There's no doubt that 2020 has pushed business owners across the globe way beyond their comfort zones. With a global pandemic, lockdown and economic turmoil, it’s easy to think that the only answer is to focus on survival. Many business owners see this as a time to pull back and ration resources, but it's also an opportunity to step back and think about how ethical leadership can do more for your employees and business in the long-run. Here's a look at why making ethical decisions as an SME is vital during times of hardship.
Don’t ignore your ethical standpoint as a business
Too often, business ethics are seen as something to be explored when things are going well. Projects to initiate CSR programmes, reducing environmental impactor improving diversity, accessibility and equality within the company often take a backseat when organisations are fighting to survive financially.
But to ignore these vital, ethical, aspects of a business strategy is to put the company at risk. Those bottom-line projections could crumble if your company is making news because of indefensible action it has taken that short-changes customers, pollutes the environment or puts lives at risk.
In the past, these life and death questions had been the remit of certain sectors only – travel, healthcare, manufacturing, for example. But now even the smallest retail store needs to think about ethics, such as how it can accommodate shoppers safely, whilst other businesses may need to support employees who are working from home for the foreseeable future.
Why you need an ethical strategy
No matter what kind of business you run, every employer needs to consider what they can do to ensure they are making decisions from an ethical standpoint.
Some businesses’ ethical responses during lockdown made headline news - both good and bad. Those that treated customers and staff poorly didn’t go unnoticed in the media or on the Stock Exchange. Boohoo shares dropped 18% and saw more than £500m wiped off its value after criticism that factories within its supply chain ignored social distancing measures. During a time when members of the public saw their local retailers and restaurants closed for months, and suffered losses personally and professionally, knowing a board of directors behaved unethically caused some outrage. On the other hand, the businesses that pivoted to support their local communities were not only able to steady their cash flow, but also boosted their brand image and connection with customers.
Overall, having an ethical strategy in place means that when it comes to such crises or disasters, the business has something solid to refer to which can help with decision-making. Business leaders who have taken the time to consider the right thing to do, who have outlined their company values and specified their commitments, will be able to link back to that strategy if they need guidance or are required to defend their decision.
How to build an ethical strategy
Determining what constitutes a defensible ethics policy isn’t easy, so give your team the time and structure needed. Ensure you include diverse views and think about drawing in expertise from outsiders who have qualifications or lived experiences that aren’t present in your management team. Remember that the ethics strategy provides an umbrella for all decision making, showing how to act to avoid backlash, without ignoring vital operational or income-generating opportunities. The steps you take will establish your business values in more ways than a marketing campaign ever can.
Something else to consider at this time is that there have been a number of companies that have declared they are returning the Government payments received for furloughing staff. It sends a strong message: that the company is committed to the collective good, not looking for loopholes or opportunities to ‘make a buck’ when other businesses and the economy are on the brink of collapse.
It’s an ethical approach and businesses that can afford it may also consider refraining from applying for grants and funding or vying for resources. Both UK and global debt are going to last for a long time so if your company is able to, consider looking for new solutions and partnerships that contribute to reducing and sharing the burden of these economic difficulties.
An ethical strategy should be informed by and, in turn, influence every aspect of an organisation. Employees are going to expect a lot from business leaders in the months ahead, and those in charge should be clear about what the company holds dear. Despite the shock that has sent most industries reeling, this is the time to keep business priorities aligned with ethical philosophies. We have the opportunity to embed ethical responses into our working lives in ways that will have a lasting impact on society going forward.
About the Author
Michelle Wright is founder and CEO of Cause4, one of the UK’s first B Corporations, advising charities, entrepreneurs and start-ups on strategies for growth. Michelle started Cause4 to transform the charity sector. Michelle was selected as one of Salt’s World’s Top 100 Compassionate Business Leaders and was the first entrepreneur in the UK to receive the IWEC award for outstanding entrepreneurial achievement.