Business, Ethics and Confidence

A reflection this week on the importance of 'ethics' within business. Let's begin with a quotation from Bob Burg, which I've used on previous occasions, "all things being equal, people will do business with those they know, like and trust." Earlier this week I read an interesting article by my friend Wayne Drew in Televisual magazine, which began with the phrase, "Without trust, society cannot function". I believe the interaction of these two quotes has implications for business that we'd all do well to carefully consider.

Beginning with 'trust'

It's clear that 'trust' has taken a real kicking recently. In the UK politicians have been caught with their snouts in the trough and across the world those in the banking industry have been lambasted for lining their own pockets while emptying others. In an attempt to rebuild their balance sheets the banks are now playing hard-ball with their loyal clients. Bernard Madoff has been jailed for 150 years for stealing from both the wealthy and the poor. Even reliable, solid, solvent IBM, renowned for looking after its staff, is closing its generous "C Plan" pension scheme.

There is an idiomatic saying in British English; "Would buy a used car from any of these people?"

Clearly not, no sane person would. Anyway, the automotive industry is in such a mess that you can pick up a new car at a bargain price. And this isn't intended as a cheap joke - there's a point buried away in here that I really want to make - it goes like this:

In buying a new car direct from the manufacturer, you'd be bypassing the second-hand car market and going straight to the 'primary source', as it were. Generally speaking, primary sources are given more credibility over other sources - you'll have heard the expression 'straight from the horse's mouth', meaning directly from a trusted source.

You have specialist subject areas on which you speak. In these areas you are the primary source and my question to you is this; what are you doing to enhance your credibility as a trusted source?

You already have a strong hand - you are already an authority - what are you doing to make it easier for people to trust you?

Going back to Bob Burg's comment from the opening paragraph, the more people who know and like you, the more people who will trust you. Again, speakers are onto a winner - where other businesses might struggle to find a convincing and engaging speaker among their staff, this stuff is your stock in trade - you get to stand on stage and kick off the "knowing and liking" thing with hundreds of people at a time. There are businesses out there that would bite your hand off for such an opportunity.

Consider yourself lucky.

Continuing with 'ethics'

The world is awash with people calling for 'regulation' - regulation to prevent a future banking crisis - regulation to keep the politicians' snouts out of the trough. Largely a waste to time in my view.

The problem with regulation is this: people no longer ask themselves whether a course of action is 'right and proper', they simply ask whether the regulations allow such a course of action. If not, they invest time and effort in getting around the regulations.

What we are then left with is a class of people who believe they've done nothing 'wrong' because everything they did was allowed by the regulations. In short, they lose their moral compass and defer to regulations instead. Witness the number of politicians in the UK who've defended themselves in the recent expenses scandal by claiming (a) that they'd stuck to the rules and (b) therefore hadn't done anything wrong. How myopic can you get?

I'm all for the lightest possible regulations. Something like "don't do anything your Mother would be ashamed of" would cover most things really. It would force people to think and the vast majority would err on the side of caution. Those that didn't are the ones who would break any rules anyway, so it really doesn't matter.

The business benefits of being ethical

The wonderful thing about 'light regulation' is that - surprisingly - you know where you are. I would far prefer to do business with someone "who wouldn't do anything their Mother would be ashamed of", as opposed to someone who claimed to adhere to a particular "Code of Conduct for such-and-such an industry".

Can this be measured? Yes, to a certain extent it can. Have a look at http://ethisphere.com/, where you'll also find information on the world's top 200 most ethical companies for 2009.

On the Ethisphere website you'll also find the questionnaire that is used as the basis for the 2010 competition. It's all good stuff, done with the best of intent I'm sure, but I do have a problem with it. If you have fewer than 100 employees or an annual turnover of less than $5M, you can't enter - which to me implies an inability for smaller organisations to be 'ethical' - something I (strongly) disagree with. That aside, I'd suggest having a read of the questionnaire for 2010, even if you're barred from entering. In amongst all the 'corporate stuff' that smaller companies won't bother with, you'll find a few gems that could be easily applied to your business and would enable you to clearly state to your potential clients that (a) you can be trusted and (b) you don't do anything your Mother would be ashamed of.

That's it folks for this week - as usual, your comments welcomed and appreciated, particularly with reference as to what you'd like to hear about. I do get quite a few emails by the way, and I read them all, so please don't feel shy about getting in contact.

Best wishes for the coming week.

Chris Davidson
Editor, Professional Speakers Journal
editor@professionalspeakersjournal.com