Tag Archives: Management

Ethical Leadership – A Must For Customer Loyalty

Businesses still do not understand that customer loyalty begins with executive leadership who demonstrates consistent ethics and values found within the organization’s strategic business action plan. When the executive leadership behaves badly, these actions are shared inside and outside of the organization.

For example, Indiana is an at will employer. Businesses can terminate employees without any notification. Yet most of these same firms expect 2 weeks notice when employees leave. Now does this attitude or belief demonstrate high ethics and values; or is there a thread of hypocrisy running through these organizations?

With the tightening of the global market place (and yes it is global even if you believe all your business is local), many organizations are cutting back on employees from downsizing to outright terminations. Usually what this means for mid-size to larger organizations is the slashing of the Education and Training Departments’ budgets as well as personnel.

Why is this area usually is the first to go is because of these two continued beliefs within the American business culture:

  • Education is not really valued.
  • The inherent value of human capital is not really understood by many American companies
  • In business, there exists what I have labeled the Osmosis Learning Belief. Stand next to someone and you instantly become a great leader or a super star goal achiever. Employees need to be developed where they demonstrate ethical leadership. They require assistance in developing their talents and further strengthening them so that the organization becomes even more competitive.

    American companies and organizations with the exception of a few such as Southwest Airlines do not value human capital. Many employees especially below the executive level are viewed as “throw aways” for the belief is that the firm can always find someone cheaper and better. For some enlightened companies such as Toyota, they have realized the tremendous cost of downsizing their employees because of the investment that has already been made.

    Each terminated employee represents at bare minimum 1.5 years annual tangible salary and benefits loss to the bottom line ranging from $30,000 to $200,000 plus. The intangible losses greatly increase that red ink and include:

    • Relationships those employees have established with external customers and other internal employees
    • Understanding of the ins and outs of the business
    • Additional growth in intellectual property (learning, training and development) by those same employees
    • Established loyalty and productivity

    TAKE ACTION ETHICAL COACHING TIP: Evaluate your organization from an executive leadership perspective. Are you leading forward, proactively during these difficult times or are you leading backward, reactively? Customer loyalty is the result of ethical leadership beliefs and actions. So before you terminate that next employee, take the 30,000 foot view and determine the real losses to your business.

    Want to develop ethical leadership? Take this free leadership skills assessment.

    P.S. Do you know what your talents are? Learn more about your ethical leadership talents to help you maximize education based marketing.

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    Business Ethics and Values Do Not Have Expiration Dates

    Walk through the aisles of any grocery story or even convenience store, pick up any product and you will see an expiration date. These dates are for your consumer safety as well as to receive the most benefit from the nutrients within the food product.

    Yet, recently, I have come to observe that many individuals in business who profess to be true professionals as well as those in government are demonstrating business ethics or values with expiration dates. Initially statements specific to their behaviors are made without a date. Then realizing that change is more difficult than originally expected or will take additional effort a date is added. If the added date is not made, a new date pops up.

    The work ethics associated with these behaviors become a moving object. As new dates are added, the impact of the quality decreases to those who are on the receiving end of these expiration dated values.

    For example, how many times have we heard that during the tenure of this leadership or management team it will be the most ethical in the organization’s history? Then as time moves forward, we hear, not from leadership, but outside sources about unethical behaviors. Then leadership makes excuses and sets a new expiration date.

    Why business ethics or values now have expiration dates may be connected to the relativism that has affected the U.S. during the last several decades. Relativism has many definitions, but essentially means that everything is truth and is relative to the individual. In other words, values become moving targets or simply are now produced with expiration dates.

    The recent meltdown of Wall street, the bailout of Wall Street, the ponzi schemes, the individuals who knowingly violate the law and believe that they are above it are all examples of values with expiration dates. Even before these incredible examples, many of us heard this expression, “Do as I say, not as I do.” This is a values statement with an expiration date.

    So how do business leaders and true professionals avoid values with expiration dates? First, make sure that you have a values statement that has been clearly articulated within your organization. Everyone from the bottom up to the top down understands the specific acceptable behaviors and equally unacceptable behaviors.

    Next, enforce the values statement. Recent surveys of college graduates and high school students show an increase in cheating and that cheating is acceptable. These surveys also reveal that these cheating young people believe that they have high ethics.

    The old expression everyone does it is another justification of having a values statement with expiration dates. In other words it’s okay to cheat to get the best grade in school and when I leave school, I will no longer cheat. If you believe that, I have a bridge I would like to sell you.

    Having a values statement may cost you some business in the short term. However, in the long term you will gain far more than any potential short term loses.

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