Honesty - Organizational Leadership in the Social Age, Part III

Honesty

Nobody likes to do business with a person they can’t trust, and make no mistake—your reputation, whether good or bad, will follow you in the age of blogs, Twitter and electronic social networking tools.  Be honest in all your transactions and create deals that are good for your partners as well as for you.  You may think you’re getting away with something in a particular transaction, but with so much information available on the internet, eventually any dishonesty on your part will be exposed, and possibly broadcast for all the world to see. This is a good reminder that honesty in business isn’t something we do because we’re afraid we’ll get caught; instead, honesty in business is just the right thing to do.

I read a contract recently, for example, about a transaction I was about to complete with a vendor. Because I knew something about the vendor’s technology, and the way it would operate in my environment, I realized I could take advantage of the vendor to my own benefit, based on the way the contract was written.

I had a choice—I could take advantage of what I knew to be a vendor mistake, which would probably lead to a damaged relationship, if not a legal battle. Or, I could point out the mistake to the vendor, avoid legal troubles, and preserve the relationship. Anyone could find information through a Google search that perhaps would have revealed the facts to this vendor, but that wasn’t the reason I decided to discuss my concerns with the vendor.   My primary motivation was to preserve the business relationship with this vendor as well as create a long-term partnership.  They were grateful that I pointed out the problem and realized they had a partner that they could trust.   Honesty is essential and more important than ever before to achieve successful business relationships in the Social Age.

In some ways, that type of decision is a good test of leadership. Great leaders look for long term gain, even if it means giving up a temporary advantage. The short-term advantage, when it is gained through dishonesty or deception, always leads to long term pain.

Creating a good relationship with vendors and suppliers is one measure of great leadership.  The vendor I mentioned above had no way to know the capabilities of the cloud technology I was using, which would allow me to take advantage of them. They were amazed and extremely grateful when I disclosed this information to give them a better reference point to create a new pricing structure.

You can’t measure the ROI of honesty; but needless to say this company calls me frequently. Many of the deals we’ve worked on together happened because of the mutual respect, and honesty that is the mark of our relationship.