No explanation needed on what the early stages of starting up are like! The market is a harsh critic on choices made by start-ups so what’s all the buzz about “sewing ethics into the fabric of your start-up from the get-go”. Are morals really such a big deal right from the get-go? Apparently, yes and a recent article by Vivek Wadhwa proves why. He talks about ethical lapses, that nowadays form the backbone of third world economies, but are likely to be as common in the United States and its big corporations. We shouldn’t forget they sped the last economic downturn, and we’re still paying the price… Some facts to endorse the recent financial meltdown: -the average CEO tenure in the U.S Wall Street firms is 4.2 years. -many companies dropped down the Forbes ranking in the last few years. -plenty of Silicon Valley start ups failed as a consequence of the financial crisis. Ethics in business is vital for the future. We don’t have to question whether their focus was on short term profits or moral authority. Since most of us are more likely to be ethical when reminded of morality (especially when temptation strikes) here is a summary of the 5 essential tips for implementing ethics in ‘start-ups right from the beginning’ by Jeff Sonnenfeld (head of the CEO Institute of Yale School of Management).
- Create an open culture: Internal constructive critics are more important than employees who only kiss the founders ego. Ethical bearings are most likely to be lost by founders who have lost their touch of reality.
- Lead by Example: characteristics of leaders are important and if ethical values are shown by CEO’s everyone else will follow in his/her footsteps.
- Learn from immediate peers: Take a look at what other leaders have done and take notice!
- Recognize your own fallibility as a leader: It’s vital to know limits and beware of the myth of immortality.
- Remember that institutional character: If you create an impression of personal grandiosity, deception and greed. Quite frankly that impression will stay with you forever and is very hard to erase.