We compared experiences of dealing with key issues such as payment schedules and invoice chasing, as well as deal making, general work, and contract fulfillment in general.
They, alongside many other small business owners I have met recently, have also noticed several things which seem to be happening more than in the recent past, with regard to running their small business:
1) Contracts are being regarded as optional. Once signed, people are increasingly behaving as if the terms were somehow voluntary, not required
2) The notion of the “spirit” of the agreement along with the “letter” is also out the window in terms of how customers (large companies in particular) are behaving
3) Payment terms have become 60-90 days as standard, despite agreements to stick to 14 or 30 day cycles
4) It’s not just large companies: Small NGOs and large international non-profit groups have also torn up agreements and begun behaving in ways unseen in the past, completely unexpectedly
Why is this happening? I, and my friends who also run small businesses, accept fully that we are not perfect, but unless we are all lying to each other about every incidence, the ‘fault’ cannot simply lie with us.
Small business owners, like cab drivers, love a good moan about how times are tough. That’s par for the course, partly because even when you have cash in the bank, you are not sure if you still will in three months or six months time.
But despite the caveats of standard SME whinging and the odd mistake with customers, there’s a worrying trend here, as I see it.
As we get used to tougher economic times in the last five years, it seems to be becoming more acceptable to behave badly and act in the American traditional MBA style of “winning partly due to the other guy losing”.
This concerns me deeply. We’ve all seen research saying people become less ethical in more difficult times.
Partly this may be because they feel they have to think of themselves, their jobs and their families first. So they lose perspective on the bigger picture, the “what goes around comes around”, longer term, karma paradigm.
But I do think we need to remind ourselves that no matter what the pressure is that we feel (and in the SME community we feel it most!), we need to stand up for what we believe in.
I’ve cancelled arrangements with a few organisations that behaved badly in recent times. It has cost me money, but it was the right thing to do.
No one writing this kind of post should claim to be perfect, as I certainly would not, yet I feel both compelled and uncomfortable to suggest that a call to support the basic sanctity of contracts and agreements is something we should all make a commitment to.
That feels like a fairly weak call to action to me. But as a first step goes, it seems some out there need to take heed.
Look forward to comments on the blog or via email. (just hit reply if you are one of the 1500 on the email list)
(Now of course, I’ve said that, I expect none, in keeping with the blogger’s curse: ask for comments, and get none… 🙂