Doing Well by Doing Good
Every entrepreneur hopes to do well. We'd all like to make a lot of money and have a big, profitable customer base. But over the years, I've realized that most entrepreneurs want to do more. They'd not only like to do well; they'd like to do good. They'd like their business to contribute to their community, respect the environment, play a positive role in the lives of their employees and customers.
I'm not naï ve or simplistic. I strongly believe that building an honest, responsible business, with a healthy bottom line in and of itself makes a valuable contribution to our economy and society. Such businesses buy supplies and materials, often employ others, and obviously meet a need of their customers.
Over the years, however, I learned that companies with a sense of integrity and purpose actually have a competitive edge over companies that are solely focused on the bottom line.
Being socially responsible helps you:
- Attract and retain employees. Having a strong corporate culture committed to good corporate citizenship enables employees to feel that they are part of something important. Company programs allowing employees to use job time to be involved in community causes are viewed as a valuable benefit. Prospective employees look at a company's values and social commitment when comparing job offers.
- Attract and retain customers. People like to do business with companies they respect. Some customers will be attracted by specific company policies, such as looking to buy products that aren't tested on animals or are recycled. But all customers are attracted to companies that consistently deal with them honestly and fairly.
- Reduce employee misbehavior. Businesses that act with integrity and honesty toward their employees, customers, and suppliers are more likely to have their employees also act with integrity and honesty towards the company and their fellow workers. An atmosphere of honesty helps keep everyone honest.
- Keeps you out of trouble. Being a good corporate citizen -- whether in your advertising, employee treatment, or environmental policies -- makes it less likely that your company will get in trouble with regulatory agencies, taxing authorities, or face lawsuits or fines.
Being a good corporate citizen may involve participating in programs outside your own company, such as contributing funds to community programs, enabling employees to volunteer for such programs, or adopting or identifying your company with specific issues or programs.
First, however, good corporate citizenship begins with a company's own internal practices and policies, including:
- Obeying the law, acting ethically, and being honest and responsible in all your dealings;
- Treating employees fairly and with respect; compensating employees fairly; considering the well-being of employees when making decisions;
- Being honest and fair to your customers and suppliers, and in your advertising and marketing;
- Being aware of the impact your actions have on the environment.
A critical aspect of being a good corporate citizen is making certain that what you sell is of the quality you promise. Some steps to insure it are:
- Designing your products or services to achieve the results desired and advertised;
- Insuring high and consistent quality of manufacture and production so that the design specifications can be met;
- Using reliable and trustworthy suppliers and subcontractors so that the standards you hold, such as manufacture quality and environmental standards and treatment of employees, are maintained.
Your responsibility to your customer begins even before they buy from you -- with what you tell them about your products, services, or your company itself. Many companies get in trouble because they use misleading, confusing, or even false advertising or sales techniques to attract customers. They may not be intentionally dishonest, just eager to make a sale resulting in overstating what a product can deliver.
Before you begin an advertising program, familiarize yourself with what constitutes deceptive or dishonest marketing. The Better Business Bureau has worked with the advertising industry as well as leading corporations to develop an Advertising Code, which you can find at www.bbb.org/advertising/adcode.asp.
When your company does good -- treats employees, customers, and suppliers fairly, as well as participating in community and social activities -- you'll find you also do well. Good companies can become great companies.
Copyright © Rhonda Abrams, 2001
Rhonda Abrams writes the nation's most widely-read small business column. Her newest book is The Successful Business Organizer. For free business tips from Rhonda, register at www.RhondaWorks.com or write her at 555 Bryant St, number 180, Palo Alto, CA 94301.