Is your value system the same in your business life as your social life? Below is a blog from the Harvard Business Review by Clif Reichard.
Everyone knows a business needs profits, customers, and ethics. What not everyone knows is which of those should come first, second, and third. A lot of companies fail because they get the sequence wrong.
The most common mistake is to put profits first. That opens the door for bad things to happen. Numbers become all-important, and almost any behavior is justified in the name of profit. Cheating sets in.
Instead, a company’s priority should be to protect and enhance its reputation through ethical behavior. Within the confines of that behavior, its next most important goal should be to attract and keep customers. Third is figuring out how to make money.
Ethics, customers, profit. Don’t forget that.
That sequence tops my list of four business verities as I get ready to retire at the age of 81 from Ball Corporation in a few weeks. None of the verities is earth-shaking, but they’re distilled from practices that have helped my company survive for 130 years while competitors bit the dust.
Verity number two is that when it comes to selling customers, all of us can create a credibility in here that no one of us can establish out there. Most companies go about attracting and keeping customers by beefing up the sales force and encouraging salespeople to make the company sound better than it really is. But that is BS. The way to ethically attract and keep customers is for the company to be incredibly good at what it does so that no one needs to put lipstick on the pig.
At Ball, our sales policy has been that we are a manufacturing-driven company — right into the arms of our customers. Our plants are in total tune with our customers. In our charter plants, plant managers have taken over all maintenance-selling duties, leaving salespeople to create new business full time. This manufacturing-driven sales policy has been unique in our industry and was one of the reasons why American, Continental, and National Can eventually had to go out of business.
Verity number three is that employees do best when they are led, not managed. When employees are asked for their advice, rather than being told what to do, they bring their best efforts, talents, and abilities to the table. True, employees sometimes need to have direction, but they don’t respond well to being over-managed. It has long been a tenet of Ball that the combined knowledge and experience of the team is superior to the singular knowledge and experience of the manager.
Verity number four is that to be fully engaged, people need to know where the company is going. Everyone needs to be aligned around a goal that makes sense. In Ball’s case, the ultimate goal set by the founding five brothers is to change people’s lives for the better. So what makes our world go round? The process starts with management taking such good care of us, the employees, that we feel so good about the company and ourselves that with the help of our suppliers, we take such good care of our customers that they want to buy all we can make, giving us full-capacity utilization, which gives our investors such an outstanding return on their investment that our shareholder value keeps going up. In this process, all our stakeholders get rich, allowing all of us to enrich the communities where we live and work, thereby helping change everyone’s life for the better.
Looking back over the years, it has been important to be able to employ the same value system in my business life that I chose to employ in my social life. Out of this has grown a love for all that this company represents and a pride in being able to help change so many peoples’ lives for the better.