Ethics and Values: August 2005 Archives

During my week off we went to a couple of movies (Four Brothers and Red Eye -- both were worth seeing). While we were making our way to the show, I was struck by some unethical selling practices at our local multiplex.

First, when you walk up to buy popcorn, they try to sell you a "value pack." Now we have been trained by fast food to understand this to really mean it is a value. I look frantically up at the prices to see what the value price is, but I can't see any listing. It must be the newest, latest deal. After all, at a fast food joint a value meal might save you fifty cents when compared to buying the sandwich, fries and drink separately. You think, "What the heck. I might as well get the whole deal for a little more money."

But not at our theater. We soon find out that their "value" pack, a popcorn and a drink for example, costs exactly the same as buying each separately. There is no value in their value pack!

Second, once we said no thanks to their value offering, we then asked for a medium popcorn. At this point the young person behind the counter holds up a medium bag limply with a rather disappointed look on his face and says, "This is the medium bag. Are you sure it is going to be big enough?" Read between the lines, "You idiot! Why would you waste your money on this puny bag?"

Now out theater is part of a large, multi-state chain. So I bit my tongue, at the strong encouragement of my wife, and moved on to the show. I wasn't going to change the practices of the theater by yelling at the high school kid behind the counter.

So instead, let me offer these simple suggestions to all the entrepreneurs who read this site on some basic ethical principles that may keep you from becoming a company like the one the owns our local multiplex:

- Don't mislead your customers.
- Don't lie to your customers.
- Don't treat your customers like they are idiots.

I will be taking a week off for a little summer break. Please visit some of my favorite sites listed on the right column of my site. If you are new to my site, please feel free to take this chance to go a root around in my archives. I will be back on August 22nd.

StartupJournal offers some additional statistics (from an American Express survey) to those I posted on Wednesday about entrepreneurs on vacation.

This new survey tells us that although we may physically take time off, we may not really be mentally taking time off. And that can take its toll over time, as we all need time to rest. In the past, I have written about this importance of taking time off (here, here, here, and here), as hard as that can be for entrepreneurs.

It may be too much to ask to simply work at full speed for 51 weeks and then try to stop for one week of vacation. Learn how to take time off in small bites. Find something that you can do once a day or even just once a week that takes you mentally away from your business.

In learning how to rest, many people much wiser than me tell us that it is essential to find a way to find true silence in your life. Take a little time each day to pray, meditate, contemplate or whatever your personal preference. But don't always use words; take time for true silence.

The fruit of SILENCE is Prayer
The fruit of PRAYER is Faith
The fruit of FAITH is Love
The fruit of LOVE is Service
The fruit of SERVICE is Peace
(Mother Teresa of Calcutta).

Inc.com has a story that just made me shake my head.

About two-thirds of small business owners are satisfied with how they have balanced their personal lives and work schedules, despite the fact that they work an average 52 hours a week, according to a new survey released by the Wells Fargo/Gallop Small Business Index.

The survey also found that over half of small business owners work six days a week, with more than 20% working all seven. Fourteen percent of surveyed small business owners reported taking zero vacation days in a year, and almost 40% of those who do take personal time off said that they still answer work-related phone calls and email while on vacation.

Nonetheless, 67% of small business owners said they were satisfied with their personal life-work balance and almost 90% said they were satisfied with being a small business owner in general.

I've been there and I know what they are going through. During the first couple of years of your business you often can't take much time off. Even if you do, you are thinking about the business. You are running on adrenalin, excitement, and fear. And even with all of this, it is still fun.

But, at some point what was necessity can become a bad habit. And that is the dark side of entrepreneurship. When the business can take over your life and cost you much more than you ever anticipated: your family, your friends, and your health.

Here are a few thoughts on how to avoid the dark side:

- Keep control of your business and your life, even in the early stages.

- Set goals for your life as well as your business in your business plan. Life goals are as important as financial goals over the long run.

- Engineer time for the other things. It may that you make it home for dinner every night, have a date with your spouse once a week, or never miss your kid's games or concerts. You may need to go back to work afterward, but take the time.

- Make sure any breaks you take are both physical and mental. That will be hard at first. My wife and I tried to meet for lunch when I was building my business. The first few times I know my head was not there. But, I worked at it and eventually learned how to get away mentally. Believe me, it took hard work.

- Set goals for separation. I met an entrepreneur who had been able to build up to six weeks of vacation a year. And she was trying to add a week a year! She became one of my role models. I tried to learn from her how to build a business that could run itself when I was away.

- When life gives you a break, take it. When we sold our business I immediately was mentally working on the next deal. But, my wife tugged my sleeve and said "take a break and make sure what you really want to do next." At first it drove me crazy. I was used to running in overdrive. However, that break gave me time to reflect and contemplate where I should go next. And surprisingly to me, it was not the next deal, but into teaching.

Entrepreneurship is in my blood. But so is being a husband, a father, a friend, and now a teacher. Learning how to sort out all of the conflicting demands takes hard, conscious work. It never just happens.

We had an interesting debate in my MBA class about the role of culture in hiring and firing employees in a small business. While the case for using culture in hiring is fairly straight forward, it is the issue of termination that seems to make some uncomfortable.

The culture in a small business starts with the values of the owners. Each decision she makes, each action she takes shapes the culture of her business. Over time her values will become part of the shared understanding of "how business is done around here."

But as a business grows, the people who join the business bring their own values and behaviors that they have learned in other companies. We found in our health care business that many very technically competent employees just did not fit in our company because their way of working had been shaped and formed by one of the large national health care companies. Many of them never could adapt to our distinctly different culture.

Human resource experts tell us that culture should be a major factor in hiring employees. Even state employment agencies often strongly recommend culture as a criterion. They assure us that it is not a matter of discrimination, but trying to find people who will fit the culture and stay with the business. For state employment folks this is important as they are trying to keep unemployment down. If too many people end up in businesses where they do not fit, it leads to increased turnover and unemployment.

We tried several creative ways to find out if someone would fit in our culture. We had a very decentralized structure that was not dominated by our physicians. We had to make sure that we hired physicians and staff that fit into this culture. We would have them sit in treatment meetings and meet formally and informally with many of our staff. We would talk to our front line staff about each possible hire, and it was that group who often had veto power. Several prospective employees were not hired because they did not treat our receptionist with respect.

Firing employees because they do not fit in a culture is where many, especially those in a corporate environment, get uncomfortable. They seem to hope that eventually these employees will just realize that they do not fit in and leave on their own accord. But, in a small business we do not have the luxury of keeping any excess employees.

Performance in a small business is more than just doing one's job. The culture of the business is still a work in progress, and the business owner must be diligent to make sure that it is evolving the way they want it to. Just because a salesman meets his quota is not enough to keep his job. If he does so in ways that undermine the way the owner wants to build relationships with customers that can be just as important a criterion for continued employment as selling product.

It may be a soft criteria and it may seem subjective to an outsider. But, an entrepreneur knows how she wants her business to run and she has an obligation to make the tough decisions to make sure that the culture develops in a way that is consistent with her values, her ethics and her vision.