Putting Business On The Right Track

Deal-making shouldn’t just be about self-interest. Trust and respect need to play a role too.

The speed of business keeps getting faster and faster. If you think of it as a passenger train, improvements in the efficiency of deal making have turned a clunky old steam engine into a blazing bullet train.

There have been technological improvements that allow agreements to be generated, disseminated, and negotiated at high speed; there is the increasing trend of outsourcing transactional work to developing economies; and there has been the evolution of specialized advisory services to assist in closing deals.

I fear, though, that with the recession we’ve just been through, the train has pulled out of the station short one traveler. Our values – our trust and respect for each other – have been left behind.

Over the course of this recession, I’ve noticed some disturbing trends and disconcerting changes in the way business is being done. It appears to me that, either out of fear and self-protection, or greed and exploitation, some people have been behaving in a far less than flattering fashion.

Fifty years ago, deals were made with a handshake. Now, to get even a small deal done, you need a tome of an agreement that attempts to account for every contingency.

I’m not advocating a return to imaginary good old days; I realize that there was a cost to uncertainty. But there must be a balance. Anyone who tries to legislate against every eventuality finds him or herself with either an unworkable document or an unrealized deal – or both. That is a cost of compromised trust.

Deal-making should be about creating win-win situations, about striving for common goals. To do that, you need a foundation that goes beyond ironclad agreements and self-serving, aggressive tactics. You need an element of commercial reality that is implicit in any agreement.

Trust and respect have intrinsic value, but you can be utilitarian about them, too. The business community in this country is small. Where there is little anonymity, actions have consequences. And as has been revealed dramatically over the past couple of years, economic strength and weakness are ephemeral. The weakness that you exploit today can return to exploit you from a position of power tomorrow.

What’s more, where there is trust, more good deals get done, and that’s good for growth. The consideration of long-term consequences will earn the trust and respect that will benefit all in the long-run. This is why I’m a believer in the message of Suzy Welch’s book, 10-10-10. No matter how complicated a decision is, three questions need to be answered: What are the consequences of my actions in 10 minutes? What are the consequences in 10 months? What are they in 10 years?

It is in times like these, when growth is uncertain and the landscape has changed, that rash decisions get made and reputations, both good and bad, get forged. And it is in times like these that institutional values are either reinforced or jettisoned. We have an opportunity now to reconsider the long-term value of trust and respect, to re-establish and re-internalize these assets at the foundation of the business community.

Ten years from now, when we look back at 2010, let’s look back with the knowledge that we took the right track, that we took the long view and achieved our long-term goals. Let’s keep our most important passengers on the train.