Driving an ethical business culture in the digital age
Customers want to work with companies they trust.
Recently the Ethisphere Institute released a list of the 2017 World’s Most Ethical Companies, and included standard-bearers like Starbucks, Target and Visa. Those are all well-known names with recognizable business models, but why is this so important in the digital age?
Selling the “value” of ethics and compliance can be a difficult task in the Digital Age. Companies are nimble, fast-moving and leaders are reticent to do anything that might slow down the company’s momentum. However, ethics and compliance are still very relevant in the Digital Age and the reason for this boils down to Speed, Transparency and Trust.
The Digital Age is defined by speed. Consumers demand quick bug fixes and product updates in the applications that power their devices. Consumer patience grows shorter each day with numerous studies showing that consumers will only wait a few seconds for a web page to load before they will move on to a different site.
With info travelling around the world it is critically important that ethics and compliance are relevant concerns. When information flow is positive, companies can reap many rewards in terms of brand awareness, stock appreciation and relevance. Conversely, when the information flowing around the globe is negative (particularly when it comes to issues that involve a company’s ethics), the results can be catastrophic.
Recent examples include cheating at Volkswagen, bribery at Brazil’s Petrobras or the political scandal in South Korea that has weighed heavily on Samsung. Each incident has the ability to deflate an otherwise high-flying company.
Customers in the Digital Age demand transparency from their vendors – whether in understanding how their personal data is being used or in learning about the types of things a company is doing in the area of corporate social responsibility.
Transparency is important both internally – so employees understand how rules apply to them – as well as externally, so customers have a good understanding of what they can expect from a vendor in the business relationship.
Recent data breaches at companies like Target, Home Depot, Sony and Yahoo have also forced companies to operate with a higher level of transparency as customers and regulators are rightfully demanding that customers be made fully aware of how something like a data breach will impact them.
Trust and reputation can take a lifetime to build and only a moment to destroy. Companies in the Digital Age want to know with certainty that they can trust the vendors they choose to do business with. A robust investment in ethics and compliance helps companies ensure that they can be the type of trusted business partner that customers rightfully demand.
The world is rapidly changing around us in the Digital Age, but one thing remains constant – customers want to work with companies they trust. A focus on ethics and compliance by business leaders in the Digital Age will help ensure the levels of trust and transparency demanded by customers and regulators, and ultimately help define winners and losers in the Digital Age.