I've just been watching the BBC programme, Dragons' Den on catch-up TV. During the show, an artisan is pitching for investment in his company, which sells high-price hanging garden seats. Towards the end of his (unsuccessful) pitch, one of the 'dragons', Hilary Devey, tells the artist that he could be sourcing manufacture of his product in Morocco, for a tenth of the price he pays in the UK. The artist replies, 'But we do have to keep some work here in the UK. It's not just about outsourcing everything, surely?' Hilary Devey replies, 'Business is about making money and about profitability. It's about the bottom line.'
She's right, of course. But herein lies a conundrum. How do we balance that all-important profitability with our own personal and business values? We all look upon China, for instance, and ponder their meteoric rise. We know that that rise is as a direct result of businesses in the Western world buying from China because the manufacturing there is so cheap. Part of the reason that their manufacturing is so cheap is because their workers are not paid as well as our workers. The end result is that China has grown massively richer because many business owners across the world have decided to focus on profit above all else. They are willing to overlook the conditions faced by Chinese workers to drive down their own costs.
A test of my own values
A few years ago, I had to make a similar decision. We were in the middle of production of a previous edition of our Essential Business Guide, the third edition. Our then partners suggested that we should print the book abroad so as to drive down production costs. I said I wasn't prepared to do that. When questioned about my wisdom as a business owner in refusing to go for cheaper manufacturing, I replied, "You won't be affected by this decision. I'm willing to take a lower profit in return for supporting the print industry which has given me a career. The British print industry is under enormous pressure and I'm not willing to add to that pressure." Whilst that may sound a bit 'holier than thou' it's something I feel really strongly about. Many of my printer friends are struggling to find business in an industry where costs are rising and revenue plummeting... and I just didn't want to add to that.
What would you have said? Do you think I'm a naive idiot, or do you understand my decision? Of course, it doesn't really matter either way, because for each of us the answer to questions such as these will be different.
In business, we must take the time to consider where we will draw the line. In other words, exactly what are our business ethics... our values? These questions are inherent in a social enterprise, but they are also important in for-profit enterprises, too. If we are to sleep at night. If we are to feel proud of what we've built.
What do you stand for?
In our Start Your Business Step by Step workbook, we urge people who are starting out in business to ask themselves three questions:
- What will I always do?
- What will I sometimes do?
- What will I never do?
They are not easy questions to answer. The pressure to make maximum profit is enormous, particularly if you have an investor on board. But if you're in business, you have to decide where you will draw your own particular line. And it's a good idea to ask those questions in advance, before you are tempted to cross that line. It's wise, in my mind, to decide in advance exactly what your business values and ethics are. Then, when your 'this far and no further' position is tested, you'll know exactly where to draw the line.
So this week, I'm asking you: When do you say 'No'?
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Please take a moment to comment. I'm really interested to hear what you think about this thorny question of business ethics... I don't know if I'm right or wrong. I just know it's important to me.
