Ethics for Start Ups

When you are starting a company, ethics may not be the first thing on your mind. The article referenced below talks about how to build ethics into a start up company.

Recognize the Crisis

The biggest mistake made in an ethics crisis is not recognizing that it is an ethics crisis. Executives tend to overestimate the protection offered by the organization’s reputation and its legal defenses. And they often reason that the organization will not be held accountable for what someone did contrary to the organization’s direction or policy. This is untrue. The sooner you own any crisis, the less newsworthy it is. Early acknowledgement of an ethics crisis is particularly effective in showing that the wrong action is not characteristic of the organization.

The Ethics Strategy #5

As part of a long-term research project, I identified five competitive strategies common to organizations that are successful and ethical on a sustained basis. None of these strategies considered alone guarantees ethical success. I have been sharing these strategies through a series of posts. Here is the final strategy in this series.

I once worked with a CEO who temporarily suspended all of his company’s significant operations in Mexico because he couldn’t find a way for his managers to uphold the company’s ethics while doing business there. This is an extreme example of an important practice, which is looking at business opportunities in terms of their ethical implications. While this is especially important internationally, there are also business opportunities domestically that are hard to pursue ethically. For example, it is particularly difficult to pursue an ethics strategy in a market in which competition is based entirely on price. The time to exercise ethical judgment is when you are considering an opportunity as opposed to when you are in the middle of regretting it.

The Ethics Strategy #4

As part of a long-term research project, I have identified five competitive strategies common to organizations that are successful and ethical on a sustained basis. None of these strategies considered alone guarantees ethical success. I will be sharing these through a series of posts. Here is the fourth strategy.

Define the value of your ethics.

If you are committed to ethics, you probably believe that the company’s ethical stance provides a benefit to its customers. It is not enough to just hope that your customers will notice this. It is up to you to define that benefit and make it apparent to your customers. For example, if you take the extra time to ensure that your products or services fit the customer’s needs, make this effort a part of what distinguishes you in the market place. Nordstrom has made a simple ethical commitment a cornerstone of its reputation. That commitment is to treat customers making a return the same as customers making a new purchase. The benefit to customers need not be something earth shaking; it just needs to be something customers will recognize.

Avoid Fatal Ethics Mistakes #5

This is last post in the Avoid Fatal Ethics Mistakes series. I appreciate all of the positive comments especially on Linked In. Always feel free to comment here as well.

If you are not sure of an action, try explaining it to someone whose judgment you trust. This is not because you will benefit from what the other person has to say – although you probably will. But you will benefit primarily from your own attempt to explain the action. When you can not give an explanation you consider plausible, you are risking a fatal ethics mistake.

Avoid Fatal Ethics Mistakes #4

Another tip on avoiding fatal ethics mistakes:

Don’t use pressure to justify an unethical action. Many fatal ethics mistakes are made under pressure to just make some decision, any decision. Rather than think things through, you take the path closest at hand even if it is ethically questionable. The rationalization is that anyone under the same pressure might make the same choice. Be on guard when you feel pressure to just make a decision. Hindsight will judge the action without considering the pressure.

Avoid Fatal Ethics Mistakes #3

Another tip on avoiding fatal ethics mistakes:

Respect your innate sense of right and wrong. When we do something wrong, we often ignore an uneasiness about the action that we may not be able to explain. In a world of ethical relativism, it is unfashionable to claim to have an inner sense of right and wrong. And yet we do. In almost every fatal ethics mistake I have observed, the individual making the mistake sensed that the action was wrong beforehand.

In my book Make an Ethical Difference I explain what this innate sense of right and wrong is and when it should be trusted.

Avoid Fatal Ethics Mistakes #2

Another tip on avoiding fatal ethics mistakes:

Act on the principle that nothing you do is private. Most people who make fatal ethics mistakes gamble that their action will never be discovered. They are trying to fly under the radar. But we live in a world in which everything we do is tracked, recorded and potentially accessible. Even if it was once reasonable to assume you might fly under the radar, there is no space under the radar today.

Fatal Ethics Mistakes

It is often far harder to recover from an ethics mistake than an ordinary mistake. While an ordinary mistake may reveal a lack of knowledge or attention, an ethical mistake colors perception of everything a person does. When caught in an ethical mistake, admitting to it often does not settle the matter. Doubt remains about the character of the person who made the mistake.

Suppose you steal a sales lead from a co-worker by intercepting a phone call from a customer that was intended for the co-worker – “She’s not available but, no worries, I can help you with that…. ” You take over the call, steal the customer and get paid incentive for doing so. And then you are caught. Not only will your co-worker never trust you again; she will put out the word that you prey on your colleagues. You made a fatal ethics mistake.

Or suppose you are working on a new drug being tested in clinical trials. The company is gambling a lot on this drug and you are proud of your role in its development. After the closing date for all trials to be reported, a late report arrives indicating problems with the drug. It is the only negative report and you are entitled to ignore it because it is late. You bury the late study. But when the drug is released, there are serious side effects just as predicted by the late study. You made a fatal ethics mistake.

Hindsight is 20/20 and you may conclude that you would never make these mistakes. And yet in my daily work as a consultant, I see many fatal ethics mistakes made by ordinary people. While they almost always regret these mistakes, they have often injured their careers irreparably. In ethics, it is often one strike and you are out.

Fatal ethics mistakes are almost entirely avoidable if you take certain precautions when facing difficult decisions. In a series of posts, I will provide tips on avoiding ethical mistakes based on my experience as an ethics consultant.

Be Ethically Strategic

Be strategic about ethics. It is rare that the ethics of an individual and the ethics of an organization agree completely. It is just as rare for the ethics of an individual and their co-workers agree perfectly. Being ethical does not mean being unwilling to compromise when the inevitable disagreements occur. If you are too rigid about your ethics, you are sure to limit your ability to influence the organization when it really matters. Ethical leaders compromise on small issues to build the personal capital needed to influence the big issues. You may disagree with others in your organization about whether an ad is deceptive. But if you are also concerned with a product safety issue, you might save your ethical capital for that fight. One thing that thwarts the success of ethical managers is being overly rigid about their ethics. It is worth compromising on the smaller issues in the interests of winning on the issues of significant ethical impact.