Is “Integrity” the New Measure of Success for a Company?
Recently, I was sucked into a YouTube video vortex and ended up watching three videos about unethical company practices.
You all know how this works: you watch one video, and another is shown with the same content message but with a little more drama. Pretty soon YouTube has you on a radicalization journey as the content intensifies to keep you watching.
In my case, the journey was about companies that exploit humans to make billions of dollars.
(I probably started with a video about baking cookies for diabetic teens or the science behind diabetes. I can’t exactly remember. But, usually, that’s how it starts.)
The first “unethical practices” video was about big Pharma and the prescription crisis in the US. The video explores the deaths of young diabetics in the United States who are dying in their early 20s after they “age out” of Medicaid (21-years old) and are no longer able to afford the cost of insulin and related diabetics supplies. These and other medications for treatable diseases (e.g. hepatitis C) frequently cost uninsured Americans thousands of dollars annually.
The only option for many is to purchase drugs on the black market or medical tourism. For many, this is a life or death situation.
The next video was about global human hair trafficking. Human hair is sold for wigs and hair extensions with the most desirable hair being long, un-dyed (virgin), and unaltered. Selling hair is a multi-billion-dollar industry.
In many developing countries, traffickers will approach rural women and ask to purchase their hair for $1 or $2, which is far less than it is worth. The length of hair is often associated with beauty, and to sell hair means a woman is in a dire situation.
The third example comes from the make-up industry, where a primary ingredient in make-up, mica, is sourced from the states of Jharkhand and Bihar in India where children as young as 3-years old work in ghost mines for as little as pennies a day. This mica child labour practice is illegal, unregulated, unsafe, and systematically hidden in the supply chain.
Deaths are common amongst children because of cave-ins (roughly a dozen per month); the exact number of fatalities is unknown because mine operators will silently cremate children without reporting their death.
After watching these videos (and questioning my life choices), I began to think about the number of unethical practices that exist in other industries and what can be done to change the status quo.
And then I wondered, is “Integrity” the New Measure of Success for a Company?
Integrity as a Measure for Success
Off the top of my head, I can think of many companies that have been caught by unethical practices in the past few years.
There’s Boeing and the 737 Max. VW with the emissions scandal. Facebook and Cambridge Analytica. Amazon, Walmart, Nike, Coca Cola, Nestle, Purina…
Recently in Canada, Bombardier (the darling of Québec) has been forced to sell two major divisions of the company because the government will no longer support their toxic work culture and dishonest business practices.
This speaks to a change that is happening in the corporate world. In looking at the success of a company, it used to be profits. Companies needed to make insane amounts of money for their shareholders to be deemed successful.
A company still needs to make money, but there are now three things that are thrown into the mix to complete the success picture:
- employee happiness
- customer engagement
- ethical behaviour
All three of these things are part of one whole that makes up an ethical modern company.
Employee Happiness
I’ve written about the humans in technology extensively and feel like this is the Achilles heel for business. Everyone talks about happiness, people-first culture, and employee “fun” benefits. But in reality, plenty of companies can talk-the-talk, but very few can walk-the-talk.
The biggest questions out there are: How do you retain great talent? What you have to do inside a company to keep people around and keep them happy? What incentives does a company offer to employees for their moral, impactful decisions?
Building a fantastic company with a marketable product is completely dependent on the skill, maturity, and unique “special sauce” of its people.
And, to find and retain these fantastic people is hard, especially in tech where unscrupulous or command-and-control business practices are no longer accepted as the norm because employees are no longer willing to “shut-up and put-up.” A company with a bad reputation often has difficulty finding experienced people.
In many cases, recruiters market company ethics (often called ethics washing) to attract potential talent. But, that’s not enough because potential employees are now able to see past the “coolness” of a foosball table and get to the heart of what’s truly meaningful.
Recruiting is no longer about posting a job, receiving resumes, sifting through these resumes, and hiring people who come in and turn the wheel. From that first interaction, a trust-partnership builds between the potential employee and the employer and the expectation is that a company can practise what it preaches.
To complete this trust-relationship, companies now need to be able to walk-the-talk!
Customer Engagement
Outside the company, consumers are no longer willing to see business as a magic black box that spits out a product at the end. They realize that corporations can have a positive or negative impact on the environment, local communities, and individual workers.
In addition, people have come to realize that unethical corporate behaviours have a far-reaching and lasting impact that affects generations. Sites like the Ethical Consumer and GoodOnYou rate companies and their ethical practices and supply chain. GoodOnYou even has an app that will give you information and a rating on various clothing brands.
The true magic black box contains a combination of happy employees, effective leadership, customer engagement and products that solve real consumer problems.
In return, these consumers want to be engaged. They want to be a part of the product lifecycle. They want to know what’s happening in the supply chain. They want to form alliances and build relationships with companies and brands that they trust.
In return, to maintain brand loyalty, companies need to take a hard look at their supply chain and evaluate their behaviour as a corporate citizen. What is their carbon footprint? What is their view on child labour? What impact do they have on the local (or global) economy? Are they channelling revenue towards noble causes?
Consumers want to know if a company can truly walk-the-talk.
Ethical Behaviour
I’ve interwoven ethical behaviour into the two items above because there’s no way to separate the three because there is a cumulative, knock-on effect.
This statement is especially true for start-ups. If these rapidly evolving companies want to attract the best talent (necessary to help the business get off the ground), they have to have something more to offer than merely money, stock options, and an idea that could potentially die.
Potential employees aspire to make a difference and will partner with a company or organization that shares the same desire.
What Happened in the Industries from the videos?
I do want to focus on the ethical solutions found by companies for each of the videos mentioned above. In each of these industries, I did find examples of great companies doing great things to counteract unethical behaviours.
Human Hair Trafficking
Dan Choi, an American man, living in Vietnam, started a business called Remy NY, which ethically sources hair.
Instead of paying women $1 to $2 for their virgin, never been cut hair, he will pay hundreds of dollars for this same hair, the fair value of what it is worth. And, $100 for women in Vietnam is enough to support a family for a year, pay for better education, and keep women out of the sex trade.
Choi’s business is still small (less than 20-people), and the company doesn’t make a profit because money is distributed evenly throughout the supply chain. However, the video on YouTube has generated a lot of interest from celebrities and individual buyers.
Mica in Beauty Products
The mica trade has families locked in a vicious cycle. Children and their families are trapped in poverty that without the mining, they would not survive.
Organizations like the Responsible Mica Initiative are working to break this cycle and have rescued almost 3,400 children from the mines. This initiative presents different financial options for locals and children who want to be kids and go to school.
In the UK, companies like Lush refuse to use mica and instead use a synthetic sparkle in their products; they actively work to reduce their environmental impact and avoid animal cruelty.
Lush certainly knows its target market and its refusal to use exploitive practices is an important selling feature for their followers. They also actively engage in consumer engagement initiatives to bring them closer to their customers. In 2018, Lush saw £928m in revenue, which they actively donate back into their community.
Big Pharma
This problem is tricky and highly political. Pharmaceutical affordability is one of the hottest topics of the 2020 election in the United States, and I’m not sure there is an easy business solution because of pharmaceutical regulation.
That said, many have found “hacks” that help.
Pharma affordability is fueling a black market for drugs sourced from other countries like Mexico, Canada, and Australia.
A vial of insulin in the US can cost $340-$380 and requires a prescription. The same vial in Canada is $30-$40 and is sold over-the-counter. Medical tourism is growing because people have discovered that it’s easy to cross the border for cheaper medication.
This saves lives but requires a passport, mobility and time. It also does not help the most vulnerable who are unable to travel or take the needed time off work. Shipping medications to the United States is tricky and can damage the product.
Can you Measure Integrity?
Going back to the original theme of this post, I am left wondering, can you measure the integrity of a company?
Profits could be a measure if you have good numbers related to customer interest and see a rise/drop based on purchasing behaviour. But this only works if you have a product and know your customers.
What do you all think? Is it possible to measure the integrity of a company? And, if yes, how do you measure ethical behaviour?
