Let’s be honest, contractors are not known for being ethical or honest. This is especially true in the home improvement business. Homeowners may be more likely to trust a contractor who is ethical and honest, as they know that the contractor will not try to take advantage of them.
Home improvement businesses can be successful by following a few simple ethical guidelines.
What Is Ethical Leadership?
There are many different types of leadership styles, but one that is particularly important for home improvement businesses is ethical leadership. This type of leadership focuses on doing what is right, even if it is not the most popular decision.
Simply put, ethical leadership is the practice of making decisions that are in the best interests of the people that an organization serves.
Why Is Ethical Leadership Important In Home Improvement Businesses?
There are a few key reasons why ethical leadership is so important in home improvement businesses:
- Homeowners are trusting their most valuable investment to the home improvement contractor. Your clients deserve to work with a company that will serve their best interests.
- As a leader, you set the tone and standard that your employees will follow in serving one another and your clients.
By following ethical guidelines and demonstrating ethical leadership, you will build trust and credibility with your clients. This trust will lead to increased business opportunities, as homeowners are more likely to choose a contractor that they trust.
Ethical leadership is important in home improvement businesses because it is essential to creating a culture of trust and accountability. A culture of trust means that employees feel they can come forward with concerns and problems, and that the company will take action in response. A culture of accountability means that employees know they are responsible for their actions and the outcomes of those actions. A culture of trust and accountability is essential to creating a safe and effective workplace.
What are some examples of unethical leadership in home improvement businesses?
Ethical leadership is important in any home improvement business because it sets the example for the employees and ensures that the company’s practices are in line with its values. Some examples of unethical leadership in home improvement businesses include:
- Running off with the customer’s deposit before any work is done.
Ok, that one is obvious to everyone, so let’s take a look at a few more not so obvious ones:
- Watering down the paint to save money or meet the budget
- Using lower grade materials than promised even though they are still good materials
- Hurrying to wrap up a job completion so you can get paid and make payroll while ignoring some touchups or punchout items that you see and the client does not see, at least not yet.
- If you work on a percentage-share contract with your subcontractors, not showing them the real price you are being paid for the job. We hear a lot of stories about this from crews in our neck of the woods.
- Grossly overstating earning potential to job applicants, another one we see a lot in our industry.
- Lowballing the scope of work to get the job or failing to tell clients upfront of likely additional expenses they will run into once the project is started.
- Creating other win-lose situations between you and your clients or you and your employees.
I have heard many contractors over the years justify their unethical actions by stating, “I had to put dinner on the table for my family.”
What are some examples of ethical leadership in home improvement businesses?
Ethical leadership often involves difficult decisions. Many times these decisions poor choices between what seems right and what is profitable. The pit profits against people.
Here are a few examples of ethical leadership:
- Telling the prospective client the truth even when it will cost you the sale
- Fulfilling your contract promises even when you lose money
- Choosing people over profits.
You can value both people and profits at the same time, but sometimes you have to make a choice between the two. The lost money is much more easily regained than the trust of your people.
How Can Home Improvement Businesses Follow An Ethical Leadership Model?
Here’s the ethical leadership definition and ethical model we follow at my own company, Phillips Home Improvements: If this were my own mom’s house (or some other person I love dearly), how would I want her and her property treated? In completing her project, what material would I want to be used, and what methods would I want to be employed?
It’s that simple.
Ethical Model: How would I want my mom treated? Treat every client like that.
How bad ethical action impacts your business
Your employees see all of this, and although they may follow your lead, trust and credibility are destroyed, and your top performers will find jobs elsewhere with a leader they can trust and admire.
Unethical leadership and unethical action attract unethical people with unethical thinking. You attract what you are!
You can hide bad ethics from your customers for a while, but “you sin will eventually find you out” and your customers will leave as well.
Bad ethics is bad for business. Good ethics is good for business.
How can you implement ethical leadership in your own home improvement business?
Everything starts with the leader. The first step is to acknowledge that this is your problem. The solution starts with you.
Here are 4 steps you can implement right away to start improving your organization’s ethical behaviors and ethical traits.
- Commit to ethical business practices even when it will cost you time or money
- Write out and communicate regularly your ethical standards to your team
- Reward employees who go out of their way to uphold ethical standards
- Deal with, do not ignore, violations of ethical standards, even if this means firing your top performer.
If you will do just these four, he will begin to see the characteristics of ethics rise and your company.
Ethical leadership is an important tool for any home improvement business. It ensures that decisions are made based on what is right, not what is popular. By implementing ethical leadership in your business, you can create a more positive and productive work environment that values people and profits. I bet growth will be automatic as well.