by Dave Gardner
When it comes to the responsibilities projected by a business unit, both on the corporate or family-owned level, the amount of value placed in company values seem to have an increasingly powerful impact on sustainable profitability.
Keith Yurgosky, business consultant with the Small Business Development Center and adjunct faculty at the University of Scranton, teaches a class in corporate responsibility and explained responsible behavior is now generally expected to be demonstrated by all companies. Because commerce involves so many "players" including suppliers, landlords, government, employees and customers, a negative event revealing irresponsible behavior can have dire consequences and negatively impact sustainability.
"Millennial buyers have become very important customers, and as a group, are really big on the impact of environmental issues from packaging to process to finished product," said Yurgosky. "Social media spreads the word quickly about success or failure with these issues, so a company had better act responsibly."
When it comes to corporate responsibility, Yurgosky points out that top management responsibilities include profit, legal and environmental issues, ethics and sustainability. Market forces must always be considered, and this comprehensive message about responsibilities must be a part of the company's outreach.
"Green washing, where you say one thing about environmental issues but then do another, must be avoided in the era of social media," said Yurgosky.
Workforce issues with the attraction and retention of talent are also front and center in the post-Great Recession economy. Today's tight workforce will undoubtedly continue or even intensify, thereby making it vital for companies to display responsible behavior and deter talent heists from competitors.
Despite the popularity of social issues within the nation, the number one responsibility of senior business management is not to make the world a better place, according to William Aubrey II, president and CEO of Gertrude Hawk Chocolates. The goal for management is to generate a healthy profit for the company's shareholders, and only by doing this the world becomes a better place as jobs are created, the value of work is offered, and increased numbers of people can participate in the economy.
"It's a hard fact that there will be no mission if there's no margin," said Aubrey. "Making a profit is not a dirty process, as money flows down to the workers."
While maintaining a realistic view of business, Aubrey also emphasized that ethics are vital within any operation. He listed honesty, efficiency, directness, inclusion and protection as values his company cherishes, and noted that employee exclusion limits vital intellectual horsepower needed for innovation.
"A company must protect employees to be free to do their jobs, without bullying or harassment," said Aubrey. "Yes, toughness can be a positive, but meanness between employees is never to be confused with toughness."
According to Aubrey, with environmental issues, laws exist to protect the landscape and they must be followed. Failure to comply with the law can bring criminal or civil penalties to the company, but accurately communicating environmental compliance to socially conscious millennial buyers can be difficult.
He noted that attitudes, priorities and responsibilities all change as people mature, and today's millennials are no exception to this scenario. However, the millennials are America's first generation to be able to instantly access information about issues, such as a company's ethics and behavior, and this must be understood as a company engineers its outreach.
"If we look at the way the kids can access anything they want to know, company management must play a long-term game, including with the company's behavior," said Aubrey.
When business responsibility is discussed with Susan Reilly, executive director of the Family Business Alliance, the conversation zeroes on employee retention and the escalating costs of replacing lost workers. She cited data from the Society for Human Resource Management's new Human Capital Benchmarking Report, which indicated the average cost-per-hire around the nation has risen to $4,129, while the average time it takes to fill a given position is 42 days.
In addition, the report revealed that millennial employees can be job hoppers, average employee tenure is eight years, the annual turnover rate is 19 percent, and the involuntary turnover rate is eight percent. Reilly emphasized these are national metrics predictably will vary by region, including within NEPA.
Reilly is a huge supporter of business organizations creating and then openly emphasizing a mission-vision statement with specific behaviors listed. Adherence to these behaviors should then be a part of employee evaluations, thereby assisting the efforts to both attract and retain talent.
"Many businesses within NEPA often have an older management staff, and adherence to an official mission-vision policy may be somewhat of a new concept for them," said Reilly. "However, there are quite a few regional businesses now using mission-vision, and they may include this with effective communication about business conditions and finances to keep the employees in the loop."
Reilly admitted that despite the best efforts of management, some employees will not accept the adherence to vision-mission. Other companies may create a mission-vision about the company's responsibilities, but then stick the document in a drawer and ignore it.
Communication of a company's responsibilities through a mission-vision must use processes best-matched to the target audience. This may include text, phone and email, as well as tailoring of the communication as needed.
"The upcoming Generation Z is craving more personal communication than the millennials, and a smart employer will be able use this appetite as part of their communication strategy," said Reilly. "These kids will appreciate a mission-vision and use it to help them spread their wings and maintain relationships internally."
As the workforce tightens and more youth fill skilled positions, Reilly forecasts that business responsibility will be more important than ever. This includes the modern entrepreneurs, who she has noticed have the same curiosity and drive as their predecessors, but also demand more inclusive attitudes, less bulldozer-like behavior and increased collaboration with resources.
Case history with values
A regional company that is effectively utilizing a system of values to project business responsibility, according to Reilly, is Dempsey Uniform and Linen Supply. Kristen Dempsey, vice president, helps manage the company with a workforce of approximately 500 over a multi-state area.
"We approach the business as a family, and values with longevity are important to us because we want to sleep well at night," said Dempsey. "Communication is also vital for us to transmit these values down to our people, so that they understand the decisions we make."
The official Dempsey values include: do the right thing, make it better than it is today, uphold the gold standard for products, be the customer, think long-term, reduce our environmental impact and create a sense of family.
Dempsey relied on her architect-sister Michelle, owner of DxDempsey, to transform the business facility so that banners communicate these company values immediately upon entering. Specific behaviors reflecting these company values are required of every employee, thereby projecting an atmosphere of responsibility both internally and externally.
"Responsibility, as we see it, involves doing the right thing even when no one is looking," said Dempsey.
According to Dempsey, in the drive to compete with larger corporate firms driven solely by corporate returns, her company emphasizes trust with employees, suppliers and customers. She said that an overly aggressive internal attitude can come back and bite you, while adherence to values creates a safe workplace that values more than simple productivity.
Behavior is also a part of a Dempsey employee performance evaluation, and in some cases, despite high production metrics, an employee may be disciplined or released for negative attitudes or behavior. This system creates opportunities and practical tools for managers to promote living values during evaluations.
"It's vital to hire people with integrity, because skills are easier to teach than trying to install integrity," said Dempsey. "We strive to shut down problems right away if an employee projects a bad attitude or loss of integrity, and always want to create better alignment with each customer."
Business processes can also be used to create integrity within the Dempsey operation. According to Dempsey, each route driver is paid hourly, as opposed to competitors' systems with a percentage of each invoice generated, thereby eliminating any push to oversell a customer to raise pay.
As part of making smart and value-based decisions for the business and the environment, Dempsey has also completed a huge and expensive redo of its production equipment making the system extremely water and energy efficient. This earned the designation of being the nation's first green laundry, while creating less waste with cost savings over the long haul.