Is good ethics equal to good business? Though many of us would wish for the truth of this statement, wishing does not make it so.
The statement is clearly false on one level. No matter how ethical the company, it will fail if it does not have the right products and services. The most ethical buggy whip company would not survive today’s marketplace. But it is more than products and services. Good businesses execute well. They go beyond good planning to good operations. They keep their inventory down. They manage costs well. They anticipate market changes. Being a “good business” is much more than being ethical.
Some would thus qualify the statement by saying that good ethics is necessary for a good business, but not sufficient. That is, if the business is ethical and also does a lot of other things well, it will be a good business. In this case we run into another question. What do we mean by “good” in the term “good business”? For many, the term is synonymous with profitable, or at least economic viability. With this definition, the answer, unfortunately, may still be no. Oftentimes the best, most ethical business may be hit with outside forces beyond its control. Today’s economic storm provides a dramatic example of one such force, and great companies can fail or falter in the midst of such a storm, even doing so many things well.
This creates a blurry picture. Some companies today are failing because of their products or execution. However, in the same mix of financially struggling businesses are others that are very different. They have done things well, they have focused their products, and they have demonstrated exemplary ethics. They, too, are caught in the same storm.
In this issue we look at three such businesses, all located at the center of the current storm. We have captured the stories of outstanding business leaders in auto sales (Don Flow of Flow Automotive, featured in the March/April 2004 Ethix), home building (Perry Bigelow, owner of Bigelow homes near Chicago, recognized by the Builders Association as the home builder of the year in 2005), and real estate (Bev Bothel, a 25-year successful real estate manager in the Seattle area). The focus of the economic pressures have hit right at the heart of each of these businesses. And in spite of their great ethics, they have been hit hard. Though it is not a joyous picture, a great deal can be learned from their leadership in troubled times.
I believe that good ethics often produces good financial return, but this is not always true. Otherwise, ethics would simply be another technique for maximizing profits. It is and must be much more than this. How an organization deals with adversity is as much a story of good leadership as how it creates success.
Perhaps after all, this is what good business is all about. It can’t simply be recognized by the bottom line, even over a long period of time, but rather by the way it deals with the good times and the bad times. I don’t have to go out on a long limb to say that the leaders profiled here were good leaders at the top, are good leaders now, and will emerge on the other side of this storm as good leaders going forward. This is a sobering and important lesson in business ethics.
By the way, another characteristic of such leaders is that in the midst of the storm they continue to look for opportunity. And this opportunity will be the foundation for better businesses of the future.
Next issue, we will look at the field of branding and advertising and our Conversation will be with Daryl Travis, CEO and director of BrandTrust, located in Chicago. He is the author of Emotional Branding.
Ethix Executive Editor