Unfortunately, honesty does not hold the same value in business life as it once did. Whether one is a salaried professional manager or the owner of a company, every individual carries significant risks in business. The business world does not tolerate uncertainty. If your financial relationships rely solely on trust and the goodwill of the other party, you are making a mistake. When things go wrong, you will likely be the first person they sacrifice. For example, assume you have a long-standing distributor with whom you operate on an open-account basis. When that distributor’s business begins to deteriorate, the first relationship they will abandon is yours; they will stop paying you first. From their perspective, you represent the least risky obligation. They will prioritize checks, loan payments, credit card debts, rent, and delay your open account as long as possible. Naturally, they rank their debts from most to least risky. If you were in their position, would you behave any differently?
Business life does not, unfortunately, accommodate good intentions. Keep your goodwill for your private life; in business, move forward by taking precautions.
Planning ahead provides comfort. It is well known that American businesspeople consult their lawyers and accountants at every step.
- When money is involved, many people—especially those in commerce—are unpredictable.
- They say circumstances have changed and withdraw from commitments; they reinterpret promises according to new conditions.
- When losing you no longer matters to them, they may lie straight to your face. They soften or distort earlier statements and begin manipulating emotions.
- If you respond too firmly, they may escalate the conflict, attempt to portray you as the guilty party, and use silence or avoidance to evade their obligations.
The more trust-based your business decisions are, the higher the probability of making a critical mistake. Leave trust to your personal life; build your business decisions on the assumption of unpredictability.
That article comes from the experiments we have conducted over the years.
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