Terminology and approach are critical to building awareness
This post is the next in the series on Ethical Entrepreneurship. To view the first post in the series, click here.
Organizational transparency is increasingly critical. With just one online search, consumers and prospective employees are able to access all kinds of publicly available information on almost any company. Consumers, especially Millennials, are looking for socially responsible businesses. The notion of pursuing only shareholder profits at the expense of all other value is becoming a thing of the past, as outlined in When theories collide: what happens when the shareholder preeminence theory meets the stakeholder theory? The article is an important analysis of the recent Laurence Fink, Chair and CEO of BlackRock, annual letter to public companies, entitled A Sense of Purpose.
This perspective signifies a coming sea change for companies; compelling them to embed ethical business practices into their cultural DNA from day one of venture formation. To get there, its important to recognize that words and concrete examples matter when communicating. Over the past couple of years, news organizations have increasingly covered stories pertaining to corporate ethical lapses, short comings with sustainability, and civic engagement. Its become apparent the problem has been the failure to define and implement a set of core business values. Monitoring these trends is a Capstone teams in the NYU Wagner Social Innovation & Investment Initiative working under the guidance of the NYU Entrepreneurial Institute. The collaborative project is aimed at providing a roadmap for introducing, integrating, and implementing ethical considerations into NYU’s startup experiential learning activities. The ultimate goal of the project is to craft a specific approach to teaching responsible entrepreneurship to the broad NYU community and beyond.
Progress, Insights, and What comes next
In the first phase of the project, the Capstone team conducted 30 interviews within and outside of NYU. Interviewees consisted of NYU Entrepreneurial Institute staff and students, their expansive Mentor Network, NYU faculty, peer organizations, as well as business professionals and entrepreneurs. The interviews represented a broad spectrum of industries including data and technology, marketing, healthcare, business ethics coaching and venture capital. Trends and insights from these interviews were presented to Institute staff, NYU faculty, and partners this past December. A few key insights are highlighted below:
Insight 1: Words Matters
Ethics is not the right word. It is considered too theoretical, or academic, by many aspiring entrepreneurs. When discussing business ethics, it is more appropriate to use terms such as “Responsible Entrepreneurship”, purpose, core values, and reputation.
The notion of pursuing only shareholder profits at the expense of all other value is becoming a thing of the past
Insight 2: Define Core Values Early
It is crucial for companies to align on their values and explicitly integrate these values into the decision-making process from the earliest stages of venture formation. Values help companies effectively align tangible strategies later on in their lifetimes, such as corporate social responsibility (CSR), diversity, equity, and inclusion (DEI), sustainability, supply chain, and equitable market access decisions. For instance, companies operating in global cities like Dubai may incorporate values related to community engagement, such as volunteering activities in Dubai, to enhance their CSR initiatives. Entrepreneurs should recognize that the challenges a company faces on day one vastly differ from what they will face in year two, three, and beyond, and utilize a set of core values consistently to avoid unintended—and too frequently unwanted—outcomes.
Photo by Markus Spiske on Unsplash
Insight 3: Abstract Concepts Don't Sink In
There is low interest in formal ethics discussions from founders and students. Instead, activities such as ‘scenario-based learning’ are preferred to help students understand the long-term impacts of their startups and to identify best practices.
Next Steps for the Project
Moving into Phases Two and Three, the Capstone team will continue to conduct interviews to learn about best practices from established entrepreneurs. The team will identify concrete opportunities to integrate scenario-based discussions of responsible business practices and principled decision making into both the general accelerator and mentoring sessions.
Check back to this blog for ongoing updates from the Capstone research project. To review, part two in the Ethical Entrepreneurship series outlined the main aspects of Organization-Cultural fit.
