The ethical alternative
This idea of having a sustainable business and creating a customer connection is incredibly different now to the last decade. Then, it was all about acquiring customers, about quantity and price rather than quality, which created a lethal combination of no real customer loyalty and a massive amount of volatility. People today are increasingly looking to buy products and work with businesses they feel comfortable with, and are willing to change their behaviour to find this. At the same time, if you are a business-owner, you want your business to be sustainable. You want to do things which are ethically right for your business, creating customer loyalty, but it’s a long game.
Taking the long view
If you form a stable, long-term mid-market, with good levels of employment, then you get a successful economy. Germany’s Mittelstand (which translates as ‘small and medium-sized enterprises’) is a great example, at the same time allowing small businesses to grow into that mid-market space, without the pressure of shareholder demands and expectations.
The UK economy, however, is focused on short-term returns. The role of equity has contributed to this, as it’s the person who holds the cheque who calls the shots. If a company is subjected to successive buy-outs, all the assets will be stripped out of it, leaving nothing of worth. Unless equity – private or public – begins to take a long-term view, it’s hard to see how we can build the strong foundations they are enjoying in Germany.
Bank on better
I admire businesses that are very clear about what they will and won’t do – and it isn’t about right or wrong – it’s about setting the parameters you feel are right for your organisation. Banks are generally rather bad at interpreting situations and we’ve got to get better at it. A lack of flexibility has created a huge amount of negative sentiment and it’s not necessary. Banking can be a great industry – but the good things we do are not seen in the headlines because we do so many other things that people perceive to be bad.
At Santander, we care about who we do business with, and we think carefully about where we put our money. We want to be open in our conversations with customers, talking to them with empathy and understanding about what they are looking for, what our challenges are as a bank, and what we can realistically do to help them achieve their aims. It’s not rocket science.
Watch Steve Pateman talk about ethical business:
Ethical business: equity
Ethical business: creating loyalty
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