Ethical Entrepreneurship Respect and Resonsibility Are Strategic
Ethical Entrepreneurship: The relationship between people inside and
outside the venture and involves the founder being in relationship to many people both directly and indirectly—at the outset and the future. Just as it will for anyone who joins the venture sooner of later.
This will mean figuring out how the founder(s) intend relationship will be lived and expressed, not only by founders, but also, inevitably, throughout the enterprise, day-in and day-out—now and for the longer term. Founders can choose an active intention, or just let relationships happen as they will.
Either intentionally or not, this will form what the pundits call ‘the business culture’. Hence relationship is a strategic issue for startups and cannot be left to chance. In an HBR article entitles Building an Ethical Comapny, the authors say, “The benefits of ethical organizations are well documented: Such organizations are more attractive than others to employees, are less likely to become embroiled in scandals, and are more likely to be rewarded by investors, who increasingly focus on good governance and strong cultures as sources of sustainable value creation.” This is also clearly the case in attracting and keeping customers.
In addition, there is evidence that registered BCorporations (exemplars of ethical business) build trust with their consumers, communities, and suppliers, (as well as finding it easier to hire and retain employees, or to attract motivated investors).
The two entrepreneurial cousins who founded furniture manufacturer La-Z-Boy nearly a hundred years ago, started the business with passion and purpose. Now one of America’s largest residential furniture makers, the company still exudes passion and purpose as a, as well as producing annual revenues of more than $2 billion. Their core values are ethics, honesty and integrity. Follow the link and I think you will be convinced.
Are Sales And Revenue Reason to Start?
The motivations to startup a new venture vary widely, but without consistent and continuing sales, there is is no business. Sales strategists will give a lot of attention to value propositions, target markets and customer segmentation. They will consider promotion and distribution channels. They’ll work on product positioning and competitive analysis, They’ll think about the sales funnel and revenue growth. A lot of attention will be given to sales staff recruitment and training.
The sales strategy will probably involve the design of a CRM (the means of managing a company’s interactions with current and potential customers). However, I suspect that it will have more to do with sales transactions than relationships—doing; rather than being. Significant differences exist between customer relationships, customer relations, service, or support—and they are often used interchangeably.
Customers Are People Too!
Relationships involve how or why people are connected. Customer relationships are not simply about transacting the sale and purchase of products. Business founders know this well, since at the outset it’s probably they who sell directly to customers, or at least the supply chain will be short.
At the start, founders play multiple roles and know all their colleagues directly. As the business grows, organizational structure inevitably results in responsibilities and roles becoming dis-aggregated and communication becoming more diffuse. Organization charts get built. Communication becomes a management function not just an activity in which we all indulge—inside and outside the business.
As the startup scales, it is likely that the sales and marketing function will be delegated the responsibility for communication outside the company. It will provide the strategic leadership on the subject, but in practice will not determine the company’s way of being. From the very beginning, that’s why the startup’s way of being in relationship has to a conscious strategy.
Customer Relationships Not Confined To The Sale
Almost every function of a business impacts relationship with the customer. This is the most significant reason why an entrepreneur cannot leave the subject to just one department. It is inevitably a strategic issue.
Relationships happen and develop within a context. The character, atmosphere, morality and policies of the business will help shape how relationships develop inside and outside the business. Such operational conditions can just evolve—or be strategically set by the company and impact the way business is done. If financial issues, like costs, revenues, margins are dominant priorities, relationships will tend to develop consequentially, rather than intentionally.
Why Relationships with Customers Break Down
Relationships with customers break down because they are unintentionally neglected. Examples include:
- automated telephone answering: how frequently have you heard “due to the unusually high call volume…” followed by instructions on which number to press for your need? Every time you call! You quietly say to yourself, “b……t”;
- when a company agent says, “that’s above my pay grade”, or “sorry, but that’s company policy”;
- you receive an automated unsigned reply to a query;
- a company sends an overdue payment document with no conciliation;
- customer calls are not returned;
- satisfaction surveys are outsourced or questions seem irrelevant;
- product failure is blamed on customer misuse.
Each of these simple examples demonstrate the company’s focus on transaction, rather than relationship. Chances are high that in such a company, the employees are not respected either. It’s hardly surprising then, that they treat customers the way that they experience their employer.
Business Relationship Involves Respect And Responsibility
Respect and responsibility are easy to say but difficult to show. Building a positive relationship strategy from the startup has benefit inside and outside the business. If respect and responsibility are normal within the company, it is highly likely that they will flow between the company and its customers—and every other stakeholder.
One example I know about is a company that was originally established by two young Dutchmen who met at university in 2006. What began as a study project used by family and friends has now grown into a premium platform that allows small business owners to build a website easily. The business grew to about thirty people and launched internationally in 2020, as Webador. There was a point at which I thought to simplify the Venture Founders website into a blog.
I found Webador and started on my project, but not being a techie, I needed a lot of help, so I contacted their customer support. I was a bit phased when I discovered the company was based in Europe and they only offered email support. But wow, from my first contact a few things were striking.
Not only was the response from Ruby the same day, it was charmingly encouraging and I thought she ran the company. In several weeks of contact with Webador the pattern continued until I decided to stick with my existing format. I was not even a customer, but I was treated as if I was—a valuable one at that. That attitude was maintained even when I did not proceed. If you visit the Webador ‘about’ page, I think you will understand why my personal experience is almost certainly the norm.
Translating Relationship Strategy Into Practice Is Hard
At the other end of the scale to startup, just briefly remind yourself about the Boeing company and the issues of the 737 MAX airplane disasters. A good way to start would be to read Why Boeing’s Problems with the 737 MAX Began More Than 25 Years Ago. It is an op-ed published in Working Knowledge: Business Research for Business Leaders, by Harvard Business School. An alternative, but concordant opinion is expressed in Boeing’s Last Chance: Meaningful Purpose, Powerful Culture, Enlightened Leadership, an article published in Forbes.
Either of these pieces might almost be essential reading for business founders, before lifting a pen to write a business plan. However, declaring a mission of respect and responsibility will mean nothing as the business grows if the founders do not take steps to ensure that a relationship culture is not only embedded, but also revitalized and lived in daily operations.
Definitions of business strategy are usually described as plans to achieve an organization’s goals and objectives, rather than how it means to achieve them—or its purpose for being, in the first place.
The Three Rs of Respect, Responsibility and Relationship are as basic to a startup as the Three Rs of Reading, Writing and Arithmetic are to elementary education. How often have you heard startup strategy described in terms of capturing value, rather than sharing value—and asked yourself what the word ‘capture’, implies? Traps, lassos, fences, maybe?
Venture Founders has a wide range of notions and information about entrepreneurship and the Three Rs, presented in different ways. Here are just three of them:
