HOW can you tell if your business culture needs improving?

First, ask questions of those who work in it, those who sell to it (suppliers have a particularly keen sense of their customers’ culture), those who buy from it and those who quit it. You must do this carefully, or you will receive false answers. Get someone outside the business to do it for you and sign a contract that makes them tell you the truth. A contract that can, if necessary, be published later on.

Second, make your own discreet enquiries at CEO/director level of company bosses who are known to be reliable and have the least interest in presenting a wrong picture. You have to qualify the informants – or, rather, you have to have been qualifying them for some time. The questions you will ask them will be specific; the conclusions you will come to, general.

Third, as far as possible, clear your own bias. Intelligent people can do this though never completely. Minimum bias will lead to substantial answers not just suggestions of “rebranding”, as proposed by the Confederation of British Industry. The idea that you obliterate a crime by calling the offender Bert instead of his given name of Fred would be laughable if only it were not so pathetic.

Fourth, ask yourself about what ethical standards you, as boss, would like to display, what the law demands that you do, what your shareholders increasing awareness of business behaviour implies and what society, through its bumbling, erratic progress, insists.

Ethics

Ethics is not generally an item on board meeting agendas. It ought to be. In a world dominated by economics, hopefully to the avoidance of further war, business is increasingly responsible for political decisions. Politicians don’t like it and will retaliate, as they have already done in many countries, to retain their control of political events. Arguably that is what the voters – where there are any – want. Whatever the political efforts at control, economics will continue to play an expanding role in governance for the foreseeable future.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

If enterprise is to continue to fuel humanity’s progress it must become more responsible in its social role and modify its profit role to satisfy the universal human wish to be happy. It will only achieve this when it switches from reluctantly conforming to ethical laws to leading the way in redefining the social expectations of an increasingly post-religious world. Its commercial ethics are no longer purely commercial. They must now be visionary.

Vision

The great explorers of the future are already presenting a potentially interconnected universe. Their projections are exciting and stimulating. They will count for little if society does not itself have a credible view of its future purpose. Business will be a major part of that view for reasons of generating resources and disciplining execution. If companies don’t control their own behaviour, society will do so. When that happens the methods applied will be crude and, often, economically crippling. If you doubt this, ask Jack Ma or Elon Musk.

Fear of business vision is inevitable and acceptable. Every invention humankind has made has brought with it risk and reaction. Every drug has side effects. Each corner navigated presents potential monsters. The phrase “long term” is now used mostly to describe an excessively tiring semester in education.

But as our ambitions reach further ahead and higher into the sky we need to think about where we are trying to go. Business failure to look ahead is the greatest single cause of our climate problem. Vision requires a purpose humankind is still trying to fathom. Business visions must in future be for society not just for profit.

Empathy

If ethics is kept out of boardrooms, empathy is kept even further out of managers’ minds. Its connotations of being wishy-washy and touchy-feely leave a fear of feeling over function, protection over progress. “You cannot have a soft spot for a singeing shambles,” someone said. As John Kerry, climate czar, might respond: “Actually, you can.” Visit any hospice and see how strict discipline combines with serious sensitivity. Few situations demand such a combination.

We barely know what empathy is yet, even though we use the word frequently. To relegate it to the role of understanding is to belittle a tool of immense importance, possibly the next real breakthrough in cognitive cooperation. Its use in assessing a potential employee, in handling someone else’s rough treatment, in supporting without becoming an unnecessary crutch, is its overwhelming value in people management. Any employer who is without empathy is today doomed to personal failure. His business will have the same fate.

Rewards

People should, as far as it is possible, enjoy their work. It also brings with it material rewards. For many people that is its main purpose; for some unfortunates, its only purpose. Surveys show that, important as money is, people look increasingly for more from their jobs than a payout. They are spending a significant part of their lives at work. Those they work with, the environment in which they toil, the success they have in achieving the goals they are set, or set themselves, is key to having an agreeable life.

What do you aim to achieve for someone who is still learning about life?

Challenge probably first and with it the ability to make decisions and mistakes, and learn from them. To help someone engage in the art of forever learning is to enable them a gift they will use and always be grateful for. Satisfaction that we are worthwhile is the next most important achievement humans seek. To be “someone” requires recognition, not effusive praise.

Reward is money plus other material benefits for being an employee or supplier. They have been earned, so they should be paid promptly. Poor business behaviour is exacerbated by the tendency for big companies to delay payments to suppliers. The damage it does to how a company is perceived cannot be overestimated. Delayed payments are, in any case, a mythical enhancement of cash flow because of the “one-time” effect. I have always paid on receipt of invoice unless there is clearly attempted fraud. The improved service it buys is amazing.

Value your employees

Pay people what they are worth to the business. If their value goes up, increase their wages. If they are not performing well and the problem persists, don’t increase their pay. If you have to fire someone (other than for misbehaviour) offer them a humbler job at lower pay and give them a few months to decide if they want it. They will never accept it but they will always be grateful for the gesture. Former employees are your best – and the worst – ambassadors.

Handling people well takes time and effort. It paid off in Cerebos Pacific – we sold the business for 25x earnings. And, 32 years later, those managers who are still alive remember my birthday every year. More importantly, they are still happy.