Look back at some of the biggest corporate scandals in history, Bernie Madoff, Enron, and Worldcom.
Madoff used his investment firm, Bernard L. Madoff Investment Securities LLC, to run one of the biggest Ponzi schemes in history. He managed to dupe people out of close to $65 billion.
Enron hid a significant amount of debt, and in 2001 the company’s deceit caught it with it forcing its stock plummeted to less than $1 per share. After reining six years as American’s most innovative company, the Texas-based energy giant was forced into bankruptcy.
Worldcom followed suit a year later when $7 billion in questionable accounting errors forced the company to file the biggest corporate bankruptcy in US history. CEO Bernard Ebbards was sentenced to 25 years in prison. And, he’s since become known as one of the most corrupt CEOs ever.
So, what do all three of these corporations have in common? It’s more than a clear understanding of bankruptcy law. They all lacked ethics. And, without a clear understanding of the importance of ethics, your company is at risk.
So what power does strong ethics have in your business culture?
Create a Culture of Integrity
If you want your employees to act with integrity, you have to create that culture. And to do so is as simple as acting with integrity yourself. As a leader of any corporation, it’s your job to create a top-down, bottom-up approach.
What that means is to create honest and ethical relationships with people in every facet of your business—vendors, suppliers, laborers, etc. and they will reciprocate. They will see your business as a reflection of you which will make them want to do right by you.
Remember these four things when you are working to create your workplace culture.
- Treat everyone with respect
- Do more than others expect you to do
- Hold yourself accountable
- Listen to other
Promote Open Communication
Every business is faced with ethical challenges. They can be small trials like who is stealing the sugar packets from the break room to large ones like who is fudging the numbers.
To make an employee feel comfortable enough to speak up, you must create an environment where open communication is embraced. But how do you go about creating such an atmosphere?
First of all, you have to make it safe to communicate. One easy way to do this is to make employees feel comfortable talking mistakes they have made on the job. If they can tell you how the dropped the ball on a particular project, and they can feel like you are not judging them or holding their jobs over their heads, they will begin to trust you.
Promote a Problem/Solution Mindset
There will be problems in every department in every corporation. It’s a fact. Nothing goes off without a hiccup. And, it’s unrealistic to think otherwise.
But, if you allow your employees to see glitches as opportunities to work together then they there is no longer a negative stigma attached to complications. Instead, they are opportunities to work with leaders in the company, which builds trust and opens the lines of communication.
So, if some big ethical dilemma should creep up in the future, your workers will see you and your leadership team as people who will help not people they should fear.
A strong ethical foundation makes it easy for companies to embrace change. It creates a setting where people are motivated to grow. But, there’s a trick when it comes to inspiring change. You have to spend just as much time working on yourself as you do your employees.
This might sound like an impossible feat, but really it just means embracing a few new ideas.
To begin, you must remember one thing, as we said earlier, communication is critical. You need to have an open-door policy that invites workers to share their thoughts.
Take a second and reflect on how well you engage in a two-way dialogue. Are you the kind of boss who barks orders then head off to his executive suite? Or, are you getting your hands dirty with your team? You need dirty hands to inspire change.
Next, get to know your employees. The more you know the people who are running the show, the easier it is to see their strengths. Knowledge is power. When you see what people are good at, you can assign them tasks that capitalize on their strengths.
Lastly, empower your employees. When people using their strengths, they need to be allowed to call the shots. You quickly notice that engagement will increase.
There’s no doubt that corporate scandal has painted a negative perception of business. But, that doesn’t mean you have to live up to that perception. If you take some time and start practicing strong ethics, your company will greatly benefit.
And while developing this ethical environment may be challenging, it’s possible, and it’s the right thing to do.
When your team feels like you want to move on the path of positive progress, they will want to reciprocate with hard work, and open communication. And when the lines of communication are open, and everyone is looking out for the greater good, your company will benefit. The logic is pretty simple, you can never go wrong by doing the right thing.