Dr. John C. Knapp, president of the Southern Institute for Business and Professional Ethics, recently prepared a comprehensive article about this topic for Competitive Edge magazine. The magazine’s home office is in Atlanta and covers the state of Georgia. Here’s some of the pertinent information from Dr. Knapp’s article.
“If anything can be safely said about today’s business climate, it is that confidence and trust are in short supply. And you need not be at a Fortune 500 company to know it. The headlines may speak of Enron, Andersen, WorldCom, Tyco and other fallen giants, but the effects of their ethical failures are being felt by businesses of all sizes.
“In every facet of business—from sales to employee relations to customer service—it is more important than ever to prove that you can be trusted. For many organizations, this means providing more information, answering more questions and generally working harder than usual to earn the confidence of those on whom their success depends.
“Trust cannot be bought with advertising or PR campaigns; it must be earned. That’s always been true, but never more than today.
“For this reason, there is no longer much doubt that ethics is a bottom-line asset. Customers choose to do business with companies they trust. Investors make decisions based on management’s integrity. Employees seek jobs where they will be respected and treated fairly.
“Conversely, recent events have proven that unethical conduct can be incredibly costly—to shareholders, employees, customers, communities and even the market as a whole. The bottom-line impact on individual careers and reputations will be measured not only in dollars, but in some cases in jail time.
“Yet while it may be apparent that ethics contribute to successful careers and companies, many business people fail to appreciate that ethical leadership is more than just simply being a ‘good person’ or having ‘good intentions.’ It is hard work.
“It means not compromising or cutting corners to make a goal. It requires setting standards, communicating them, teaching employees to perform to them, enforcing them and adhering to them personally. It involves honest self-examination of the organization and oneself to identify weaknesses that might undermine relationships and reputation. And because ethics transcend all areas of business, it calls for continuous attentiveness as decisions are made each day. Unfortunately, these are not the things that are taught in most business schools, so the ethical leader usually has to make a personal effort to develop the skills and knowledge to perform well.”
He further stated the top 10 causes for employees’ unethical conduct are: “Failure of the organization’s leadership in establishing ethical standards and culture; personal greed; weakness of personal character; desire to advance career; pressure to meet unrealistic performance or financial goals; inadequate training and communication; indifference or low morale; pressure to meet deadlines/schedules; not understanding the company’s ethics policies; and not agreeing with the company’s ethics policies.”
He then asks three questions: “How well defined are the ethical standards that guide your business conduct? What steps do you take to apply these standards in practice? Does your management’s conduct match its talk?”
Let’s all ask our organizations to answer those questions and remind ourselves ethical management isn’t always easy. It takes hard work, sustained communication, and committed leadership—nothing to it.
Winston Churchill once said, “Sometimes doing our best is not good enough, we must do what is required.” IBI