Have you ever thought about the difference between a “promise” and a “guarantee?”
I first heard this distinction articulated by violence prevention expert Gaven DeBecker, who specializes in empowering individuals to protect themselves. It turns out that the distinction he makes is surprisingly relevant to anyone in business because hiring and firing people is such a central part of our jobs.
“A guarantee,” explains DeBecker “is a promise that offers some compensation if the speaker fails to deliver; he commits to make it all right again if things don’t go as he said they would.” But, DeBecker argues, “promises offer no such collateral.” “Promises are used to convince us of an intention [to follow through on a commitment], but they are not guarantees [that one will be compensated if there is a failure to deliver on the promise].”
Makes sense, right? So why are we as business owners so often reluctant to insist on guarantees instead of promises when we first hire someone?
Be honest, how often do you hire someone mostly because you like them, go on to make a deal on a handshake and then assume it’ll all work out?
The appeal of this “empty promise” approach is that it allows us not to have to think about what might go wrong (until it’s too late of course). It can be a very uncomfortable experience to insist on guarantees from vendors. Guarantees force you to acknowledge how you’re going to address a potentially negative outcome in the future, and to do it right now, while the new relationship is still feeling positive.
Just like with a marriage prenup, this can make you seem pessimistic about your future together and it can even feel almost like an insult because you are acknowledging you don’t entirely trust the other person.
But the reality is, uncomfortable truth or not, you should not trust any person who offers you merely a promise and not a guarantee.
I’ve suffered the result of these kinds of leaps of faith too many times as a business owner. This is something I came to realize recently while noticing how smoothly things are running at The BIZ, largely because of systems we have put in place to minimize vendor problems by replacing promises with guarantees.
I like to think of these accountability-in-hiring systems as “business prenups.”
These are some of the protective contingencies we always put in place at The BIZ BEFORE we get “married” to any new hire and/or vendor.
- We hire on a trial basis.
- We maintain other relationships so as not to get stuck with one option that doesn’t pan out.
- We use contracts.
- We hold 50% of payment until after approval of delivered materials or services.
- We track communications in emails so that distorted memories can’t create confusion.
Bottom line: every business should have a “business prenup” in place whenever goods or services are exchanged.
No exceptions.
Promises without enforcement jeopardize your business’s finances, legal protection and effectiveness. It’s just not worth it. And any truly professional vendor will respect you more for laying out the ground rules in advance.
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We love our hiring systems at The BIZ, but each affiliate owner needs to find his or her own unique way to negotiate business relationships within these guidelines.
Meghan, Chris and Tim have all taken our tools, run with them and come up with variations that work best for their individual boxes. To get the benefit of these three Subject Matter Experts’ perspectives, make sure to go ALL IN with the BIZ Tribe by next Friday, December 14th.
Click here.
