Written By: Karoline Gore
Why is Ethics a Key Aspect of Leadership?
American consumers are increasingly valuing sustainability and other key ethical concerns, with a 2018 Nielsen report on Global Corporate Sustainability showing that 81% of consumers feel that companies should take steps to preserve the planet. Successful leaders are able to read the current zeitgeist and respond accordingly. Since they are the key decision makers and policy implementers, leaders must decide the extent to which their company knows and implements its core values. Being an ethical leader clearly involves a wide range of choices covering everything from human resources to choice of suppliers. If you are keen to establish your business as a standard-bearer, start by defining and respecting your company’s values, and by letting customers know where you stand. Read on to discover why this is arguably one of the best investments you could make.
Ethics Matter to Millennials
According to data obtained by Accenture, millennials spend around $600 billion a year and are predicted to up this amount to $1.4 trillion by 2020. This generation (the fastest growing in the U.S. workforce) has spoken loud and clear about the type of companies they are interested in backing: sustainable, ethical ones. A Deloitte survey has found that fewer millennials believe that businesses act ethically or show a commitment to improving society. The report also found that this generation millennials value businesses that make a positive impact on society and the environment, improve people’s lives, and make inclusion and diversity a priority. Good leaders make sustainability and other ethical factors a priority, not only in terms of how business is conducted, but also at the hiring stage. Diverse, meaningful-driven teams are leading these companies into a level of success that would be impossible to achieve otherwise. These values should be present in everything from policy to how meetings are conducted and feedback is received.
Ethical Businesses are Reaping Big Benefits
All businesses types – from small businesses to luxury ones – can benefit from conducting businesses more ethically and letting customers know about it. Take the luxury jewelry sector. While for clarity and cut matter for diamonds and other pricey gems, sourcing too has become a major priority for top marques. Thus, companies like Cartier and Tiffany are going a long way towards stressing the fact that they use conflict-free, ethically mined stones that do not harm local environments or communities. They are doing so for a reason: as found in a recent report by non-profit, CDP, companies that build sustainability into their core strategies are significantly outperforming those that fail to show this type of leadership.
Establishing Trust with Third Parties
From investors to collaborators, suppliers to potential partners, being ethically driven establishes you as a leader worth forming a team with. Intelligent investors will ensure that your company attracts the lion’s share of the market, while B2B purchasers will most probably inquire into your company’s values at the negotiation stage. To establish yourself as a capable leader, you need to articulate your company’s sustainability and values, but also be aware of major challenges posed by your industry to the environment and to communities living in the areas you are operating.
Presenting your company as one that cares for the world is key if you are to stand the test of time. With meaning-centered millennials currently the fastest growing consumer generation, catering to their passion for ethically driven business is key. As a leader, it is vital to set your goals, put them into action, and let customers and your industry as a whole, know what you are doing to make a difference.
Sources:
https://www.adweek.com/brand-marketing/why-targeting-millennial-consumers-might-not-be-such-a-hot-idea-after-all/ - Adweek (Robert Clara, June 11th, 2019)
https://www.cobrt.com/op-eds/proud-to-be-part-of-a-business-that-leads-in-sustainability-practices/4/19/2019 - Cobrt (Stefano Casadei, April 19th, 2019)
https://www.accenture.com/us-en/insight-outlook-who-are-millennial-shoppers-what-do-they-really-want-retail - Accenture (sourced August 2019, Accenture)
https://sfmagazine.com/post-entry/august-2018-millennials-view-of-business-ethics-sinks-sharply/ - SF Strategic Finance (Curtis C. Verschoor, August 1, 2018)
https://learningjewelry.com/guides/buying-diamonds/diamond-cut/ - Learning Jewelry (sourced August 2019, Learning Jewelry)
https://www.forbes.com/companies/cartier/#42b097b72493 - Forbes (Kurt Badenhausen, May 22nd, 2019)