Some people regard the end goal of business as making profit, and the more the better. This is not a wrong perception, but profit is not and should not be the only end goal a business strives towards.
According to Adelaide Lancaster, in her article in Forbes.com, many entrepreneurs started out working for others but were scarred by their experience of working in companies that required them to compromise their beliefs.
In the end, they set up their own companies because they wanted to work in an environment aligned with their own values. They hoped to create a business that prioritises a high standard of behaviour while also keeping a healthy bottom line.
Honesty is the best policy
Honesty is not only taught in school to encourage students to grow up to become good citizens, but it actually makes perfect business sense to promote this value in the organisation.
Encouraging employees to practise good values, not only towards customers but with each other, is good for morale and relationships among colleagues. However, leadership must also walk the talk by leading through example.
Being known as a company that values and upholds honesty is good for the company’s image and attracts customers who believe in these values.
In his TEDx talk in Zurich, economist Alexander Wagner talks about what motivates people to be honest in business. He found it troubling that one in seven large corporations commits fraud each year.
Although the statistics came from a United States (US) study on US companies, he believed that it should be no different in Europe. On the other hand, there are six out of seven companies that remain honest, despite all temptations to start engaging in fraud.
Wagner has conducted research for the past 10 years together with scientists, economists, financial economists, neuroscientists, ethicists, lawyers and others to try to understand what makes humans tick and how to address the issue of fraud in companies. They found that people are motivated by certain intrinsic values.
“In our research, we looked at the idea that people have so-called ‘protected’ values. A protected value is not just any value. A protected value is a value where you’re willing to pay a price to uphold that value. You’re willing to pay a price to withstand the temptation to give in,” says Wagner.
The consequence is you feel better that you earn money in a way that is consistent with your values.
“We can actually measure these protected values by a survey measure. We found that people who have a set of protected values that’s one standard deviation above the average will discount money they receive by lying by about 25 per cent. That means a dollar received when lying is worth only 75 cents to them, without any incentives you put in place for them to behave honestly. It’s their intrinsic motivation,” he further added.
Wagner explained that there are two very different visions in the business world. On one hand, you can use benefits and incentives to get people to behave honestly and the way you want them to. On the other hand, you can select and recruit people who have the values and the desirable characteristics and competencies that go in line with your organisation.
Khor Hui Min is a sub-editor with Leaderonomics. She is also a writer, poet, nature lover, face painter, photographer, yoga enthusiast, and meditator. To connect with her, send an email to firstname.lastname@example.org.