Guide Helps Startups Incorporate Ethics Into Business Plans

Framework Helps Entrepreneurs Stay Competitive, Avoid Pitfalls

Researchers from CMU's CREATE Lab have developed a guide that business accelerators and other organizations can use to help startups bake ethics into their businesses.

Founders of new ventures may spend most of their time creating business plans, perfecting new technology and contracting with suppliers, but it behooves them to also think about how to treat employees fairly, design and market their products ethically, and be transparent with investors.

To help founders establish these ethical values early and determine how they will act on them, Carnegie Mellon University's CREATE Lab has developed a guide for use by business accelerators and other organizations promoting startups.

Written by Jessica Pachuta and Dror Yaron, both research staff members at CMU's Robotics Institute, the guide, "Making Ethics Practical in Startup Spaces," helps founders anticipate ethical dilemmas and tradeoffs before they are faced with making difficult or irreversible decisions.

"It's hard for a lot of young businesses to access formal ethics training," Pachuta said. "Most people in startups don't have time to stop and read Aristotle."

She and Yaron embedded themselves last year in Innovation Works' AlphaLab Gear accelerator, working with eight of its companies to develop a guide that is practical and accessible. It's available online, but is designed for use by a facilitator, not as a self-help tool. Operating within an accelerator, such as AlphaLab Gear, provides accountability as founders think hard about what values really matter to them, she explained.

"We have been proud to partner with CMU's CREATE Lab to pilot this ethics guide in our accelerator programs, AlphaLab and AlphaLab Gear," said Jim Jen, chief operating officer of Innovation Works. "Developing a company foundation and culture based on an ethical framework is critical for startups as they face numerous challenges in interacting with customers, partners, investors and employees as they grow and scale their companies."

Building ethics into the day-to-day operations of a business isn't just a matter of doing good, but of being competitive, Yaron said. That's particularly true in recruitment, he added, noting that employees appreciate and seek out employers they can trust.

"People will accept pay cuts to work at a place they believe in," Yaron said.

The guide doesn't prescribe a set of ethical practices, but includes exercises that lead founders to identify their top priorities and create a plan for putting those values into action.

The Hillman Foundation and the Benedum Foundation supported the CREATE Lab in developing the business ethics guide.

For More Information
Byron Spice | 412-268-9068 | bspice@cs.cmu.edu