Archives For business ethics

Have Americans Lost Confidence in Business Leaders?

September 5, 2013

In a June, 2013 Gallup Poll (Confidence in Institutions), only 9% professed a great deal of confidence in big business, while 13% indicated quite a lot of confidence. In the same poll, 31% expressed very little confidence in big business. Ten years ago the value was the same at 31%. Twenty years ago, 28%; thirty years ago, 26%.

The values for small business were far better by roughly three times in a great deal and quite a lot categories, at 29% and 36% respectively. Only the military polled higher than small business. Americans trust small-business owners in the creation of jobs more than any other entity.

Though the results over thirty years don’t indicate a dramatic shift in the public’s lack of confidence in big business, there is clearly room for improvement. What drives this lack of confidence? What are the sources? Is it the seemingly endless number of highly publicized corporate scandals and criminality? Is it executive compensation? Outsourcing to foreign countries? Mass layoffs? Cutting of or reducing employee benefits? Greed as a primary operating principle?

It is all of the above, and probably more. At the heart of the matter, in my opinion, is executive leadership. Because of the relatively easy access to owners of small businesses, they are known by the public in ways that leaders of big businesses are not. Hence, small business owners are more likely to be accessible, accountable, and admired by the members of their communities when they conduct their activities with integrity and responsibility. If they act otherwise, they’re finished and they darn well know it.

Leaders of large businesses may not be well known to their own employees, much less the general public. They are mostly seen in newspaper or online articles when commenting on quarterly results or gaining millions in stock options or announcing a domestic plant closure or an overseas plant opening. Is it any surprise, then, that the public expresses low levels of confidence in business executives they know very little about, and who they assume know and care very little about them?

Then again, the general public knows little about the military leaders who are entrusted with the nation’s defense, yet they indicate very high levels of trust in those leaders. Why the difference? Why is one group trusted and the other, not so much?

Military leaders are seen as having the public’s well-being at the heart of what they do. They are generally regarded as unselfish, committed to a life of service where the demands are great and the sacrifices are many. Great military leaders are seen as ambitious, sure, but never at the expense of their troops. The American military has long served this nation honorably and skillfully, and its tradition of sacrificial service has earned it a place of special trust with the citizenry.

Business leaders should consider this difference carefully. No, the business profession is not the same as military service. But great leaders are great wherever they are, in whatever capacity they serve. And in all fairness, big business has also unquestionably served this nation well, in peace and war.

So, have Americans lost faith in business leaders? I think not. But public confidence is not improving, which reflects the need for business leaders to think anew how they are perceived by the public, and how that perception can be upgraded. The business leaders in the forefront on this in an honest, ethical, and assertive way will be noticed. And appreciated.

In Leadership , , , , , , ,
permalink

Why Business Ethics?

April 9, 2013

I’ve been making my way around Atlanta speaking to various groups on the subject of business ethics. My talk is entitled Business Ethics – Why the Bother? In it, I make the case that a company can benefit in multiple ways from adhering to high ethical standards. Indeed, I believe it is well worth the bother to be known in the marketplace and society at large as an ethical entity. After all, with the mere summoning of Google and the avalanche of information that can follow, who wants to do business with a shady, ethically challenged company?

Making my way from writing a novel to speaking on business ethics isn’t quite a straight line, is it? While my novel Dare Not Blink is a business thriller, it also deals with ethics. The book’s protagonist, Dave Paige, is a business executive of high character who becomes embroiled in a nasty power struggle with others of another, lesser sort. So does the ethical guy win in the end? Well, for no less than the sake of the American system of capitalism, let’s hope so.

I exaggerate, I confess. That a novel would have a discernible bearing on the survival of American free enterprise is a bit of a stretch, to be sure.

But in real terms the idea of the ethical guy winning in the end has everything to do with our free-market system either flourishing or fading away. Americans are fast losing confidence in many of our long-standing institutions, to include government, the press, the public school system, the church, and business. Some in the political class, who themselves are regarded in a now famous survey as only slightly more preferable than cockroaches, have made a sport of bewailing the behavior of many business leaders, especially those on Wall Street. The criticism is not entirely without merit, in all fairness.

That’s why I’m speaking up. The vast majority of the men and women I dealt with in my business career were virtuous, conscientious people who tried to do the right thing for their customers, employees, and suppliers. Of course they weren’t perfect, but they were guided by an ethical code that drove them to do the right thing. They are the good and righteous nucleus, the backbone of the business profession.

Much work still needs to be done at the executive levels in adopting and then maintaining a rigorous code of ethics in their respective companies and industries. Leadership is critical here, and there is little chance of regaining the trust of the public without the broadly positive examples that only leaders can provide.

Additionally, students of business should be exposed to ethics in a far more intensive way. These are our future business leaders, and the global, ultra-competitive, cutthroat arena they will enter will be fraught with ethical challenges. They should be made to understand that a profession with little appetite for policing itself will bring about the ubiquitous and ruthless regulation from the outside, the cumulative results of which will resemble death by a thousand cuts.

We have lots of challenges ahead of us as a nation. Political, economic, and cultural issues abound, many with implications that could alter our society in ways that we can’t yet foresee or even understand. But our free-enterprise model has done so much for so many, and has so much potential yet unrealized, that its healthy continuance should be central. We should relentlessly seek to improve upon it, but never apologize for it. As far from perfect as it is, it’s still the best economic system in the world. And it’s up to us to make it better.

That’s the reason I advocate for business ethics.

In Ethics , , , , ,
permalink

A Model For Ethical Leadership

February 1, 2013

Are you a leader who aspires to set an example of ethical leadership in your organization? If so, you are headed in the right direction.

An organization’s leadership is responsible for influencing others to perform an action, complete a task, or behave in a specific manner. Leaders must be people-oriented, decisive, and bold, with a well-developed ability to inspire and motivate. They must also be able to do what is sometimes inconvenient, unpopular, or perhaps even temporarily unprofitable. Leaders must do all of the above, and those leaders who are viewed as ethical and honest will have a far greater chance of gaining and keeping the loyalty of employees and others. To be viewed as otherwise is indeed a slippery slope.

The following steps may be useful in establishing an ethical-leadership model:

  • Set high ethical standards and meet (or exceed) them. Standards should be established and promulgated for both professional and personal conduct. Those standards should be maintained and monitored, with the leadership team always setting the proper example. Drive a culture of ethical behavior by constant reinforcement and demonstration, and clearly establish that partial or non-compliance from anyone is unacceptable.
  • Openly share information. Transparency should be more than a promise or a slogan. Make sure your employees understand that you share information with them because you trust them, and thus you expect them to make the right decisions because of their being well-informed.
  • Be fair in all personnel decisions. Merit and fairness should always factor disproportionately in decisions affecting employees. Never assume that employees can’t detect favoritism or prejudice; they can. Always assume that examples of unfairness will do great damage to the fabric of your organization; it will. Know that fairness will help gain and maintain trust; it does.
  • Keep your word. This should be common sense, right? Often, however, it’s uncommon practice. Your word is truly your bond. The more your employees can count on you to do what you say, the stronger the bond. They can count on you, you can count on them–there is a direct correlation.
  • Treat everyone with respect. An ethical leader leads in a manner that respects the rights and dignity of others, both within and outside the organization. It is critical that this behavioral characteristic starts at the top; it is not a bottom-up process.

The above steps can help establish in everyone’s mind the importance of ethics. It is the leader’s responsibility to build the trust, set the example, and drive a culture of high ethical standards in an organization.

In Ethics , , , , ,
permalink