Making Room For Ethics

While some building service contractors might consider these “corporate corruption” stories a reminder that it never pays to get caught, others might do well to take the sudden spotlight on ethical behavior as a chance to evaluate their own standards for doing business. After all, industry giants aren’t the only ones who need to worry about good business — BSCs of all sizes can benefit from doing the right thing.

What is "the right thing"?
A common definition of ethics is knowing the difference between right and wrong, and making decisions and actions based on that. The Judeo-Christian “Golden Rule,” — treat others as you would want to be treated — further refines the concept of ethical conduct for many individuals. Throughout time, secular philosophers also have suggested their own approaches to making ethical decisions. These theories range from choosing the path that has the greatest potential benefit for the most people (and the least potential harm), to treating everyone involved in the decision with fairness, and avoiding favoritism and discrimination.

While seemingly simple, applying these philosophies to work life can become complicated for BSCs. Rather than the isolated, one-on-one situations, these decisions deal with the key responsibilities a company has to all of its stakeholders — that includes employees, customers, stockholders, suppliers and the community at large.

“For our little company, ethics translates into treating every customer as we would like to be treated ourselves. Promptness, courtesy, follow-through, empathy, honesty and standing behind our word are key metrics for us,” says John Weber, vice president of sales and franchising for FreshStart by PromptCare, a cleaning and remediation firm in Costa Mesa, Calif.

Weber and other BSCs have similar philosophies and actions. They treat their employees with respect, involving them in decisions that affect them. They follow the rules and they know when to bend them; they’ll stick to their written contract, but might make exceptions during an emergency. Contractors concerned with ethics also try to avoid cutting corners and making mistakes, but will notify the customer, rather than try to hide it, if something goes wrong.

“Doing the right thing” isn’t just a part-time ideal for such BSCs, nor is it just for the biggest decisions — ethics can weigh heavily even on the little things, such as deciding whether to use the more expensive, but safer chemicals, or whether to take a prospective customer to a quick lunch or an elaborate dinner.

Ethics-rich, cash poor?
It’s quite easy to debate the benefits and drawbacks of trying to operate in an ethical manner. While it sounds good, wizened industry veterans will point quickly to exceptions to the rule or situations when doing the right thing can be much harder to define.

Sometimes, doing the right thing can be the more expensive thing, especially in the short term. After all, it costs a lot less to pour waste water down a drain or over the street curb than to process it properly, and customers don’t always look at the top shelf to make sure you’ve dusted it.

Cutting corners can save labor, time and money. Not telling a customer about an over-billing might go unnoticed and draw less attention to someone’s error. But that’s not the point, says Deni Elliott, director of the Practical Ethics Center at the University of Montana in Missoula.

Making money is important, but BSCs don’t exist to make money — they exist to clean buildings. Therefore, contractors’ decisions should reflect that purpose, says Elliott.

“A lot of business decisions are a daily balance of money versus morals,” she says. “In most cases, you’ll find a decision in the middle — that’s how you stay in businesses.”

And contrary to popular thought, favoring money in order to stay in business can be the right thing, morally, suggests Jeffrey Seglin, a business ethics columnist for the New York Times and ethics fellow at the Poynter Institute for Media Studies in St. Petersburg, Fla.

“You have to think about the financial impact of any decision when you’re in business because if you don’t, you’re likely to wind up out of business,” he says. “If you make a decision that you know will force you out of business, then you have to deal with the jobs that are lost and the impact of the of the closure to the community. It’s all intertwined.”

In his book, The Good, The Bad and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart (Wiley, 2000), Seglin identifies three broad "spheres" that are affected by business decisions: Money, people (employees) and the common good (the community and environment).

He recommends picturing these spheres as three overlapping circles, and making a decision based on where all three circles connect, to emphasize that choosing one at the expense of the others can throw your business off-balance.

Added benefits of taking the high road
At times, the benefits of doing the right thing aren’t necessarily that obvious or immediate, but they are no less ideal. Contractors willing to forgo immediate gratification with a quick fix can profit in the long term.

For instance, running an ethical company can lead to new business over time, says Weber.

“When you have a reputation that you do not compromise laws or regulations, your informal network knows it. This breeds goodwill and future opportunities,” he says. “Actually, always following the rules, no matter how small or seemingly insignificant, has great benefit. You never need to worry about what you may have said or done in the past, since this type of ethical standard is an anchor.”

Consistently adhering to standards also saves time and productivity, since management shouldn’t have to second-guess decisions or procedures, saving money as well.

On a pragmatic level, running your company ethically also protects your financial and liability interests. It can save trips to the courtroom, even if one of your employees strays.

“If you have an employee who is caught doing something bad, such as violating criminal or civil law, the court will look at how involved your company has been in creating an ethical environment,” Elliott explains. If you have taken steps to instill ethics in your work force, the courts will be more likely to see the employee as an aberration and reduce or eliminate your company’s liability, according to federal sentencing guidelines.

Other benefits of an ethical culture may not directly impact the bottom line, but still are important for morale.

“An ethical culture empowers and engages people,” Elliott points out. An ethical company makes its goals explicit so there’s no wondering, and then rewards ethical behavior, not just production.

That means putting aside the “we don’t care how you get there; just get it done” attitude and rewarding restraint — that is, doing a good job without crossing a line.

Getting it in writing
To impart an ethical culture and attitude on employees, BSCs should consider constructing a written ethics code, either as part of the employee handbook or as a stand-alone document. These codes can be very useful, if they’re done properly and if they actually reflect the practices of the owners and desired employees, says Seglin.

ServiceMaster is one company that tries to practice what it preaches, and its written code of conduct and four core objectives figure prominently throughout the employment cycle. The Downers Grove, Ill.-based company distributes its code of conduct to all employees, with several phone numbers they can call for support. One of those numbers is the Corporate Compliance Helpline, which is a clearinghouse for legal and ethical questions.

“Typically, the calls are people-related — internal issues such as payroll or management difficulties, as well as quality issues,” says corporate compliance manager Randy Corley. “But we encourage people to use the hotline for ethical problems.”

For instance, if employees feel their department is cutting corners to save money, at the expense of the customer, Corley encourages them to call the hotline for guidance, without fear of retribution.

To create a written ethics code, Seglin suggests turning to trade associations, which often have industry-wide statements of their own. Contractors can use those as a jumping-off point, or for a format model.

Elliott, on the other hand, recommends involving workers in the creation of these codes.

“Trying to write a set of standards is a good exercise, but only if people at various levels are involved,” says Elliott. “An ethical code is not just a top-down document.”

Involving employees at all levels creates buy-in, and makes it more likely the entry-level workers will accept the standards as their own, rather than as something distant from management.

A written, defined company-policy manual, in addition to or instead of an ethics code, also can be useful for making decisions. For instance, during downsizing, deciding who to lay off and who to keep really isn’t an ethical dilemma if you have a pre-determined procedure, says Lori Tansey Martens, president of the International Business Ethics Institute in Washington. If, in writing, you’ve already communicated to employees that the last hired will be the first fired — and you stick to that policy, the decision is clear-cut, even if it is painful. On the other hand, if you’re weighing employees individually and on the fly, problems with favoritism or discrimination could occur.

Once you have a well written policy in place, distribute it to your employees. Consider offering the document in languages other than English if necessary. But the communication doesn’t stop there; ethics needs to be an ongoing attitude, not just a booklet in a file drawer.

Seglin suggests using training as an opportunity to impress these values upon your workers. During training periods, Seglin recommends discussing with workers the consequences of unethical behavior, such as demotion or termination, in specific situations — and include the effect on others, as well, so employees will understand the total impact of the decisions.

“For example, most companies have a policy that says the employer can monitor employee e-mail and Internet use,” he explains. “But rarely do they explain that e-mail can be subpoenaed in a lawsuit, so a company can be exposed by what may seem a benign e-mail, written in haste.”

Training also helps sort out ethical issues which may be unclear. On the corporate level, Teltara Inc., Scottsdale, Ariz., has a zero-tolerance policy for petty theft, and that policy is communicated through training and manuals, explains program manager Greg Bosserman. Surprisingly, petty theft means different things to different people. For example, just about every new employee understands right away that theft from a desk is not allowed, but not all realize trash also is off-limits. Training helps to clarify that.

Regardless of the written policy and training procedure, BSCs say the best way to communicate ethical values is by example. For instance, Jon Wells, vice president of Starlight Building Maintenance, Burlingame, Calif., insists managers and employees work to the highest ethical standards, even if occasionally the company gets the short end of the stick.

“On a more-or-less regular basis, employees will claim they forgot to punch in and claim they are short working hours,” Wells explains. Because of the company’s high ethical expectations, Wells will assume the employees are being truthful unless they have a concrete reason to believe otherwise.

Communication is key
Good communication is vital to imparting ethical values to employees, but it’s also essential before, during, and after a decision has been made. For instance, occasionally, BSCs will be unable to keep a promise — expected raises won’t materialize; a floor burnisher dies so a refinishing job remains half-finished; human nature takes over and mistakes happen.

If BSCs must break promises, they must explain why, as well as provide a reasonable framework under which the promise can be kept, says Tansey Martens. For instance, if employees won’t receive a promised raise because a key customer went out of business, explain that income have fallen flat due to the loss of a client, and if revenues increase, compensation will be reviewed.

That way, even if they don’t agree, they’ll have a better understanding of the problem and when it may be fixed.

“There are often many ‘right’ answers to the same question,” adds Seglin. “The best thing might not be to ensure workers must agree with you so much as trying to let them understand the process you went through in making your decision. The more informed they are of the issues involved, the more they’re likely to be understanding and accepting of the direction you chose to go.”

Seglin recalls a colleague who had success with “open-book management,” under which the owner shares financial information with all of the employees, regardless of their place in the organizational chart.

“By doing this, employees begin to understand how the company makes money, what pressures there are on the company in doing what it does, and how the employee’s own work can have a dramatic affect on the company’s performance,” he explains. “It’s an example of how the more informed a worker is about something, the more likely an employer is to find that his or her way of doing business is understood and accepted as fair and smart.”

The same communication is necessary for maintaining an ethical standard with customers.

“Not all contractors are out there for the customer’s best interest,” points out Evo Riguzzi, vice president for investigations for Optima Services, Greensboro, N.C. Overselling services and not being able to follow through is a common ethical lapse among contractors.

While overselling is something that BSCs should avoid in the first place, it sometimes happens in sales, and operations needs to pacify the customer. Honesty is key.

“You may just want to tell the customer you’re trying,” Riguzzi says “If you talk, you may lose the account, but if you don’t, it’ll go wrong anyway.”

Sometimes, you can correct a mistake or compensate for overselling before the customer even notices, but if the missing element is critical to doing the job, the only ethical thing to do is to tell the customer. Even if you end up losing the account, you keep your reputation for integrity intact.

Integrity is undoubtedly vital to other BSCs as well, but sometimes being honest can be painful. Kathleen Noble, owner of Kathleen’s Housekeeping, Stockton, Calif., prides herself and her company on their honesty and fairness. She treats her employees as family, and expects the same in return. But part of being fair to customers and employees is to know when to let go.

“I fired a person who didn’t return a key,” Noble explains. “That was very hard. I want to help my employees grow and achieve. This girl was 20, and she had two kids.”

But this employee had a history of poor performance, and the key was the last straw, Noble says.

“It was either her or my reputation, so I had to let her go, no matter how hard it hurt me,” she says.

Honesty also is a big deal for Teltara. Although the company offers a comprehensive training and safety program, mistakes do happen. And these can be costly — if a janitor accidentally bumps into and unplugs a refrigerator at a hospital, thousands of dollars worth of medicine could be rendered unusable. Still, BSCs need to encourage janitors to report such accidents rather than try to cover them up.

Since workers are the first people customers often encounter on a frequent basis, promoting a strong sense of work ethic in each worker will help the company present a more consistent image and help develop customer trust in the contractor.