Why ethical behaviour is essential for every company
BY MARC HUSTEN
(Published in The Produktkulturmagazin issue 2 2018)
Now both aged 60, Ian and I go back to days where we were teenagers of circumstance in Perth, Western Australia. Over 45 years of hard and sincere work Ian is now first-class through working his way up to become an entrepreneur of standing, spanning from the outback tracks where Ian masters the dust in cross-country rallies, while standing his own on the stock markets of London, New York and Hong Kong; while I hung in theory and strategic splendor. Ethics aren’t at the forefront of this interview by chance, as Ian thinks, lives and humbly shares his deep belief in, concern for, and sharing of ethical values, recognising ethical habits to have set his foundation for long-term success.
Ian, ethics are the foundation of a good company. In your opinion, why did it take so long for societies as well as companies to be conscious of this underestimated factor?
It’s my opinion that companies are more inclined to pretend to care about ethics, enough to maintain a positive image and keep critics at bay! Societies demand ethical behaviour from politicians, police, etc., but I think they have become inured to unethical behaviour. The developed world had a big uplift in wealth from the late 1970s, coinciding with huge advances in technology, a broad shift from manufacturing to services-based economies and the ready availability of credit. It became easier to create wealth by feeding the new economy and its new affluent middle classes – software, media, tech, property development, luxury goods, etc. Fast money meant that the need for “old fashioned” concepts of honesty, trust and hard work faded - being materially successful was the only objective. However, we got wealthier but not happier, and I believe that we’re now living through a period where people are less optimistic about the future - some are searching for the quality of their lives, rather than the quantity.
The drive to get ethics is now a huge push. How can companies ensure that their entrepreneurial implementations are successful and do not come to nothing?
You can’t, every new venture or implementation is a risk and humans are at their core driven by self-interest. The key thing is how you accept responsibility and learn from failure. Companies need leaders who set an example, who operate with honesty and sincerity, who treat their staff, suppliers and customers with respect. If people truly adopt an ethical approach, we get over failure and gain positive learnings to channel into the next successful project.
Everyone is striving for an ethical culture because it attracts and keeps qualified employees. What kind of influence has this new competition of good workforces had on the entrepreneurial view of business and resources?
The competition for skilled people has never been greater, and the challenge for every new venture is competing with the security and often higher pay scales of larger companies. However, small companies have an advantage – they don’t have multiple layers of process and bureaucracy between the CEO and the customer-facing staff. An ethical, high energy CEO will be quickly recognised and is more likely to gain respect and loyalty from high-value staff, which translates to low attrition.
You have founded multiple successful companies. What are the ethical bedrocks of each and every one of your companies?
Quite simply, treat other people as you would expect to be treated yourself. Put their interests equal with your own and mean it.
Ethical behaviour reflects smart business practices. What are the current trends?
I would never claim to be across current trends, but I’m not sure that I’m seeing much change beyond more virtue signalling. Entrepreneurs all want to be rock stars and Venture Capitalists all want their “home runs”, employees and shareholders are lambs caught between carnivores.
The world as we know it is shaped by digitalisation. How does the digital cosmos influence ethical behaviour in an entrepreneurial context?
The good news is that it’s harder to hide bad behaviour behind a wall of PR spin. Sites like Glassdoor.com cut through carefully confected images. It’s also easier for propective employees or clients to find evidence of poor ethics. Of course, the downside of our digital lives is that it’s too easy for people to make unjustified attacks. The lesson is to behave well and avoid making enemies!
Culture is a balancing act between different elements of a company which require careful execution on each corporate level. How can this equilibrium be achieved?
Again, treat other people as you would expect to be treated yourself. Entrepreneurs need to show strong leadership within a framework of strong ethics. Communicate your vision, be open and honest at all times, in success or failure. Reward the people who contribute and remove those who don’t, all the while explaining why and setting a positive example of the behaviour you expect.
Ethical shortcuts can come back to bite you in the backside. Still, some entrepreneurs believe that ethics and profits have to be mutually exclusive. Which factors influence this kind of thinking?
Inexperience is the primary factor. When most people begin their entrepreneurial journey, the future seems far away and “breaking eggs to make an omelette” seems like a smart shortcut. Weak managers demand absolute compliance from staff but don’t deliver in the other direction. It usually takes multiple failures over a number of years to learn the consequences.
Some people of course can have brilliant minds but awful behaviour. People put up with them in order to share the rewards of innovation and creativity. But less than 1 per cent of entrepreneurs have the talent of Steve Jobs, the rest of us succeed by surrounding ourselves with great teams, which we must value and respect.
Corporate culture is valued differently around the world due to the diversity of societal values. With your work experience of more than 40 years, you have experienced this at one stage or another around the world. How can an international company ensure that one ethical culture is implemented and followed at all sites worldwide?
My experience is that people are broadly the same wherever you go and my “do unto others” mantra applies. Cultural factors of course vary, and sometimes quite significantly. I hated the way my male managers in certain countries treated female staff and I struggled to change this. I once sent my best project manager, a Filipino female, to run a major project in India. She was treated with derision until they saw how good she was and how well the successful project reflected on them. It seemed like a victory, but I saw no lasting change in the managers. For me, the important thing was not to give up. Another approach is to impose the head office culture everywhere, and I think American companies often do this better than most, but it’s hard for early stage companies to find the resources and time. My advice: hire ethical people and demonstrate ethical behaviour in all circumstances – it’s all you can do.
Business has become fast-paced in the digital age. Which challenges does the entrepreneurial spirit face?
In many ways these are great times for entrepreneurs, if you have a worthy idea, you will find funding and can begin the journey. Equally however, ideas now travel at light speed and the half life of technology is shrinking. By the time you get to market other people will have copied you, then soon after, something newer and better will arrive! The biggest challenge is renewal, you have to reinvent your company every five years or face certain defeat.
You once said that great entrepreneurs are no different to great people. What defines a great individual suitable for the role of an entrepreneur?
Anyone can be an entrepreneur, it’s only a matter of “having a go”. What helps you to become a successful entrepreneur is a set of somewhat contradictory attributes. You need powerful self-belief, yet humility; you need to be driven and impatient with failure, yet have empathy for the people who’ll turn your ideas into products; you need an appetite for risk but a plan for survival; and finally, everything you do has to involve honesty and integrity, not only with others but also with yourself.
Ian Buddery is an Australian entrepreneur. He has founded multiple companies in telecommunications and financial services; obtained Venture Capital and institutional funding, performed two IPOs, six acquisitions and two trade sales. A software engineer with sales and marketing roles in leading technology vendors, he founded eServGlobal in 1991, exiting in 2010. Today his projects are Maestrano, CriticalArc and Interferex.
Marc Husten spent 13 years at IBM as a Systems Engineer, Sales Manager and most recently as a Managing Principal at IBM Consulting. After many stops abroad, he joined Andersen Consulting as a partner. After five years at Accenture, he worked as a freelance consultant and interim manager at Mercedes, Beiersdorf, Swisscom, OTTO and Condé Nast. He was responsible for C-Level Consulting Engagement for Oracle Germany and for Consulting & Professional Services at Siemens Information Services. Since 2015 he has worked as a freelance consultant and partner at Busold Consulting.
Picture credit © Ian Buddery