Understand and address work-life conflict of interest scenarios.
Help your brain Better manage competing needs in your business
When you are leading a business the potential for conflicts of interest arise all of the time.
A conflict of interest can be a top down scenario but it can also happen at any vertical throughout a business, across multiple businesses and between business and personal interests.
By our very nature we humans experience inherent perception biases that can compete against the objective needs of other people and our business, wielding influence sometimes at an unconscious level. Frequently this bias is difficult to clearly grasp conscious hold of.
The danger of not clearly seeing bias that holds influence is that ultimately decisions and actions may not be thoroughly well considered and we may not understand what has impacted outcomes.
There are times in life and business when a conflict of interest tips the scales in favour of a choice that may ultimately be at odds with a personal, professional or business need.
What is a Conflict of Interest?
We are most familiar with the issue of a conflict of interest that affords an individual an opportunity for a personal benefit that comes at a cost to the organization or business (or in the case of government and politicians at a cost to the citizenry).
Conflict of Interest can also apply to the benefit a business can derive at the cost of a personal loss.
The definition of “Conflict of Interest” varies but generally it refers the situation where one’s own personal or professional interests are being advanced at the expense of another persons or entities interests. A conflict of interest may arise when a professional judgement is unduly corrupted or influenced by the need or preference of a secondary interest.
At a basic level having a stake in two different things has the potential to lead to a conflict of interest scenario and for most people we have stakes in many more than two different things.
Where Are Your Conflicts Of Interest?
Within your business making decisions that impact personnel, vendor or supplier choices, purchases, projects and more all have the potential to butt up against competing needs that can influence recommendations, negotiations and ultimately the success and viability of your business.
Consider where your business conflicts of interest may arise to begin the process of gaining the upper hand on conflicts:
- Personnel decisions especially where personal relationships exist
- Selecting vendors and/or purchasing products and services
- Financial and budget plans and decisions
- Where employees are involved in any planning or decision making tied to any of the above
- When your have involvement or ownership of multiple businesses including those with either competing or non-competing business focus.
- Within your personal life including health, friends and family relationships
Consider the conflict of interest that exists when you have to make a financial decision to purchase materials from one supplier over another where one supplier is a personal friend but whose product is inferior or less cost effective.
By choosing the supplier who is a friend the implications for the business could include a business loss. That may be a risk you are willing to take but without considering the full range of implications your personal bias may have more sway compared to your business savvy.
Conflicts of interest frequently mashup against personal and family life. The decision to hire a family member is common. Consider the conflict that can arise when you make a financial decision to take money out of the business for a personal matter. As the business owner you may make that choice but the cost could impact people outside your business.
It can be important to consider that being in a conflict of interest position itself does not imply any wrongdoing. A conflict of interest is simply a position that can occur when there may be multiple competing needs.
A conflict of interest only becomes a potential problem if and when it influences you to put the gain of one competing need above the other need where that decision may negatively impact one need at the expense of another and where the implication of this bias is not clearly considered.
If you are a small business owner or leader it is vitally important that you own your biases and consider their impact throughout your planning and decision making processes so can maximize your opportunity to make consistently balanced and well considered choices.
5 Steps To Manage Your Conflict Of Interest Scenarios
The decision making process is complex and personal bias and perceptions can never be completely removed from decisions made by people.
People use information at their disposal to make judgements and decisions. It is difficult to keep our personal biases out of decision-making because our preferences are skewed towards our own gain.
1) Take steps to be aware of your personal bias in important decision-making situations.
Consider how you are balancing your personal gain (including the gain of a person in a relationship with you) against the needs, risks and benefits of your business.
2) Talk to others involved in and close to a situation and ask for their perception of the potential conflict of interests.
Listen to their viewpoint and take it into consideration during your decision making process
3) Disclose potential conflicts of interest to those with an interest in the process and outcome.
This can also help them understand, consider and address the biases in the situation
4) Identify and consciously weigh competing gains and costs at various stages of the decision making process.
5) Educate others involved in your business on potential conflicts of interest and include up-front conversations that address hidden bias and call out potential conflict of interest
You do not need to take yourself out of a conversation where a conflict of interest occurs or defer judgement.
Conflict of interest will almost always be present. The bottom line is that the more able you are to own your potential and real conflict of interests the better able you are to target outcomes that meet your goal for balanced planning and decision making.