Addressable market

Yesterday, we recorded an episode of the Great Women in Compliance podcast (I haven’t changed genders; they needed someone to step in quickly). Hemma Ramrattan Lomax (well worth a follow) asked a great question.

In Bootstrapping Ethics, I argued that “Building a culture of integrity is impossible if you’re simultaneously setting unrealistic corporate objectives.” By that, I explained that if targets are unreasonable, it may lead to corner-cutting and unethical dealings.

Hemma asked how that squares with challenging economic times. For instance, if companies need to lean into outsized performance to survive, ask people to do more with less. “How do we mitigate the impact on ethical decision-making in these conditions?”

It’s a fantastic question.

There are two aspects here – one strays into psychological safety and building cultures where people are committed to a common goal (e.g., keeping the company afloat). Today, I’ll focus on the other issue: do stretch targets always mean ethical compromise?

Not if risk and sustainability inform strategy. Yes, if risk and sustainability are after-the-fact considerations, meekly following strategy.

This isn’t new. For 15 years, I’ve been working with organisations to establish an ethically addressable market. For instance, if you construct things, there are many sub-markets (e.g., real estate, infrastructure, and government facilities). Not all present uniform risks – building materials, location, corruption, and local community (brownfield, greenfield, etc.) considerations will differ across each project. If risk and sustainability are part of the market opportunity discussion, two things happen:

💡 You get to really define risk appetite (what projects fit the risk-reward balance).

💡 You start to think about de-risking strategies before strategy sets sail (e.g., stakeholder mapping).

Is it easy? No. But then, as Ethics Insight nears its fifth anniversary (next week), there’s nothing easy about running a business. Nor should there be..