The true measure of any person is his ethics, and this is equally true in business. As an entrepreneur, the standard you hold for yourself weaves its way into your company practices—the type of people you hire, the way you establish your policies, the way you deal with your customers, and certainly the reputation you develop over time. As such, business ethics are a very important part of establishing a firm foundation for your company, and communicating your ethics as a central part of your corporate culture is key.
How Often Do You Face Ethical Challenges?
We’ve all dealt with tough times and the longer you are in business, the more certain it is that you will be presented with opportunities that challenge your ethics. How you deal with those will impact your business in ways you can’t begin to measure. It’s easy to be ethical when times are good; what you really believe and stand for, however, becomes evident when times are NOT good.
How Do You Deal with Ethical Challenges?
One of my biggest ethical challenges came to me a few years ago at a time when, like so many business owners have experienced, my company was in a period of “famine.” We had gone through a slump and our resources were low. I was concerned about making payroll, frankly, and was feeling a little desperate. I was called out to quote a large web development project. At the time, the prospect and I had a quick and very comfortable relationship—clearly he trusted me. To my surprise, he revealed to me that he had a sizable budget (he named the amount) along with what several of my competitors had quoted him.
After spending an hour with him, it became obvious to me that (1) my competitors had greatly over-quoted the project, and (2) the project would not require even half of the budget allocated to it. It would have been very, very easy to quote a price in the range my competitors had given. I could have come in under their rates, and made a HUGE profit, which at the time we really needed. However, I was not willing to take advantage of the client and the trust he had put in me. I quoted the project as though I had no knowledge of his budget or the other quotes. My quote was 65% less than the others, but it was a solid, fair quote. You’ll never guess what happened…
It turns out that the prospect had experience in the industry. He knew he had been grossly over-quoted. He had shared his budget with all the vendors as a test, and I was the only one who did not inflate my numbers based on his budget. In the end, he hired me and we actually ended up getting ALL of his budget because, in addition to his web development project, he had branding projects, print projects, an extranet project, and several other related services he needed. Further, they signed us to a 3-year contract as their agency of record, and we ended up with three years’ worth of budget.
Of course, not every story ends that way and often, taking the high road actually costs. We’ve encountered several times where we lost money by doing the right thing. And that is okay by me. A most important thing I’ve learned in business and in life is that you spend a lifetime to build a reputation, but one misstep can ruin it. And once you have lost your reputation as an ethical person—or your company as an ethical business—you never get it back.