Profit vs. People - Ethical Business

Anchor Group Podcast Episode: 20

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• Caleb Schmitz, CRO at Anchor Group
• Anchor Group (Company Page)
• Evan Sturman, Medical Innovations

Podcast Transcript

Caleb (00:00)

On episode 20 of our podcast today, I bring on Evan, a NetSuite customer, and we're going to talk about something a little bit different in the thought leadership space: ethical entrepreneurship. We’ll share our perspectives on what it's like managing employees and how to create a business that’s best for them—and ultimately more profitable. We have a general conversation on the topic that I think you’ll enjoy.

Caleb (00:31)

I was really curious about your perspective. You and I have touched on this briefly before, but ethical entrepreneurship is a broad topic. I wanted to talk out loud about what it means for different people in different industries. You’re in the product space, I’m in the services space, and I’m sure there are differences in perspective between industries. I’m curious to pick your brain—how do you think about ethical entrepreneurship?

Evan (01:09)

I’m sure every person’s definition is different, but for me, ethical entrepreneurship is the pursuit of not only a good product or service, but also treating your employees well—whether they’re employees, partners, or whoever. Treating them like people builds long-term goodwill and trust, which leads to a healthier, more sustainable business.

We’ve all seen news stories about companies where employees are overworked, underpaid, and exploited—Amazon workers having to pee in bottles to meet quotas, for example. That’s not sustainable long-term. You also see situations where a company is taken over by an investor, changes are made for short-term gain but long-term loss. They cut service and quality, strip resources, sell, and leave the company in shambles.

Ethical entrepreneurship, to me, is about sustainable, healthy growth and business management that leads to a stronger company.

Caleb (03:17)

I think that covers most of what I think about, too. There are also companies like Tom’s Shoes, who look beyond employees and focus on the social good they can do—poverty, the environment, community initiatives. In the product space, sourcing decisions play into this as well, especially in industries like apparel.

I’m mostly focused on creating a good culture and environment for employees. I’m not an owner, but I think a lot about how to foster healthy relationships and treat people well.

Evan (04:32)

The people who’ve most inspired me are my parents. My father started our business in 1996 and always treated employees like people. It sounds like common sense, but you don’t see it often—especially as companies grow. Larger businesses tend to cut costs and become so corporate that employees are treated as numbers.

If something happens in your personal life, a rigid company might still expect you to come in because “you’re on the schedule.” That’s not treating people like humans. Common decency goes a long way in building healthy company culture and employee trust.

Caleb (05:49)

I’ve learned a lot about treating people well from being a parent. Raising a child shows you pure emotions—they’re not at the age of reason yet. Adults still have those raw emotions, even if they can reason on top of them.

Paying attention to people’s feelings and emotions—addressing them instead of plowing through to get what I want—has been foundational for me. Sometimes the same skills I use with my child apply to working with adults, not in a demeaning way, but in acknowledging those raw emotions.

Evan (07:14)

It’s basic decency, but it also helps employees feel they’re with the company, not against it. I had an employee whose work suddenly slipped after a year of strong performance. Instead of coming at them with accusations, I asked what was going on. Turned out they were going through personal struggles. I encouraged them to take time if needed.

That approach builds goodwill and healthier culture. People want to work here. Our warehouse manager has been with us 27 years, and our most recent warehouse hire has been here almost three years—unheard of in the corporate world where turnover is constant.

Caleb (09:08)

Are there certain things you do that contribute to that? Events, personal touchpoints, open communication?

Evan (09:49)

We work remotely, but even as a small company doing big business for our size, we emphasize work-life balance. If someone takes vacation, I respect that. The only person I expect to work on vacation is me. I’ve built my team so I can step away knowing they can operate without me.

Treating employees well isn’t just kindness—it’s effective. When people feel valued, they speak up and contribute more. In larger companies, it’s harder because of size, but much of unethical entrepreneurship comes from the relentless pursuit of profit at the expense of people.

You can afford to reduce profit slightly if it means your company will be healthier in 10 years. Costco is a great example—employees are treated well, paid well, and it’s a sought-after place to work. Ethical entrepreneurship is treating employees and customers right for long-term sustainable growth.

Caleb (12:46)

What about policies? As you grow, you have to create policies that work for the average employee. You can’t have exceptions for every possible situation. I think the greatest challenge in growing as an organization is creating policies that are best for the average person—not just in an idealistic way, but with the person in mind. That’s subjective because, in a sense, you’re deciding what’s best for the average person within the organization. I’ve found that to be a tricky aspect of policy creation.

Evan (13:42)

Nothing is completely black and white. If someone’s work slips and they make a mistake, you have to consider their overall work history, the severity of the mistake, and how often it happens. I always say something is only a mistake if it happens twice.

If someone makes a $10,000 mistake, odds are they’ll be hyper-vigilant to never make it again. The important thing is to ask: why did this happen, how can we avoid it, and will it happen again?

Caleb (14:48)

When it comes to policies, I think it’s important to do postmortems whenever something doesn’t go well. I also make sure leadership at all levels has the authority to make reasonable exceptions when necessary. They need opportunities—even with less important policies—to practice making sound business decisions.

Here’s an example. My father-in-law worked at a bank for many years and was always on time. One day, he forgot to clock in because he was talking to his boss for the first 10 minutes of the day. When he realized, he clocked in, but the record showed him as late. He was written up for it—even though he was talking to his manager at the time. That’s incredibly frustrating and, to me, an example of an unethical practice. Managers need the discretion to apply reason in those situations.

Evan (16:53)

I agree. If someone consistently does everything they can to be a good employee and then gets reprimanded unfairly, it’s disheartening. Employees are human. A lot of modern workplace issues come from not treating employees like humans and instead chasing pure profit. Yes, profit is the goal of any business, but you can sacrifice a little of it to improve quality of life.

Caleb (17:47)

Exactly—you’re willing to shave off a few points of profit margin if it means having a happy employee base. It’s well worth it.

Evan (17:55)

Absolutely. I believe a happy employee base will lead to more profit over time. People who want to be there will be more invested in the company. The same principle applies to customers—treat them well, and you’ll have loyalty. Unfortunately, with large competitors, customers often feel like just a number, and that doesn’t inspire loyalty. The same way a mistreated employee might want to leave, a mistreated customer won’t want to return.

Caleb (19:24)

There are clear business reasons to do this beyond it just being the right thing to do. In our industry, training a new hire can cost $20,000–$50,000. Any turnover wipes out profit margins, so retention is critical. In a high-skill, technical field, training is ongoing. Without good retention, you lose profitability fast.

Evan (20:33)

It’s similar for us. I believe we have the best warehouse team in our industry for a company our size. We pay above market rate and moved to a four-day work week during COVID—and never went back. They work fewer total hours but get the same amount done, more efficiently. They love the schedule, and it makes us more competitive when hiring.

Caleb (21:32)

That’s really interesting. When I worked in manufacturing, it was the opposite.

Evan (21:32)

Fridays are typically slow for us, so it made sense. Our remote employees still work Monday to Friday, but on-site staff benefit from the four-day week. Good pay and good benefits bring good employees, and that leads to better business. People are more invested in the health of the company.

Caleb (22:34)

Beyond pay and benefits, how do you foster culture? Do you encourage playfulness and joking around?

Evan (22:47)

Of course. I send memes to employees sometimes—often relevant to whatever situation we’re dealing with, like a difficult vendor. It lightens the mood. There’s a time and a place for corporate talk, but you also need those lighter moments.

I also stress that just because we’re doing something a certain way doesn’t mean it’s the best way. Our processes are constantly evolving. When I started, I questioned why certain things were done the way they were, found better ways, and made changes. I want my employees to feel comfortable doing the same.

If everything stems from one person, that’s not healthy. The company should never be reliant on a single individual.

Caleb (24:54)

It sounds like you allow everyone to have a voice and you constantly remind them they can share creative ideas to make things better. And I wouldn’t underestimate the value of being playful—playful in a professional, fun way. I think it really helps.

Evan (25:18)

I think “relaxed” is the better term.

Caleb (25:23)

Yes—being able to joke and make the workplace enjoyable makes a huge difference. Without that, pay and benefits only go so far. A relaxed environment where you can work hard, get the job done, have fun, and be surrounded by high-character people might even be more important. Combined with good pay and benefits, it creates a great ethical place to work.

Evan (25:56)

Exactly. And being able to have a voice is key. I have a friend at a large company whose boss isn’t pleasant. He came up with a great idea, got it approved, kept his boss informed, and implemented it—only to be reprimanded for going over their head. What do you think that did to his motivation? He’ll never do that again. Ideas can’t always come from the top.

Caleb (26:37)

I’d argue they shouldn’t.

Evan (26:38)

Exactly. The people on the ground see things leadership can’t. When I visit our warehouse, I ask, “How’s everything going? Is there anything that needs to be done differently?” One time they suggested moving some unused shelves to create more space for receiving. I wouldn’t have known to do that because I’m not packing boxes every day anymore. That insight came from them.

Caleb (27:26)

If you reprimand people for taking initiative, you suppress creativity and prevent them from gaining experience implementing ideas. Then improvements will always rely on you instead of being delegated over time. My favorite part of my job has been having almost zero red tape.

Evan (28:25)

I agree. I don’t think I could work in a big corporate environment with heavy bureaucracy. I’ve always had the freedom to pursue what needs to be done. If you stay stagnant, you die. We’re constantly iterating, doing A/B testing, trying new things. In today’s environment, if you don’t, you won’t survive.

Caleb (29:10)

True for business—and life. I like keeping these ideas top of mind and exploring how to do even better for employees within our means. Conversations like this reinforce those values. I appreciate hearing your thoughts. I love what you’re doing at Medical Innovations and think you’ll continue to thrive.

Evan (29:46)

Thank you. I’ll wrap it up by asking: do you want your business to be a flash in the pan, or do you want it to leave a legacy? Pursuing ethical entrepreneurship is the way to build something lasting.

Caleb (30:19)

Well said—legacy. Thanks, Evan. I appreciate you coming back on to talk about entrepreneurship. It was fun chatting again.

Where to Listen to the Podcast

Find more episodes of the Anchor Group podcast!

• Anchor Group Podcast on Spotify
• Anchor Group Podcast on YouTube

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