Make Decisions in the Best Interest of the Business

“You very quickly come to realize that for the most part everyone really wants what’s in their best interest – employees want, customers want, investors want, board members want, friends and family want.” 

Employees, investors, vendors, consultants, and Board members all want something different, something specific to them. To unify these often-competing needs and perspectives, emphasize that decisions will be made in the best interest of the business.

By establishing this principle, you set criteria for decision-making that everyone understands, and is expected to share. This will serve you well in a variety of situations, including employee compensation, vendor negotiations, or internal conflicts such as disagreement between employees, necessary disciplinary actions, or employee complaints of unfair treatment.

Why is setting this standard necessary?

• Competing Priorities. During the initial phase of your entrepreneurial venture, there are many competing priorities. Your employees, vendors, customers, and investors also have different interests, and it is common to have these interests in competition at all stages of the business.
• You Lack Process and Resources. With more established businesses, however, existing policies and procedures, managed by a strong team, help to moderate these conflicts as part of the company process. You don’t have that luxury yet—or the time or the resources—to keep everyone’s interests in line all the time.
• People Feel Entitled. If you don’t make what seems obvious to you (making decisions based on what’s best for the business) clear to all, you may find your team and the other resources you interact with, developing an unhealthy sense of entitlement as your organization grows and your market presence increases.
• Perception of Unfair Decisions. You may make decisions that seem unfair to a party or seem to favor one party over another. And when there is no established, strongly identified principle, individuals feel their interests are not being met. But when you communicate a standard, you transform a set of assumptions (we all are acting in the best interest of the business) into an official statement, and if it’s implemented consistently, others will respect the principle even if they don’t agree with the final decision itself.
• You Build Trust. This builds trust over the long term. If you are true to this principle, it will also help you address negative behavior. For example: a vendor is looking for a long-term contract. An employee wants a guaranteed salary for the future. An investment advisor wants to get your business without bidding on it. All decisions are made based on what’s best for the business. This does not happen overnight, but if you apply it consistently, it will become standard operating procedure.
• You Show Leadership. Sometimes, there will be decisions that are personally detrimental but in the best interest of the business. In these situations, you still must choose to make decisions in the best interest of the business. Yes, you may take a personal hit, but these situations can be teachable moments for you and your team. When you choose your business over yourself, you reinforce a standard of fairness—rules apply to everyone.
• You Deal with Dedicated Employees. Think about employees who have worked tirelessly in the early stages of the business, but are not equipped to be the company’s future leaders. In these cases, you must make a tough choice between your responsibility to the business and your loyalty to an employee. It is your job to find a way to align their interests to the best interests of the business. This could take the form of rewarding early-stage employees with options that are maintained even if the employee leaves the company. You may say, “I can’t determine who is going to be the management team of the future, but at least if you are not a member of the team, you will be rewarded for your hard work.” As an alternative, you can align the employee to a role they desire and at the same time bring in team members that serve to advance the business in a way that the employee could not—as long as you aren’t acquiring additional costs for the wrong reasons.

You will not be able to please everyone. You will learn a lot about people and their motivations. Address your standard early and often so that all your resources understand that if they put their needs above your business’s best interest, they are not violating some idea you invented yesterday as an excuse or justification. They are violating a fundamental tenet of the business.