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The Ethics Coach on Dealing With Backstabbing

Do you have an ethical dilemma?
Write to The Ethics Coach at ethics@entrepreneur.com.

Q: How do you deal with a person who moves in on your clients or opportunities after you invited him into your inner circle? Worst of all, he did it by bad-mouthing me.

A: That's the danger of giving a potential competitor a seat at your table before you know how he or she actually does business. Inviting this person into your "inner circle" implicitly validated him to your group. Sounds like he interpreted your sponsorship as routine networking, with no loyalty owed--and that he saw your clients and prospects as fair game, with smack talk as his go-to marketing strategy.

Call out the bad seed on his actions, and make it clear that you expect him to stop. Explain that by bad-mouthing you, he has lost your trust. But the conversation has to go two ways: Listen to his response, and decide if it's worth it to you to keep the relationship going.

Meanwhile, consider telling your clients that you understand somebody has been going after your work by trying to undermine your relationships. Make it clear that you appreciate their business. If they raise questions based on the bad-mouthing, address their concerns--professionally. Otherwise, keep building your reputation by delivering quality work and exceeding clients' expectations.

Use the experience to think about what triggered you to trust the person in question and how you can keep things from similarly going off the rails in the future. Before opening up to others in your field, you may need to do more research (such as talking with references) about the way they conduct business, whether they value other people's interests or just their own, if they accept responsibility or blame others and how they treat others in competitive or collaborative situations.

And, of course, you should work with your inner circle to keep this from ever happening again. Encourage discussion about ways to vet future prospects for the group so that you understand their values and operating style before they take a seat at the table.

Aghast at an admission
Q: At a pre-conference drinks gathering with competitors, one guy admitted that he pays his legal labor workers $16 per hour but documents that he pays them $11. He said (with a wink): "Sometimes you gotta take extra-good care of your employees so they don't
leave you for another job." How would you handle this situation?

A: It's pretty surprising when someone not only admits to but also boasts about unethical or illegal behavior. Knowing what to say right in the moment is definitely a challenge. That's why Babson College professor Mary Gentile wrote Giving Voice to Values: How to Speak Your Mind When You Know What's Right, which offers tools that make it easier to speak out in difficult situations.

Since the conversational moment has already passed, Gentile suggests thinking about what you might have said to have an impact on the conversation--essentially, use that experience to practice for future tough talks. For example, you might have asked if the contractor realized he has an unfair advantage over those who do follow the rules. Or whether he recognizes that he's cheating employees out of future earnings, since his practice could reduce the amount they collect from social security. If you run into the contractor again, you could tell him that his comments raised a lot of questions for you; ask him if he ever thinks about those issues or if he understands that his actions could chip away at the industry's reputation.

Even if you do speak up, the cheat might not change his ways. But by saying something, you offer those in the group another perspective and the understanding that not everyone agrees with his behavior. Want to go beyond talk therapy? Read the code of conduct for your industry's professional association to see how it handles ethics violations.

Gael O'Brien is publisher of The Week In Ethics and founder of coaching/consulting firm Strategic Opportunities Group.

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the July 2013 print edition of Entrepreneur with the headline: Didn't See That Coming.

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