A smart and thoughtful reader Ashton recently sent me this email which really got my brain going:
"I’m interested in perspectives on how to deal with people who do not act in good faith and lie, cheat, steal, and take advantage of others in business. I’ve had a few people come through in my professional life in the last year who could be described one way or another in this fashion. And, I know there will be more. One of my top professional and personal goals in my life is to maintain my integrity. I have realized that one of the biggest risks to me is not missing out on a large sum of money, or fame, or anything like that–but lying on my death bed someday and looking back knowing that I did not act in good faith towards others.
The difficulty is, others are out for short term gain, they go back on their words, they rationalize, and they inch towards poor behavior without realizing they’ve gone a mile. When my interaction with these kinds of people finally comes to a head–I generally look back and see that there were a million red flags waving that I could have seen earlier. I feel now that I want to limit my interaction with people like this in life as much as I can from the outset. They are a waste of energy, time, and money.
In your experience with many entrepreneurs and business people, grand and small, have you, yourself learned, or have you come across people who have successfully learned, how to sniff out those who would take advantage of them and remove them from their lives or business dealings? Have you found any tips yourself, or through these people, which might help someone like myself hone this ability? I don’t feel any of the people who would trespass upon my trust can ever really do me in, but man are they a pain in the arse and I would love to be good at keeping them at bay."
Well, Ashton, I certainly have had my run-ins with the "integrity challenged" (the most polite term I could think to use in this PG-13 environment) in my personal life and my business, and have come up with some general guidelines to both sniff them out before they do harm, or to get rid of them as soon as they show their true colors.
First, it may be useful to qualify the types of hucksters you may come across in your business dealings, especially when you are forging new frontiers as an entrepreneur:
- Make a million bucks in one month with no effort marketers. They can usually be spotted by marketing and advertising language laden with hype like "so easy a 3-year old could do it!" "no experience required!" and "super secret formula for success only available to YOU!" If what they are offering is truly a great way to make money with no strings attached, everyone would be investing their money with them.
- Unscrupulous business partners. These can be much more tricky to detect, as some start out seeming to be nice, reputable business people. But, as time goes on, slime begins to ooze from the side of their mouth. They can do things like "forget" agreements about poaching customers, flake on responsibilities and try to blame it on you, or, in the worst case, run away with money without completing work.
- Slippery customers. We tend to look at all customers as allies, right? But some have no intention of acting honorable, and do everything they can to take unfair advantage of money-back guarantees, accuse you of shoddy service or products in an attempt to get a discount, or try to muddy your reputation with other customers as a threat. Mind you, this is very different than legitimate customers who truly don’t find value in what you offer, or who are mistreated by you in some way. They deserve full sympathy and refunds. The "integrity challenged" ones know that what you offer is high quality, they just don’t want to pay for it.
- Flakey vendors and suppliers. These folks will produce everything late, not take responsibility for mistakes, disappear from contact just when you need them the most, and claim nothing is their fault.
- Online, anonymous slanderous meanies and trolls. Perhaps the
most frustrating and slippery creatures of all, these folks prefer
"slash and run" techniques, where they attempt to inflict as much
personal anguish on you as possible, in as public a forum as possible,
then slip into the night undetected, leaving you and your reputation
bruised and bloody.
- Observe them for a long time before letting them into your "circle of trust." (If you have seen "Meet the Fockers," you may crack up at that term, but you know what I mean) I got some awesome advice on this from an elder capoeira master when I was in the midst of a particularly messy situation in my martial arts days. For those of you who are unfamiliar, the world of martial arts can be a very political and backstabbing environment, with teachers trying to take each other’s students, challenge each other’s styles, etc. I asked this elder master how he survived so many years in such a contentious environment, and he told me "On the surface, show the same, smiling face to everyone. But behind your external mask, closely watch the person to see how he interacts with others. Is he nice to you, but rude to those around him? How does he treat his mother? Take a very long time to observe how someone truly behaves, not how they say they behave, before you really open yourself up to them." This rule can apply to people that you hire to coach or teach you, programs you invest in, or joint venture partners that you do projects with.
- Discuss, clarify and document expectations and agreements. If you are going into a business partnership with someone, it is very important to discuss every aspect of that partnership. What are expectations for sharing money? How will you interact with clients? How will you decide ownership of intellectual property? What are common values that you have in your work? What will you do if the partnership doesn’t work out for either person? The more you discuss and document these things up front, the easier it will be to resolve problems in the future.
- Do your background research. Talk to prior partners, customers or contacts to get feedback on their experience with the person or company. If you are researching a vendor, check for complaints with the Better Business Bureau or its equivalent for those of you non-U.S. folks. I have had my personal "hunch" of trusting someone proved dramatically wrong in a few cases where I did NOT check references against my better judgment. The worst case was the birthing coach who simply disappeared (with my $150 deposit) as soon as I went into labor with my son, never to be seen again.
- For big, important partnerships or really sticky situations, consult with a lawyer. I don’t like that our society has become hyper-litigious. But there are a lot of good reasons to consult with an ethical lawyer, so that you protect your assets, intellectual property and reputation. In the case of the damage inflicted by the meanies and anonymous trolls, you must know your rights, and the appropriate course of action to protect your reputation.
- When you see unethical behavior, cut the ties fast. Don’t wait for the person to do more damage just because you are in the middle of a project. It may be painful if you have to replace a key resource while you are busy, but it is better than letting a toxic person stir up more trouble. If it is an unethical customer, have a polite conversation, end the relationship and drop a refund check in the mail. Some of you may disagree with me, but I would rather pay someone in full to close the door on future negotiations and litigation, even if I know I am right, than fight with them over contracts or dollars.
- Pay by credit card, not cash or check. I learned this the hard way when a custom furniture maker (who had created other pieces for me in the past) closed up his shop overnight and took off with $4,000 of my hard-earned cash. I had paid by check, which gave me no legal recourse. If I had paid with a major credit card, the credit card company could have refunded my money in full. That was a very painful lesson, and I felt like a fool. Learn from my mistake!
- Do not stoop to bad behavior yourself, no matter how much someone provokes you. No situation makes you want to lash out more than when someone is rude or slanderous in person or online. But the very worst thing you can do is to respond with your own tirade of bad words and accusations. Take the high road and hold your tongue, as much for your dignity as for your protection. Words spoken in public settings in the heat of angry passion will come back to haunt you. If you need to let things rip, do so when you are alone in the car and tell this person exactly what you think of him.
- When people show you who they are, believe them. It is good to be optimistic and trusting by nature, and to believe that people can change for the better. But if someone keeps repeating unethical behavior or doing things you don’t agree with, trust your instinct and take action. We often second guess ourselves too much, and end up in very messy and uncomfortable situations because we want to avoid conflict.
- When they are gone, learn the lesson and let go of the emotion. You can drive yourself crazy analyzing why you wrote a check for $4,000 to a shifty furniture salesman, or trusted a birth coach at face value without checking references, or allowed a slimy business partner to run away with your best customers. (OK, maybe those are my problems – I am sure you have your own!) This angst will eat you up if you let it and make you afraid to ever trust anyone again. Instead, look for the lesson and realize that their bad behavior or karma will catch up to them at some point. Then move on with your life. Don’t give away more of your life force by dwelling on their bad energy.
I am sure some of you have had some hairy situations with unethical people (or at least I hope I am not the only one!) What other advice would you offer Ashton?