Until embarrassingly late in life, it never occurred to me how much my upbringing affected how I ran my marketing communications business. I was a Presbyterian minister’s fifth and last kid, but because I went into marketing, I didn’t see a lot of obvious connections between his world view and the gritty world of business decisions. He was preoccupied with the great moral questions of Christianity; I spent my time poring over organizational charts and income statements. Aside from the fact that my dad showed great interest in my business and frequently asked about the tricky decisions I faced, I always saw our two worlds as tidily separate from each other, like parallel universes. Over time, as I encountered the gut-wrenching dilemmas every leader eventually faces—when to downsize, when to fire a popular employee, how much to tell staff about scary business developments, how much to share with clients about margin and cost structure—I came to realize what my father already knew: Business is really one big morality play. There’s no obvious allegorical narrative, but the lessons are all there, coded into our daily interactions with staff, clients, and suppliers; and the decisions we make are just as consequential to our moral and ethical health. We just may not always be attentive to that fact.
The more I became aware of this reality, the more I paid attention to the role ethics plays in building a business and, unexpectedly, in building value. Here I refer to value as something more than financial. I’m speaking of social and cultural value—the kind that enriches not just shareholders but the world around us, and not just with financial rewards but by making our communities (however you define them) better, happier, more vibrant places. Can growing a business be about more than making money and providing jobs, I wondered? Could it also be a way to build value by operating ethically—by doing good? As early as the mid-1990s, and without having read Pierre Bourdieu, Adam Smith, or Peter Drucker, I started playing around with the idea of capital, trotting out to my staff at Redspring Communications the idea of ethical capital. Here was a notion that an organization could build an enduring but different kind of capital, one generated by committing to operate ethically in every aspect of business. What’s more, by institutionalizing ethical behavior—by means of everything from a strong core ideology (core values, purpose, etc.) down to checks and balances in management decisions and employee behavior—the organization future-proofs itself from the corrosive effects of short-term and short-sighted decisions.
A key component of this kind of “institutionalized integrity” is an overarching organizational purpose, from which arises, theoretically, a sense of shared meaning. As a young business owner, I became preoccupied with articulating this purpose to my team in a way that would motivate them to conduct themselves ethically at all levels of our business. These days, as millennials demand a sense of purpose from brands and employers, this idea that an organization should stand for more than generating profit has become almost cliché. I see this as valuable progress in the business world. However, introducing a top-down purpose for a business (and a brand) is notably different from institutionalizing, incentivizing, and enforcing ethical behavior at every level of the organization. I learned this distinction in the trenches, as I’m sure many chief executives do.
Here’s what I learned. If you have taken the time to develop a solid core ideology with a well articulated purpose and set of values, you’ve taken a good first step. To activate that purpose, however, you must hire great people whose own values align with your purpose—and then set them free in an organization that supports their ethical inclinations. That’s the hard part. Around Redspring, we often described prospective employees whose values lined up with our own as having been “brought up right.” In using this phrase, we acknowledged that we weren’t there to teach staff right or wrong or to monitor their every action. We needed to hire people who already believed what we believed. In this sense, each new hire was another brick of ethical capital in our organizational foundation. Each one of those people, through his or her individual behavior and as part of a whole, made decisions that created long-term value.
That’s not to say we didn’t add some less-than-perfect bricks along the way. That’s the nature of hiring. Likewise, we had plenty of instances when good people did stupid things, myself included. And that’s where organizational structure, job descriptions, and human resource management come into play. But most of the time, Redspring’s organizational behavior was largely guided by the collective conscience of its people—by people who were brought up right.
It’s been over a decade since I sold Redspring and I have come to value the company’s ethical capital in the legacy it left behind. The people who worked there went on to lead companies, manage teams, and make individual contributions at businesses all over the United States. When I reconnect with these folks, as I did recently over beers with four of my favorite managers, I heard them echo in their own leadership styles the values we embraced at Redspring. These people bring their own highly developed sense of ethics and discipline to their respective organizations and, in doing so, enrich them incalculably. That kind of value—the ethical capital they contribute—is far more enduring and meaningful than any budgets they manage or deals they close.