Why Business Ethics is not an Oxymoron
Mention the words “corporation” and “noble purpose” in the same sentence and watch the eyes of your audience go into a collective roll. True — there is a plethora of big companies with PR departments preaching words like inclusivity, respect, sustainability and transparency in their communication. But words are wind, and often, almost nothing is done to align their purpose, values and habits.
While some larger organisations may appear to have potent core purposes, often, when you pull back the curtain, you can clearly see their business practices and values are out of alignment. The multibillion dollar Sun Cable project collapsed under its weight when it’s two major founders – Andrew Forrest and Mike-Cannon Brookes had a falling out about the company’s path forward. Perhaps the “sustainability warriors” lost common ground when personal vanity and an appetite for profits eclipsed their original core purpose?
While corporations are not people, they do consist of actors perfectly capable of preserving necessary checks and balances to provide oversight for maintaining the integrity of the core purpose on a systemic level. And there’s no shortage of profitable companies with spotless records of ethical practices aligning with their core purpose. Patagonia clothing company continues to innovate and grow its business of producing environmentally friendly clothing, and PepsiCo is considered one of the most ethical companies in the world.
The core purpose of a business extends far beyond what it means for customers. It significantly contributes to employee satisfaction by offering meaning, inspiration, and direction. According to studies, businesses with strongly aligned cultures and purpose develop their company value and profits at 17% and 30% higher rates. This emphasises how crucial it is to create a fundamental core purpose ingrained in a company's culture.
A core purpose is also a large deciding factor for job seekers when deciding where to apply. Although compensation and perks are crucial, talented people are motivated by a feeling of mission and purpose. They seek employment with organisations that uphold their ideals and provide them with a sense of direction.
So with all the benefits why do some companies manage to stand with their convictions while others lose their way?
A core purpose is not some stone statue in the courtyard, built by a visionary founder and standing strong for centuries in defiance of all elements. Purpose is more like a flower in the garden, requiring constant care, attention and nourishment. Here are some gardening tips:
Ask yourself:
What is my business’ core purpose besides making money? Can I word it in a short, specific sentence?
What actions have I taken that are in line with this purpose? What can I do more in the future?
How many people in my company can name this purpose?
To what extent am I using my core purpose for attracting, inducting, engaging and managing existing and potential talent?
What is my company’s impact on its employees and the outside world?
The purpose from an organisational perspective relates to “why” of a business. It is the reason for its existence beyond just making a dollar. A business with a purpose that believes in it and lives it will create inspiration and hope for its employees, shareholders and the community. A purpose engages people and generates incredible discretionary effort where people go the extra mile because they believe in what the company believes in.
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