Lessons Learned #27: On Friendships And Business

You have a good customer, a “true friend” in the construction world. You have cultivated the relationship, enjoy each other’s company on a personal level; attend sporting events, play golf or fish together, have dinner with your spouses. In return, your friend treats you well at bid time, you may even have “last look”, or right of refusal on most jobs you want. That’s the way it should be. You should work hard to develop good relationships with those whom you do business.

BUT (yes, there’s always a “but”, isn’t there) serious problems will arrive if you let your friendships interfere with sound business practice.

It may start with your failure to scrutinize the contracts and lead to ignoring the document altogether over time.  Or, you might begin by suggesting to your managers that they relax the way they administer the work; letting smaller issues go unreported, forgiving problems that may cost your company money in the desire to keep your good relationship going, not wishing to upset your friend.  You may even allow your “friend” to talk you into holding off on documenting larger issues, convincing you to trust him to resolving the problems soon, and that the situation will improve.

I have listed only a few of the ways that you might start abandoning good business practices in exchange for others that are influenced by your friendship with a good customer. While you might be able to proceed along that path for some time, eventually the day comes when the problems on one project blow up to the point where the damage cannot be covered or smoothed over by that great relationship.

At that point, all the good relationship capital in the world will not allow you to recover the damage caused from the mistakes you made, failing to do the things that were necessary.  Among them are adhering to prudent business practices for construction contracting that must be followed without exception:

  • Reviewing your contracts
  • Giving notice of problems
  • Demanding timely payment
  • Pressing for timely responses and approvals
  • Requesting changes for extra work and delays
  • Being careful not to release your rights to recover extra work or pending claims

I could go on of course, but I think you get my point.

Experience has taught me one thing for certain, when problems blow up on a project, what really matters is what the contract says, not what was promised or expected by way of a “good relationship”.  When there is a crisis, that longtime friend will turn to his (or her) legal representative who will use the contract as a shield, or a weapon, if necessary, to produce the best result for his company. That’s a response you can count on!

Remember, don’t let a good friendship interfere with sound business practice.  Do what’s required and keep that separate from your personal relationship with your customer.

“Business, you know, may bring you money, but friendship hardly ever does.” – Jane Austen

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