It is difficult to balance competing interests, yet business leaders must do so at various times. We need to maximize profits, yet stay within the law and ethical bounds to do so, or appeal to different groups of people or groups with a consistent message. Those who cannot handle this well, risk being thought of as dishonest, unprincipled or untrustworthy. The question is how to handle these situations in the most appropriate way. Usually, the answer lies in approaching the people involved with honesty and a well-thought-out solution.
Let’s consider a couple of typical business situations.
- As the CEO, you promised bonuses to your staff if they met their objectives. Unfortunately, you did not include the caveat that this was also dependent on the company’s profit, and now, you have little profit but staff who met their personal objectives. Your choices are to admit you forgot to clarify those bonuses were dependent on being profitable and that you can’t pay out the bonuses. Or pay the bonuses at the risk of being unprofitable and violating commitments to the bank and its shareholders.
- As a sales rep, you promised your client a certain price and service date, which cannot be kept do circumstances beyond your control.
How do you find balance between your initial promises and your new reality?
In the first scenario, you could offer to make up for this when the company regains profitability, hoping this would be accepted by most of the staff. Sometimes, an honest mea culpa goes a long way. And in the meantime, you could look into no- or low-cost moral-boosting options to keep your staff in the game.
For the second scenario, you could lose the order if you were seen as duplicitous. But providing your client with an honest explanation of how this occurred, along with a reasonable incentive on their next order, might save the day and even put you in good stead for future business.