There’s plenty of evidence pointing to the importance of ethics – how you go about conducting your business – on your bottom line. A recent study found that 74% of consumers are unlikely to buy products or services from a company involved in controversial supplier practices, and 66% would stop buying from them even if it’s the most convenient or cheapest option*. Consumers are, it seems, increasingly gravitating towards companies they perceive to be behaving ethically.
It’s a lesson Nike learnt back in the 1990s, when the company came under public scrutiny for neglecting worker conditions in favour of its bottom line – revelations that prompted a public backlash and an earnings freefall of 69% in 1998†.
Fast forward to the present, and Nike has well and truly learnt its’ lesson. Its website highlights a commitment to transforming manufacturing with ‘workers at the centre’ and the leading sportswear brand clearly regards ethical transparency as an assetŦ.
It seems Nike’s halo is now firmly in place.
What about yours? Here are five steps you can take to build ethics into the way your business does business everyday.
Include others in business decisions (note – may include putting aside personal ego for the greater good!) An open-door policy is a good first step towards a more democratic approach.
Encourage feedback and acknowledge the ideas of others, as diverse as they are. It’s all about respect.
Be open about it.
Put ethics on the table for discussion and encourage employees to contribute ideas. As a leader, you can play a big role in putting ethics on people’s radars.
Acknowledge the complexity
There’s no clear ‘right’ and ‘wrong’ in business. If you have multiple stakeholders and a complex supply chain, there’s probably going to be many shades of grey in every decision you make. By acknowledging this complexity, you are better positioned to steer your business down the right path.
Follow through on ethical decisions.
This is really about walking the walk and following through on any commitments that have been made.
Finally, did we mention respect? Yes, it’s all about starting at a base of honesty, fairness and respect. With that as your foundation, you can’t go too far wrong in ethical leadership.
* http://www.warc.com/Content/News/N34823_US_consumers_claim_ethical_response_.content?PUB=Warc%20News&CID=N34823&ID=e93be3e5-b0af-4b9a-96e7-76bdce8a5be2&q=%22ethical%22&qr=supply, accessed May 2016
† http://www.forbes.com/sites/dougguthrie/2012/03/09/building-sustainable-and-ethical-supply-chains/, accessed May 2016
Ŧ http://about.nike.com/pages/transform-manufacturing, accessed November 2016