The success of any organization is built on the confidence and trust of employees, customers, and the general public. The only way for an organization to gain that trust is to demonstrate honesty and integrity in everything the organization does. Organizations that operate this way do so because it is the right thing to do and not because of legal requirements. We are all familiar with the fall of Enron and Bernard Madoff's Ponzi scheme. As their unethical business practices came to light, these very successful organizations promptly collapsed.
Integrity affects every area of business operations and all customer groups.
Integrity in Accounting Practices
Businesses owe it to their employees, customers, and shareholders to be honest and transparent with their finances. Organizations that “Cook the Books”, whether by design or by accident, perform a disservice to everyone. Sloppy accounting is as harmful to a business's ability to perform as the malfeasance of the Enrons and Madoffs. Any organization, large or small, that hopes to stay in business must practice proper and responsible financial management.
Truth in Selling
Organizations that aggressively market their products and services are obligated to deliver exactly what they promise. Whether it is a print ad in a magazine or a video ad on television, the product described should always be what is delivered to the customer. We responded to an advertisement for a new car once. The ad showed a great price, but when we got to the dealer, we learned that they were “out” of that particular car and tried to sell us a different, more expensive model. We bought neither, of course, but the cynical "bait-and-switch" ploy convinced us never to visit that dealer again.
From customer service to employee benefits, management practices are at the core of organizational integrity. Unresolved product or service issues can tarnish the reputation of the organization, and employees recognize the importance of management doing what’s right by "walking-the-talk" and following up on promises made. Google was named one of the top 100 employers in 2010. One of the company's signature practices is allowing engineers to devote 20 percent of their time to projects of their choosing. The program reflects Google's famous slogan, "Don't be evil," and the company's positioning as an innovative leader in everything it does.
The integrity of an organization is best experienced AFTER the sale. For example, we built a house a few years ago and the customer service with the builder was impeccable until we closed on the property. Every request and inquiry was followed up with quick and friendly responses. However, once we closed on the property, it was difficult to get phone calls answered and construction issues resolved. Following up on service quality after a customer makes a purchase is critical to maintaining and growing a customer base.
Business leaders should maintain honesty and integrity in every aspect of their lives. When leaders fail to live up to high ethical standards, the reputation of the organization is harmed, as well. Dennis Kozlowski, the former CEO of Tyco, and former Tyco finance chief Mark Swartz are perhaps the poster children for failed ethical leadership. In 2005, both were sentenced to up to 25 years in prison after stealing hundreds of millions of dollars from the company. The scandal made public its executives' poor business decisions – and profligate spending – and generated negative press for Tyco, which affected its value and profitability.
Product integrity provides confidence to purchasers of products and services. This is where brand recognition and public perception comes into play. The homebuilder we used was one of the largest in our area, which is why we chose them. When service after the sale was less than optimal, it spoke volumes to us about the product integrity of this builder. Had we known what we know now before the sale, we may have negotiated differently or made sure the contract had language to support response to issues after we moved in the house.
4 Ways to Incorporate Integrity into Business Practices
How does an organization make integrity a key part of its everyday practices?
1) Develop a Values Statement that demonstrates the values that the organization operates by. A Values statement helps employees understand the principles used in decision making.
2) Create a Code-of-Conduct Statement. This document establishes boundaries for employee behavior.
3) Train employees on the importance of honesty and integrity. This should be done as part of the new employee orientation process.
4) Create confidential processes for employees to report unethical behaviors. This is important so employees are not hesitant to report questionable or inappropriate business practices.
Business integrity should be a key part of an organization’s culture, demonstrated in every business practice. Organizations that strive to do the right thing because it's the right thing to do survive and prosper. Those that don’t, don't.
Patricia Lotich is an MBA who is passionate about helping small business owners see their vision come to life by creating infrastructures that support business development and growth through strategic customer focus. She writes for, and is the founder of, The Thriving Small Business.