About Purpose: Revenue, Profit, and Productivity Sapped by the Ethics Gap

Revenue, Profit, and Productivity Sapped by the Ethics Gap

There’s ample evidence that ethical companies see positive results in their bottom line. But what about the opposite? Do companies’ revenues, profits and productivity suffer when there is not a conscious, systematic effort to do the right things right? I say, “Yes.” But who am I? I challenge the researchers out there to take a look at a few areas which, in my experience, support the idea that an ethics gap saps results. I’ll even supply the hypothesis on which the research could be based:

HYPOTHESIS: Unethical behavior has a measurable effect on companies’ bottom lines in terms of decreased revenues, profits, and/or productivity.

I’m not talking about companies that are engaged in wholesale evil practices – that’s pretty obvious. They are not only getting caught, but many are crumbling and self-destructing. No, I’m talking about the smaller things – those often unnoticed omissions, or largely accepted commissions. Here are a few examples that I would like to see researched.

Unfair treatment of vendors. Most business owners, when asked about their values, will always name “integrity” before any other. Yet many have a conscious (if not, written) policy on stretching out vendor invoices to the max. This is an all-too-common way of financing day-to-day operations.
Deceptive sales practices. Many CEOs use the phrase, “That’s just the way the game is played in our industry.” That becomes their rationale to engage in what everyone recognizes is wrong, but "necessary to survive."
Abuse of employee hours. There are legitimate, mission-critical reasons for employing part-timers, seasonal employees, etc., but there are many companies who hire and schedule with the express purpose of avoiding paying full-time wages, benefits, raises, bonuses, and so on.
Cash deals. Whether it be paying an employee or buying some product or even bartering something on the side, every business transaction must be reported and taxes paid on the value.
Employee “perks.” I find that this is usually done in ignorance rather than in any purposeful way to duck taxes, but most perks are seen as compensation by the government and must be declared and taxes paid on them.
Little white lies. I have been guilty of this myself in the past. We want to present ourselves in the best light possible to a prospective customer and find ourselves inflating the truth regarding our capabilities or experience.

These are acts of commission, that is, things we do that are wrong. There are just as many acts of omission or things that we fail to do, that are just as harmful in the long run. They include not having a code of ethics or a clear ethics policy; not having guidelines to empower employees to make sound ethical decisions; not having a safe forum in place to help employees examine ethical issues and ask practical questions; not making a clear statement about not doing business with unethical companies; etc.

Examine your ethical conscience today. Recognize the dangers of conducting business in any way other than what is right. You will see positive results in the long run – increased profit and productivity, improved employee and customer satisfaction, and most importantly, increased peace of mind and self-esteem.

(Our new service, SWiM™ Starting With Me, provides a complete organizational ethics audit aimed at building and maintaining a healthy, practical ethical environment. Click on the link, e-mail or call me, or paste this address into your browser: http://www.swimstartingwithme.com/corporations.html)

About Purpose is about your purpose.

Aim: Identify and articulate your purpose.

Arm: Shape yourself around your purpose.

Act: Achieve your purpose.

Revenue, Profit, and Productivity Sapped by the Ethics Gap