How High Ethical Standards Can Lead to Entrepreneurial Success

I have said it before, that entrepreneurs need to lead, not work. This means that instead of being the micro-managing type of boss, they need to set the example for all employees to follow. A good leader can inspire employees to fulfill the mission of the company without the need to micro-manage.

When it comes to being a great leader, ethics are the key. If people see you are willing to cross the line in an unethical way, they begin to feel it is acceptable to do the same. Before you know it, the entire organization will become unethical and crossing the line will be part of the company culture.

Good Ethics are Good Business

Infographic courtesy of Norwich University Online Master of Science in Leadership Program

It has also been shown that companies with higher ethical standards are stronger and last longer. This means that entrepreneurs with higher ethical standards stand a better chance of being successful, than those who don’t.

So how do ethics come into play and how do some fall to such low places?

Temptation is There From the Start

Temptation is everywhere. But, for startups, they are often faced with some of the hardest ethical questions as they haven’t dealt with them before. According to ethics Professor, Kirk O. Hanson, entrepreneurs are always being pushed to the limits of business ethics.

High ethical standards business practices

A look at what employees said about their experiences working for their employers. Image courtesy of The Wall Street Journal.

“[Entrepreneurs] live under constant pressure to stretch the truth, manipulate their financial accounts, flout the law and otherwise engage in unethical behavior,” writes Hanson, for The Wall Street Journal. “There are unavoidable ethical dilemmas in every profession and industry, of course, but the dilemmas entrepreneurs face are more formidable and more difficult to manage.”

What Makes Entrepreneurs Cross That Line

Money is often the influence to be unethical. This is seen especially in places such as the med-tech industry where companies often place profits ahead of people’s safety. If you don’t believe this, look at the many defective medical device lawsuits filed each year which is often one of the only ways to get such companies to pay attention.

Wanting to be successful (or the antithesis – not wanting to be embarrassed by failure) is also a major reason why entrepreneurs become unethical. The fear of failure or having to answer for your mistakes can be stressful. Sometimes entrepreneurs find it “easier” to commit ethical violations than to face the music of a failed venture.

Why Ethics are Important

Despite the obvious, ethics are important because your customers are watching. With social justice in full swing thanks to technology, people will slay you publicly if you cross the line.

When a reputation is destroyed because of ethics, other businesses flourish. People will go out of their way to reward others with their business in order not to allow the unethical business to profit.

So, ethical entrepreneurs have more of a chance to become successful simply because those who are not, don’t. People are always more willing to do business with someone they find to be ethical. Ethical companies are stronger and they last longer, according to writer and entrepreneur, Vivek Wadhwa.

“When a company’s ethical compass is pointing true north, everything else falls into line,” writes Wadhwa in an article for Bloomberg. “This isn’t to say that companies with great ethics don’t fail. But, it does seem to indicate that companies without good ethics are far more likely to fail, due to their inability to sustain or hear an inner voice to guide them through the dark times to the light.”

Being Ethical Doesn’t Mean You Don’t Take Risks

Some entrepreneurs confuse ethics with not being able to take risks. This is a fallacy that needs to be dealt with immediately in your career. Taking risks is a big part of success and without them, many of today’s successful entrepreneurs would not be where they are.

You need to toe the line as a business, but still stand fast to your principles. You want to make the news for being a risk taker, but you also don’t want to make the news for the wrong reasons (cheating, lying, etc.).

Summing up Ethics and Entrepreneurship

Being ethical is important in all aspects of your life, but ethics in business can set the tone for your success. Don’t fall into the common traps of putting money first. Be ethical and you will likely be more successful than others who are not.

Have you faced ethical dilemmas in your career? Tell me how you were able to deal with them.

Featured image credit / Symphony of Love (Flickr)

Leave a Reply

Your email address will not be published. Required fields are marked *