Building an Ethical Business

27 March 2014 by Mathias Meyer

With our own company growing, both in terms of our team size and our customer base, I keep finding myself thinking more about what kind of company we want it to be.

This touches on all aspects of the business, relationships with our customers, marketing our product, how we treat our community, both globally and locally, and most importantly, treating and growing our team.

What it boils down to for me is openness on the one hand and fairness on the other. Everywhere a company is active, there are always humans involved. Any issues that come up are best served by being brought out in the open, treated with empathy, the will to solve the problem, and the assumption that people are generall well-intentioned in what they do.

This goes into all directions, because at the very core, empathy is the most fundamental skill, both for the humans working in a company, and for the company itself.

Empathy is sometimes described as a personal trait, but it's a skill, a skill that can be learned, that can be honed, and that can be instilled as a core value of a company.

Empathy means taking your customers' issues seriously, acknowledging their problems, helping them fix any issues they might have, no matter if the issue is on their end or on yours.

Customer loyalty isn't something you can buy, it isn't something you can put a number on. Customer loyalty is something you have to work on every single day.

Empathy means building relationships with your customers rather than look at them as transactions. When they have issues, you have issues, it's simple as that.

It also means that when there's a bigger issue at stake that affects your company and your customers, it's tackled out in the open, head on, rather than swept under the proverbial rug. This includes security issues, operational/production issues, but also issues that affect your company in other ways.

We like to think that a company's brand and image can be controlled. The more we repeat our values, what we stand for, the more our customers will believe it.

That's bollocks. You can spend years trying to make yourself look pretty on the outside, but that facade can be destroyed by that one small thing that you didn't want to make public at the time.

Empathy means being open and honest about anything that affects your company. Does that mean you have to tell the world exactly how much money you're making or losing?

In what detail you make what you do public is up to you. We tend to fear that publishing too much could play into the hands of our competitors, that it could confuse customers, despite there being next to no proof this is actually the case.

I admire Buffer's openness in this regard. They're publishing their team's salaries, the letters they send to their investors, numbers about growth and losses. Can that hurt your company in any way? No one knows, because it just hasn't been done before.

Empathy means that your company is aware of its surroundings. Even in times of companies selling things to a global audience, with a distributed team, companies have a home, where they pay taxes, and a community they're inadvertently a part of.

An ethical business is about giving back to the community it's working in. I found inspiration on this in "The Knack", where the employees can get involved in community work on the company's time, and they get to choose a good cause to give something to at the end of the year.

Amy Hoy is doing something similar, part of their profits go to local charities. I found this very inspirational, and we started doing the same with part of our profits last year.

Beyond that, there's community work, helping kids and schools in need, lots of opportunities to jump in and help out in a company's local surroundings.

Empathy means treating your vendors with the same courtesy as you treat your customers. The same applies to them, you want to build relationships rather than think of vendors as a transactional means for your business.

Vendors are people, just like your customers, the people in your community, the people working in your company.

The people on your team are the most important for any company. Some would argue differently, but I'd say that for an ethical business, how you treat the people working for you is what shapes any interaction your business has with its surroundings, with its customers.

There's a quote in "Small Giants" that stuck with me:

For all the extraordinary service and enlightened hospitality that the small giants offer, what really sets them apart is their belief that the customer comes second.

On first sight, it sounds harsh. Clearly, a business' customers are the most important for its continuing success, no?

It takes a happy and driven team to make for happy customers. Relationships can only be made between humans. While customers can use your software or product, or whatever it is you're selling, whenever they have issues, they expect a human to help them out.

Building healthy relationships between your company and your customers requires all people in the company to have healthy relationships with each other, with the people they work with, the people they work for.

Just like with your customers, you can't buy your team's loyalty. It requires you to build relationships with them. Relationships are based on trust.

I'd argue that you can only earn trust by putting your trust in someone in return. Allowing people to do the right thing, yet still give them room to fail and learn, is the simplest beginning to build trust.

When it comes to the people you work with, trust is reflected on different levels, not just work, but also how your company treats their personal lives.

Trust, in turn, comes down to empathy.

Empathy is the recurring theme in this post, it's the recurring theme in any human interaction. Empathy means you take your time to appreciate, to contemplate what another person is thinking, what they're saying.

Whether it's your customers or one of the people you work with. Listening to their concerns and treating them as if they're yours is the start of building trust. If people learn that you can listen to them, without judgment, and help them figure something out, you're off to a good start.

As Chad Fowler said, empathy is your most important skill.

This is something I'm trying to work on every day, work against my instincts, listen to people first, ask questions, before I pass in my own view of judgment. It's hard work.

For an ethical business, a lot of things come down to "doing the right thing."

The right thing in the global, local or your company's micro scope can have lots of different meanings, and figuring those out will be the hardest. We've spent a lot of time working that out for our little business, and we're still at the very beginning.

Does an ethical company strive for profits? Of course, the question is how they're used. A company needs cash to survive in the long run, but it also needs to take care of its surroundings to function well.

What makes an ethical company then? I believe the core values lie in openness, honesty and, most importantly, empathy. Those are skills that need to be acquired, practiced and honed. We're only at the beginning of this journey for ourselves, and we're working hard to stick to these values.

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