I think we need to have a conversation about ethics in Scaleups

Money talks, and everyone is corruptible.

I’m a bit ticked off today.

Google’s YouTube shorts algorithm spent yesterday slowly but not subtly attempting to influence my 11yo to take up vaping. Within two hours, his feed went from kids playing Roblox to teenagers unboxing and reviewing the flavour of vapes.

So, it begs the question, how did a company that had “Don’t be evil” as a core tenant of their corporate code of conduct for almost two decades get to this point, and what lesson can we as leaders take from this?

In the face of hyper-growth, your personal and corporate values will be tested.

Suppose you’re an importer and retailer of handmade clothes. When you’re small, it’s probably easier to be close to your suppliers and comfortable that their sourcing and processes are ethical. But suddenly, you’re super successful and need multiple suppliers to meet demand. Will you maintain or improve your processes to ensure you remain true to those values, and what will you do if the cost to keep them erodes your margins and impacts your ability to compete? It will probably sneak up on you, and scale will present tension between profit and ethics. An even harder decision if your investors are expecting 10x returns.

Even the best face this dilemma.

There’s a growing swell of tech Founders and CEOs who mix entrepreneurship with philanthropy on the global stage by espousing that corporations can be a force for good and have more chance of changing the world than governments. Here in Australia, you have Mark Cannon-Brookes of Atlassian fame taking up the fight against climate change by buying a controlling share of one of our largest energy providers and forcing the board to change their strategy; abroad, there are folks like Mark Benioff, founder and co-CEO of Salesforce who is regularly reported as meeting with Presidents and lawmakers to fight for social good and for investing millions of dollars, time and product into philanthropy.

But how do you juggle ethics in the face of ambitious growth?

It’s a tricky dance for leaders, as demonstrated in 2018 when famously, 650+ employees signed a petition asking Salesforce leadership to end a US government contract estimated to be worth $40m. They’re not alone either; Amazon, Microsoft and others have faced similar pressure from staff to revisit government contracts over ethical concerns. Given Salesforce’s scale, $40m isn’t a significant number, but if you’re relentlessly chasing a US$50b revenue target, you will have to consider the problem.

If an ethical question falls in the forest and no one is around to discuss it, does it even exist?

Thanks for reading this far. If you’re at this point hoping for the answer, then I apologise; I don’t have a silver bullet. Honestly, I don’t think there is one; but I believe it’s something that we, as the leaders of businesses, need to acknowledge and discuss openly. So, when you’re successful as a scaleup leader and presented with an ethical conundrum, how will you respond?

Perhaps I can just ask you to think for a moment about the Aussie pre-teens being bombarded with unethical advertising for vaping products by an algorithm designed solely to drive engagement/revenue and consider if that’s ok. If you don’t think so, talk to your leadership team, investors, and other stakeholders about your values and see what comes up.

If all else fails - Don’t be evil!

If you’re a senior leader in an Aus/NZ Scaleup and you’re keen to meet with your peers to discuss topics like this, then I’d encourage you to consider joining the Scaleup Leaders Network.