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Actions Speak Loudest

Entrepreneur, May, 2000 by Chris Penttila

Sinner? Saint? All eyes are on you, and your employees will pass judgment.

As a small-business owner, you'll encounter situations (if you haven't already) that will test your integrity and make you feel like you're walking through an entrepreneurial Garden of Eden. Perhaps you're faced with the temptation to tell "little white lies" to customers to make a sale. Or maybe it's a tendency not to be upfront with your vendors and suppliers. Sometimes, there's pressure to give your investors additional perks that don't apply across the board.

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But before you bite into the apple of entrepreneurial enticement, think first about the impact those actions will have on your staff. These days, your choice of how to take care of business affects the length of time your employees choose to work for you. "Today's employees are looking at the virtue and character of their leaders," says Dick Mason of the Maguire Center for Ethics and Public Responsibility at Southern Methodist University in Dallas. "Character is really a beacon for them. They want to know that the leadership has integrity."

INTEGRITY EQUALS LONGEVITY

"Come on," you say, "my employees aren't paying such close attention, are they?" Actually, they are. For entrepreneurs faced with a 4 percent unemployment rate, character is an issue as never before. Womb-to-tomb jobs are long gone, and today's employee is expected to hold between 12 and 15 jobs over a lifetime. And as companies wrestle with retention, the personal integrity and ethics of their leaders matter more than ever before. Your employees are watching you more closely than you think. "One guy I spoke with told me that the only thing he has to go on is that his boss is honest," Mason says.

The results of a 1999 study could be a wake-up call for CEOs everywhere: According to a joint Hudson Institute/Walker Information survey of roughly 2,300 full- and part-time employees working for government, business and nonprofit organizations, more than half (53 percent) thought their company leaders lacked integrity. "We were surprised at the perceived lack of ethics in the leadership of these organizations," says Marc Drizin, Walker Information's vice president of business alliances. Even worse, only 42 percent believed their organizations deserved their loyalty, and only one in four employees was considered "truly loyal" (defined as committed to the organization and planning to stay for more than two years). The survey also revealed the things that would make these workers commit for the longer term: fairness at work, care and concern for employees, trust, and reputation of the organization. This information points to the trend that today's worker is looking for meaning in the workplace beyond money and stock options.

Salary is no longer the sole satisfier, nor the key to employee loyalty. Instead, loyalty is tied to the feelings workers get from their workplaces, and the values and ethics that are transmitted from the leadership. Just like Tom Cruise's character in the movie Jerry McGuire, employees are seeking deeper meaning and inspiration from their work, evaluating their companies' ethics and searching for their own. The new workplace compact is based on fairness and trust, on knowing that procedures are evenhanded and that leaders have character. When employees realize their organization lacks these qualities, they start planning their exit. "When you ask your employees to compromise their values, they will move on," says Anne Pasley-Stuart, a Boise, Idaho, expert on ethics in the workplace. "It may take awhile until they actually go, but they will leave eventually."

STAYING IN THE BUSINESS

As employees seek to move ahead in their careers, they sometimes find themselves facing ethical dilemmas. A Wirthlin Worldwide/OfficeClick.com survey of 148 Fortune 1,000 administrative assistants conducted this past fall revealed that 10 percent of the respondents had been asked by their CEOs to notarize documents without witnessing the signature, and 47 percent had been asked to tell "little white lies" for their employer. On the survey's flip side, when these CEOs were asked whether their assistants had faced such ethical dilemmas during the past year, 90 percent said no.

"You have to be careful to be in the business, not get above it. The temptation to abuse the privileges of your position can be great," says Kelly Campbell, 31, CEO and president of Interface Technologies Inc. (wwwiftech.com). His 16-employee software company in Raleigh, North Carolina, was voted the most family-friendly company of its size in its region by The Business Journal and law firm Maupin, Taylor and Ellis PA. "It's easy when you're starting out to focus on the bottom line;" Campbell says, "paying the rent--and it's tough."

When Campbell co-founded Interface in 1992, he was fresh out of college and learning as he went along. He quickly found that the key to employee loyalty is communication, and beyond that, honesty. He believes that ethics are tied to the "trust factor" between management and employees. When employees feel clued-in to the big picture, they feel better about their place in the company--an important factor when you're running a small business. "One of the risks of being in business is that we can go out of business next month," he says. "Communication lets employees know they're safe. I've learned that if you leave things out, they'll fill the space with the worst-case scenario."

Business Services Industry

Actions Speak Loudest

Entrepreneur, May, 2000 by Chris Penttila

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