest number of people over the long term. Conversely, what decision will do the least harm to the fewest people over the long term.

In the past few decades, there has been a greater emphasis on stressing the importance of ethics education in business. A persons core values are pretty much set by the time they enter the workplace. If you are obeying the laws, following the rules, using your common sense, and going with your gut, then you should be fine. You can always ask people you trust what they would do in a given circumstance.

In summary, business ethics is about how we treat others and how they treat you. Its a two-way street. Most ethical dilemmas are delineated in shades of gray. Try to be aware of your own blind spots.

Finally, if you get the urge to do something questionable because no one will know, remember this: You will know.

Dennis Zink is an Exit Strategist, business analyst and consultant. A Certified Value Builder and SCORE mentor, and the past chapter chair of SCORE Manasota. Dennis created and hosts Been There, Done That! with Dennis Zink, a nationally syndicated business podcast series and SCORE Business TV available at http://www.Time4Exit.com. He facilitates CEO roundtables for the Manatee and Venice chambers of commerce. Dennis led a SCORE team to create the Exit Strategy Canvas and Exit Strategy Roadmap program that provides a real-world methodology for business equity realization. Email him at dennis@Time4Exit.com.

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BUSINESS ALCHEMIST: Ethics in your business -- do the right thing - Sarasota Herald-Tribune