Every day we read or hear about a person or a business that has been caught trying to get ahead by applying less-than-honest tactics. One of the latest stories revolves around Volkswagen, whose diesel car engines were rigged to alter their characteristics during fuel emission tests. As a result, the cars were declared much more fuel-efficient and eco-friendly than they actually are.

While your reaction to such a story may be, “Did they really think they could get away with that?” the more important question is, “Why did the company feel that being dishonest was acceptable?”

We typically hear about cheaters and scofflaws in the business world on the sales or marketing side. Things such as false claims being made about what results a product or service will provide. The used car is advertised as “clean” when, in fact, it was recently pulled from a flooded area ravaged by storms. The new pharmaceutical promises relief, or better yet a cure, for a common condition, but in reality the side effects are potentially more serious than the original malady. Today’s consumers are armed with more information, more customer feedback, and more testing data than ever before, giving us the best chance of sniffing out a scam or misleading claim. But why should we have to?

In a TED Talk a couple years ago, Marcus Sheridan shared the story of his pool company. In the midst of the U.S. financial crisis, the company changed its marketing strategy to “answering all the questions they had heard from customers over the years regarding fiberglass pools.” Good or bad, they put the information on their website, which became the most visited in their industry and the subject of a New York TimesBusiness Section article. Sheridan also challenged the tradition of the KFC secret recipe and the “secret sauce” on a McDonald’s Big Mac, and it paid off. From a marketing perspective, being what he terms a “teacher” as opposed to a “truth hoarder” makes a lot of sense. When straightforward information is offered in an upfront manner, without the need for interrogation, people notice.

For every aspect of your business—from your sales and marketing strategy, to interactions with customers, to how you treat and evaluate your employees, and how you deal with suppliers and subcontractors—honesty really is the best policy. But not just situational honesty. Rather, a mindset of proactive honesty. 

Let’s take this idea into all areas of your business.

If your technician scrapes the company truck on a customer’s mailbox while backing out of her driveway, will they stop and say something to the customer, making sure to include, “…and we’ll take care of it right away”? Will they then voluntarily go to you or their supervisor and tell them what happened? If your business development rep. isn’t totally truthful about the sales calls and meetings they show on the weekly sales report they turn in, what else are they being less than honest about? Could there be a valid reason why any of your employees would be less than 100 percent open and honest with a customer?

As the business owner, you reveal your commitment to honesty when you pay your company’s bills and your employees on time, when you file taxes, and when you make commitments to your customers.  Honest business practices inspire both your staff and customers with respect for your mission. What we’re talking about here goes well beyond not lying to your customers or your employees; it’s being actively honest. It’s owning a mistake when you mess up and admitting when you are wrong. It requires acknowledging the state of your business to your employees and only selling to your customers what you can deliver effectively.

Honest business practices also require the ability to make tough decisions. While we can all agree that we want all of our employees to be honest all of the time, your commitment to honesty will be tested by the behavior of your people.

Are you willing to terminate a high-performing, long-term employee who fails to be honest with you? How serious an issue must be involved before you are willing to take that step? In a recent discussion with a client regarding just such a situation, the owner said, “If [the employee] is dishonest with me regarding this relatively minor issue and, when confronted, refuses to admit the lie, I will forever have the question in my mind about whether he is being totally honest with me. I cannot accept that in my business.” This commitment to integrity will pay huge dividends in the long run regarding the culture that exists within the organization and the character of the employees the organization is able to attract and retain. The alternative is a slippery slope where acceptance of minor less-than-complete-truths can lead to a pattern of fudging that threatens the credibility of the owner and the business.

Expecting complete honesty from yourself and all of your employees all of the time is a recipe for a brand that is highly valued, a workplace that quality employees seek out, and a culture that thrives on teamwork and commitment. Having an honest business means you are dedicated to providing an honest service by an honest company in an honest way. No shortcuts.