On Ethical Tattling

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Here’s a pretty interesting question, submitted via FaceBook:

If you are bidding on a job, and it is between you and a competitor of yours as to who will get it…and you have some very damning information about that competitor (like for example they have had their funding cut off and are in danger of going bankrupt as an example), is there an
ethical way to let the client know this without it reflecting badly on you?

The worst possible downside is quite unpleasant: you give your potential customer the dirt on your competitor, they don’t check into it and just give you the contract … your competitor finds out what you’ve said … and you were wrong. Lawsuit country. Your customer won’t trust anything you’ve said. The gloves will come off everywhere you and your competitor face each other.

What about taking care of your customer? If they are damaged by an engagement with a competitor and you can prevent it, do you have an obligation to say something in advance? Probably not. After all, you don’t walk around spontaneously helping companies with their pre-contract diligence, so it rings rather false to develop sudden solicitousness when you have something to gain.

This doesn’t mean you have to ignore the situation. For example, you can quite ethically disclose your financial information at the same time as you say something like, “This is a tough industry. Here’s proof I’m solid, and, no matter who you use as a supplier in the end, I suggest you get this level of information about them.” This way, you:

  1. Give your prospect good sound advice about diligence (which has the advantage of being absolutely true)
  2. Demonstrate your solidity
  3. Make absolutely no representations about your competition

And you get to stay out of court.

February 8, 2008 | Registered CommenterThe Startup Guy

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