Goodwill hunting

Entrepreneur, July, 1998 by Gayle Sato Stodder

When faced with an individual dilemma, Wilson consults fellow business owners at the Greater Houston Partnership, which is similar to a chamber of commerce. "Sometimes you don't know what's best," Wilson says. "That's when it helps to turn to your peers."

* Foster an ethical work environment. As you work to clarify your company's ethical positions, don't forget to walk the walk. Bear in mind that unwritten, unspoken messages can be powerful, too.

Jack Donner, owner of America's Best Self Storage in Torrance, California, believes one of the best ways to encourage ethical behavior is to treat employees well. "Maintaining an adversarial relationship between yourself and your employees is very shortsighted," Donner says. "[If that's your approach,] you'll get compliance only when fear or the threat of punishment is there. Otherwise, you won't."

Thus Donner's ethical agenda begins with fair terms of employment. "I'm here to help the employees, and they're here to help me," says Donner. "I pay top wages. I make my employees partial owners of the business by offering them a commission structure. I expect them to operate with the highest degree of ethics, but I'm also interested in functionality, not theory. If you hire unethical people or you don't pay them enough, people are going to do what's in their best financial interest."

* Provide a forum. No matter how thorough you are, predicaments will arise and violations will occur. Toward that end, make sure employees have a set procedure for raising concerns. And consider soliciting their advice on decisions you're making; they'll often have perspectives you don't.

* Avoid hypocrisy at all costs. Suppose you don't care about your employees, and you have no compunction about lying to clients. You lay off staffers on a whim, cook the books at tax time, and, worst of all, you have no interest in changing your ways.

Whatever you do, don't promote yourself to clients and staff as a paragon of virtue. Don't put glorious words about social responsibility in your mission statement. Don't institute sweeping reforms throughout your company. You'll only create bitterness among your staff and make a mockery of your authority.

"People are a lot more observant than you realize," says Wilson. "You've just got to be [ethical] - you can't lie about it."

THE REWARDS OF VIRTUE

If bulking up your company's moral fiber seems like a lot of work, consider the alternative. Imagine your company dogged by disgruntled clients, renegade employees, hapless decision-making and a poor reputation.

Not exactly your vision of success? In fact, it's hard to envision any company being successful under these conditions. And while it's believed that virtue offers its own spiritual rewards, the rewards of running an ethical business usually involve financial gain as well - if for no other reason than the fact that unscrupulous behavior generally leads to havoc.

This is why business consultant and business owner David Thrope, founder of Boston Knish Inc. in Acton, Massachusetts, believes that codifying your ethics should be part of the strategic planning of your company early on. Clarifying ethical standards - for yourself as well as others - is a critical step toward entrepreneurial maturity. "A code of ethics gives the people in a company a structure within which to make decisions," explains Thrope.