Don Wharton of Victoria, BC is the SureSwift Capital Chairman, and has been involved from the beginning as director, founding shareholder, as well as a fund A and B investor. We’re excited to share this post from Don, covering his thoughts on ethical leadership and how we’re pursuing it at SureSwift Capital.
Ethical business practices are immensely important and have numerous benefits for companies, including building a positive reputation, averting legal issues, increasing employee engagement, appealing to socially conscious consumers and being the preferred choice for investors, even in a rising interest rate environment when risk tolerance is generally low. By prioritizing ethics throughout operations, companies can create a more sustainable and successful business that benefits all stakeholders involved.
With many companies in the tech space feeling increased financial pressure, there is an elevated risk of going down a path of profits over all else and abandoning ethical commitments to chase down improved numbers. I strongly believe however, if your company hasn’t already, it’s time to double down on ethics. A strong ethical foundation supports business performance, improving team productivity and retention while lowering the liabilities and risks that come with questionable business practices.
Throughout a company’s life-cycle, many experience some stage of moral decline. Most people have at least one horror story about a previous position, and I expect almost all have at least one thing in common – poor leadership.
It’s easy to recognize unethical management when you’re the one being managed, but at a leadership level, it’s easier for the waters to get muddied, especially when making difficult decisions.
The Markkula Center for Applied Ethics has compiled a list of signs of ethical collapse in a corporate setting, which include:
1. Pressure to maintain numbers “at any cost”. To be clear, setting lofty goals and encouraging team members to chase them isn’t an issue – as long as leadership is providing the necessary resources and support, and taking accountability when expectations prove unrealistic due to external conditions. But unsustainable expectations for results coupled with intense pressure from leadership is a recipe for poorly considered, unethical decisions.
2. A culture of fear and silence. The first people to spot an ethical breach, sometimes even before it happens, are front-line employees. If an organization has a culture that encourages silence, these ethical breaches will be allowed to continue and worsen, rather than being dealt with appropriately. A culture of fear and silence develops where employees see their teammates punished for speaking up about issues, or when they raise concerns that are never addressed. Over time, it becomes clear to employees that calling out ethical breaches is more trouble than it’s worth, which creates the perfect environment for continuing (and worsening) bad acts.
3. An imbalance in leadership. Author Marianne Jennings calls this red flag “Young ‘uns and a bigger-than-life CEO”, and it refers to a dangerous dynamic between top leadership and others at a company. Jennings points out that companies that face ethical trouble often have an older, more experienced CEO with a significantly less experienced, often younger team. While there are plenty of businesses with this setup that succeed, it takes an extra level of care to ensure that those working with the CEO feel comfortable providing pushback, questioning decisions, and bringing issues or perceived failures to the table. From my experience, a CEO with a bigger-than-life personality can really be any age. The incongruent dynamic between staff, and the CEO can be as a result of the disparity of power, and how the CEO wields it. For example, some managers will compromise their ethics and encourage just about anything from employees, if these managers are promised riches that are otherwise out of reach and would not be offered by an ethical CEO in the first place.
4. They feel “like no other company” or “no other leader”. Innovation is great. It drives the tech industry, and has created a huge number of great businesses. However, when a company gets ahead of the curve with a highly innovative product or model, the basics of business, accounting, and ethics can start to get lost. As exciting as innovation is, in order to avoid ethical issues, companies need to make sure that they’re staying firmly rooted in the basics, and adhering to all applicable laws and regulations, even (or especially) if they need to find a company outsider to figure out what they are. Having experienced a number of business cycles, from the rapid rising inflation of the 70s, the crash of ‘87, everything in between and leading up to the great financial crisis of 2008-09, there are always familiar themes. Leaders who experience success during these various phases, often give themselves undue credit, thinking that it is their own extraordinary skill that led to outsized profits. Cycles have impressive power, as does the rising tide have the ability to raise even the largest ships. Inexperienced company leaders who experience rapid ‘rising-tide’ success, are at risk of feeling like they are superior to other leaders and that they can do no wrong. Possibly thinking that whatever they spend money on will perpetually yield the same results. This too is a perfect recipe for ill-conceived decisions and exuberant over-spending. When similar success doesn’t come as easy, a domineering leaders ethical orientation may suffer, swaying others to make poor decisions that are neither in the companies or the shareholders best interests. Legal consequences may emerge if fiduciary obligations are breached.
5. Balancing wrongs with unrelated rights. When a company feels that they can atone for ethical breaches or bad acts by “giving back” in other areas, that’s a major red flag for a business on the brink of an ethical meltdown. If a company has a strong culture of ethics and integrity, it will work to (1) prevent ethical breaches and (2) directly address them when they occur. Glossing over mistakes with showy philanthropy only allows the underlying issues to worsen.
For front-line employees, any of those red flags may be a sign to start brushing up their resume. But for CEOs, boards, and other leaders at a company, it’s an opportunity to make a change and adjust course to prevent disaster. Many of these signs pop up slowly, and the very real pressures of business can lead even good people to make mistakes or compromise on their ethical foundation.
The Role of Leadership
Within an organization, leaders have a crucial role in shaping the ethical tone of their company and fostering culture, preventing any of those red flags from ever appearing. At SureSwift, we know that all leaders, from the CEO to product managers and beyond, set the standard for team behavior through their own actions.
Ethical leadership is the practice of demonstrating integrity and fairness in all decision-making, while creating a positive work environment that values diversity, transparency, and accountability. It involves leading by example, taking responsibility for one’s actions, and prioritizing the well-being and growth of employees and the organization as a whole. Ethical leaders recognize the impact their actions have on those around them and aim to create a culture that promotes ethical behavior. They also encourage open communication, foster collaboration and trust, and act with empathy and understanding towards all stakeholders.
At SureSwift Capital, it’s important that our leaders support ethical and responsible decision making. From consistently holding themselves to high ethical standards to providing opportunities for team members to ask questions and receive feedback, they play a vital role in creating and maintaining a culture of integrity. While being an exceptional leader means something slightly different within any given organization, we wanted to share some of the key aspects of what it means here at SureSwift.
1. High Ethical Standards: Lead by Example
Having high standards for ethical behavior and decision-making is an essential aspect of great leadership. Most leaders would say ethics are important to them. It’s rarer to find one who has put critical thought into their ethical foundation and strives to act accordingly in the day-to-day. That’s why we think it’s important that anyone in a leadership position takes time to check-in with themselves and their teams, including time for reflection and feedback in their regular meeting and planning cadence.
At SureSwift, leading by example is crucial in fostering a culture of integrity, and we value leaders who consistently demonstrate their own high ethical standards. When leaders hold themselves to high ethical standards and demonstrate responsible decision making, they set the tone for the rest of the organization. This enables a positive cycle where other team members are inspired to follow suit and make ethical choices of their own.
In any situation, a leader’s actions are the most powerful tool they have for shaping the culture of the company. By consistently making ethical decisions, they can set a standard for behavior that others in the organization will strive to meet. Building and maintaining a highly ethical culture is a never-ending process, and the best leaders are constantly reflecting on their actions and assumptions, staying actively engaged in that process.
In short, leading by example is an essential aspect of fostering a culture of integrity anywhere, and it’s a focus at SureSwift Capital. By consistently setting high ethical standards and demonstrating responsible decision making, leaders across our portfolio inspire others to do the same and help to create our culture of integrity.
2. Open Door, Open Book
At SureSwift, it’s important that all leaders, including the CEO, are always open to both asking and answering questions, challenging ideas and having their ideas challenged, giving and receiving feedback.
Something that sets great leaders apart is their ability to keep learning, always remaining open to new ideas and ways they can improve. They treat all stakeholders with the same respect, taking time to listen to and consider any questions or ideas.
A leader should also model best practices for providing feedback and direction to others. This means providing feedback in a manner that is both constructive and respectful, doing their best to make sure their input is specific, actionable, and focused on the individual’s performance.
Feedback should also be approached as a two-way conversation in order to maximize its value for everyone. When providing feedback, a manager should listen to the individual’s perspective, ask questions to clarify their understanding, and be open to feedback themselves. By creating a supportive and collaborative environment, leaders can encourage team members to take ownership of their development and grow in their role.
3. Clear Vision
All leaders must be aligned with the company’s mission and values, and have a comprehensive understanding of their own roles, responsibilities, and strengths.
For example, the SureSwift CEO must ensure that all operations and decisions align with the mission and goals set forth by the board of directors and all of which must be fully aligned with the expectations of the SureSwift shareholders. A successful CEO should have a comprehensive understanding of the company’s mission and vision, as this guides their leadership style. They should focus on the long-term success of the organization, avoid micro-managing day-to-day activities, provide guidance and oversee performance but once aligned, allow teams to operate effectively. The CEO must maintain strong communication with other leaders within the company to stay informed and engaged, while also having the discernment to step back and trust their team to execute their tasks effectively. In essence, a CEO must strike a balance between involvement and delegation, while consistently aligning the organization with its mission.
4. Keep Information Flowing
Leaders within a company also play a crucial role in ensuring that information flows smoothly between team members and stakeholders. They can achieve this by promoting open communication, encouraging collaboration and teamwork, and implementing efficient systems and processes for information sharing. Leaders can foster a culture of transparency and trust, where team members feel comfortable raising concerns and sharing information. Regular meetings, both one-on-one and in groups, can also be used as an opportunity to update each other on progress and share important information. Additionally, leaders can leverage technology such as project management tools, team collaboration platforms, and virtual meetings to facilitate the exchange of information. By prioritizing effective communication, leaders can keep the entire organization informed, aligned, and engaged, leading to better decision-making and overall success.
5. Continually Seek Improvement
A key responsibility of leaders is to implement processes for continual improvement. In a constantly evolving business environment, it is essential for leaders to continuously assess and refine their approach in order to stay ahead of the curve. While different leaders find different approaches to this work best for them, there are a few universal strategies that leaders use to foster a culture of growth and improvement within their team.
A cornerstone of this is actively seeking out and encouraging suggestions and ideas from team members. This not only helps to engage team members and build a sense of ownership, but also provides valuable insight into areas for improvement. Another strategy is to regularly evaluate performance and identify areas for growth, both for individual team members and for the organization as a whole. This is done through performance reviews, goal setting and tracking, and regular feedback sessions.
Encouraging training and development opportunities is also a great way for leaders to support continual improvement. Recently, we’ve increased access to mentorship opportunities, which we believe help team members grow their skills and knowledge, to the benefit of the entire organization.
Finally, leaders can create a culture of continuous learning by setting an example of curiosity, growth mindset, and a willingness to embrace change. By embracing the idea that there is always room for improvement and taking concrete steps to make it a reality, leaders can help their team stay motivated, engaged, and on track towards success.
Leaders play a critical role in shaping the ethical tone of a company, and we’re proud to be developing leaders who are fostering a culture of unwavering integrity at SureSwift Capital. Through their actions, humility, communication, and leadership, our all-new leadership team will thoughtfully and conscientiously guide us towards a bright and responsible future. Culture is about so much more than words can say. I am truly excited to feel and experience where we go from here.
An immense and heartfelt thank you to everyone building SureSwift Capital!