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Business Insights from Andrea Hill

A little grade-school philosophy may be all you need to implement a successful business ethics program. The rewards will be significant.

What Your 2nd Grader Can Teach You About Business Ethics

Originally Published: 09 February 2015
Last Updated: 26 October 2020

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If you go online and search for information on business ethics, you’ll find a few interesting things. The first thing you’ll notice is that the people doing the most thinking about ethics in business happen to live and work in academia. There is a lot of theory about business ethics.

Of course, theoretically, if every business person behaved in an ethical manner, we would have little need for any sort of regulation or legislation around business activities. I know. That sentence cracks me up too. In reality, we take the most egregious offenses and legislate them. Discrimination requires legislation, because there will always be some numskull who thinks it’s OK to only hire people just like him. Stealing requires legislation because . . . well, I can’t come up with a reason, but somehow it does.

I don’t think we need a lot of theory around business ethics – though ethics theory has kept philosophers busy for thousands of years. Fun to study, harder to disseminate. No, I think business ethics can be made pretty, well, basic.

Basic Character

When my now-adult children brought home their Character Counts homework from elementary school, I was a bit mystified. I agree wholeheartedly that children must be taught trustworthinessrespectresponsibilityfairnesscaring, and citizenship from their earliest days. But I didn’t understand why they were using precious school time for a big Character Counts roll-out. Then I hung out with some of the other parents, and I began to understand why. But I digress. The fact is that basic character concepts such as these, when thoughtfully applied all day every day, are a powerful business ethics application.

The tough part is achieving the thoughtfully applied all day every day aspect. This is work for real grown-ups.

Let’s take a look at what Character Counts says about Trustworthiness.

Be honest. Don’t deceive, cheat, or steal. Be reliable – do what you say you’ll do.
Have the courage to do the right thing. Build a good reputation.
Be loyal – stand by your family, friends, and country.

Plain and simple, right? Maybe not so much. The toughest one is the one right in the middle: have the courage to do the right thing. That one is tough, because when we do the right thing, people might (probably will) get upset with us. Because doing the right thing often comes with some personal or professional sacrifice. Because doing the right thing will often set you apart as naïve or rigid in the eyes of your peers. That’s why courage is part of that sentence.

Now let’s take a look at what Character Counts says about Fairness.

Play by the rules. Take turns and share. Be open-minded; listen to others.
Don’t take advantage of others. Don’t blame others carelessly.
Treat all people fairly.

Don’t take advantage of others. If you stop and think about it, really think about it, it’s shocking how often we take advantage of others. If you stopped shopping at The Gap, H&M, or Abercrombie & Fitch when you found out they used child labor, then you have a grip on this concept. As an 8-year-old, you likely interpreted this concept to mean not tricking your 4-year-old sibling into doing something naughty. As adults, the executives at The Gap seriously failed to abstract the concept.

The Character Counts section on Responsibility says to think before you act – consider the consequences. In 3rd grade that means not going to the park instead of doing your homework. As a corporation, that means considering the consequences for all your stakeholders (consumers, employees, stock holders, vendors – in other words, people) well into the future.

Well into the future. That’s one of three things that sets the elementary school version of Character Counts apart from the adult version of Business Ethics. Children are capable of being responsible for a much shorter future than adults. Their responsibility typically extends to days or weeks, not months or years. When adults make decisions, we need to be responsible for months and years, decades. Business leaders, particularly those in corporations that have significant global reach or access to capital, need to think in terms of generations.

The second thing that sets the elementary version of character training apart from the business version is distance. Ask a child what you can do to help a person in need (part of Caring), and their answer will likely point to someone very close to home. As adults and business leaders, we must be able to abstract this concept to people very different from us and often very far from us. As a society, we’re not even very good at this close to home. To be ethical in business we must be able to consider people far from us, and extend things like respect, responsibility, caring, and trustworthiness to them.

The third thing that sets the elementary version apart from the adult version is to consider these principles in conjunction with one another. Imagine Vikram Pandit (CitiBank CEO) thinking through the purchase of a $50 million private jet after taking $45 billion in taxpayer funds.

Lesser Self:           “I hate the jet I have to fly around in right now. It’s not as comfortable as I would like.”

Better Self:           “It’s probably not as bad as flying around in coach on a commercial airline, like most business people have to do.” (be compassionate)

Lesser Self:           “But I work so hard for my $11 million dollars per year!”

Better Self:          “I dunno. Is that actually logical? Do I really work 261.9 times harder than the average person? I mean, I don’t actually work over 10,000 hours per week. I work a lot, but so do people who have to work two or three jobs. I have to think hard, I guess, but so do small business owners with their lives mortgaged to the hilt, many of whom are my borrowers.” (be accountable for your words, actions, and attitudes)

Lesser Self:           “Well, maybe I don’t work more or harder than everyone else, but my work matters 261.9 times more than everyone else’s!”

Better Self:           “Now I’m just being an ass.” (resisting the urge to suck one’s own exhaust*  *Not found at the Character Counts website)

Better Self:           “My company just accepted a major payout from the American taxpayer because we’re in financial trouble. Maybe the right thing to do at this moment is suck it up and fly around on my older model, less comfortable private jet. I can buy a new one later.” (Set a good example for others.  Use self-control. Think before you act. Etc. etc.)

If you want to develop stronger business ethics in your place of work, here’s my recommendation. Using the Character Counts website, or any other good resource of solid universal values, create a set of principles that you would like your business to live by. When you need to make a decision about how to treat someone, who to hire, whether or not to implement a policy, which vendor to choose, how to respond to a customer complaint, how to address an internal manufacturing deficiency – the list goes on – when you need to make business decisions, refer to your business principles.

Make sure you consider each decision as it extends into the future, as it affects those far away, and using multiple principles in conjunction with one another. Does this take a bit of time? Yes, particularly until it becomes second nature. But this method will ensure you sleep better at night, it serves as a powerful role model, and in my experience, it ultimately returns significant financial rewards to the business. Not bad for a little grade-school philosophy.