Gini Dietrich

How to Spot Red Flags In New Business Relationships

By: Gini Dietrich | January 14, 2020 | 
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Spotting Red Flags in Business RelationshipsThey say that if you’re wearing rose-colored glasses, red flags just look like flags.

It’s also true if you stick your head in the sand. You don’t see any flags at all—red or otherwise.

That’s no way to run your professional life.

There are lots of reasons right now we might want to stick our heads in the sand or wear those rose-colored glasses—unsteady global economy, Megxit, the prospect of war—but there are risks associated with it, including being caught off guard.

It’s important to be realistic and weigh risks against the opportunities—against new business, a new job, a promotion, or even continuing on with a client.

Looking for red flags is the best way to do that.

Unfortunately, most people don’t come with a sign above their heads that says, “I’m going to act really easy going, but will harp on absolutely every detail of every asset you produce.”

If only.

No, people aren’t usually aware of their own red flags so it’s on you to find them to make decisions based on the data in front of you.

What Is a Red Flag?

A red flag is a sign, signal, or symptom that a person does not fit your personal ideal profile.

In the work we do with agency owners, we have them create an ideal client profile—and then write down questions they can ask that would help them determine whether or not that person fits that profile.

The ideal profile is going to vary based on what it is you need to accomplish—and so will the red flags.

What might be a red flag in one situation is not in another. 

For instance, Laura Petrolino, our chief marketing officer, is one of the most optimistic people I know.

She’s full of rainbows and unicorns and glitter—and she’s super fun to have around.

(I am a good balance to her because I’m very cynical. So much so that she calls me her rainbow killer, which is a funny story for another time.)

In most cases, Laura would be amazing to work with—she is amazing to work with.

But if you needed someone like George Clooney’s character in Up In the Air, Laura would present all sorts of red flags in that job interview.

The qualities you’d be looking for in someone interviewing for that job would be almost unfeeling and willing to do really hard work, no matter how they felt about it emotionally.

Laura finds the good in everyone, which is a great quality to have…unless you need to fire everyone and start over.

Her optimism would be a massive red flag in this case.

What Do Red Flags Look Like?

Red flags in our industry can take many forms, but the most common are that executives:

  • Often want more than they will pay for or that your team has the resources for.
  • Have unrealistic expectations.
  • Don’t want to put in the work or time necessary for success.
  • Want things that are not possible in their timeframe.

It’s our job to find out what they want ahead of time—and help set expectations.

But sometimes we miss the red flags.

Or, we see them and we ignore them (which is something I’m guilty of more often than not). 

I once had a prospect say to me as he was signing the contract, “Don’t eff this up. If you do, I’ll ruin your reputation.”

Let’s just say, I should have taken the contract, ripped it up and ran as fast as I could away from his offices.

But I didn’t and, for the next six months, he made our lives a living hell.

If he wasn’t yelling obscenities at us because of things outside of our control, he was dressing down his leadership team in front of us.

There were many tears in those six months and, by the end, I was the only one from my team who would show up for meetings. 

I knew better than to pursue the relationship, but it was a lot of money—to the tune of $30,000 a month—and I ignored the red flags.

One person quit over it and another told me she wouldn’t do anything to help his account.

I was floundering on my own, not to mention the journalists who laughed at me when I called.

It was a complete disaster for morale, reputation, resources, and culture. 

How to Detail Your Specific Red Flags

What is an absolute deal-breaker for you might not bother someone else at all.

The important thing is for you to figure out who your ideal client is and what characteristics, attitudes, and even phrases they may use don’t fit that profile.

Those are your red flags. 

The first thing you want to do is look at your history.

Who are the clients or bosses you’ve had that have driven you up the wall? What drove you crazy? And why did they drive you crazy?

Take five minutes and write down what it was about them that made them a bad fit for you—either for your agency or for your career.

Sometimes it’s a flashing bright red flag such as, “Don’t eff this up” or watching a boss or client make others (or you) cry.

And sometimes it’s a little more subtle. 

We once had a client who embellished EVERYTHING.

At first, we thought it was kind of funny and a little endearing.

Then it got completely overwhelming and ridiculous.

In retrospect (and hindsight is always 20/20, isn’t it?), we never, ever should have brought her on as a client.

Sigh.

Lessons are hard sometimes. 

Once you’ve spent five minutes detailing the things that have driven you crazy, flip it on its head.

What are the things you’ve loved about certain clients or bosses? What about colleagues and team members?

Spend another five minutes noting all of their characteristics, their attitude, and the ways they approached challenges. 

Don’t Be Afraid to Say No

I had a colleague early, early in my career who went through team members like water.

It was insane.

She was known as THE person you didn’t want to work with. Ever.

So when my boss came to me and asked me to work with her, I died a little inside.

I’ll never forget what she said to me, “If you can’t work with her, no one can and we’ll know the problem is her.”

Uh…I’m pretty sure the problem is her, but OK. 

Let’s just say it didn’t work out so well. I ended up leaving that job (probably seconds before I was fired) to move to Chicago.

But I also didn’t have the self-confidence back them to say, “No way. I love my job. Not going to do it.”

Had I done that, I may very well still be there.

I guess things work out the way they’re supposed to, but that doesn’t mean it has to be painful.

If you see red flags or find yourself facing a situation that looks to be bad for you, stick up for yourself.

You’ll save yourself time and angst in the long-run.

It’s never, ever good longer term.

A Quick Ad Break

If you need help finding the red flags, creating a list of questions to ask, or building your self-confidence (and eff you money) to be able to walk away from an opportunity, I have three spots remaining in my one-on-one coaching program.

I can help you with that—and lots, lots more. 

If you want to learn more, visit this page and let’s get a time scheduled for the two of us to chat.

A System to Identify Red Flags

If you’d rather go it alone—and that’s perfectly fine, too—let’s talk about how to develop a system to identify red flags. 

You should have a goal to disqualify every opportunity in front of you.

If you’re on the agency side, this means you should attempt to find a reason NOT to work with every, single prospect you talk to.

I know, I know. That sounds ludicrous.

But if that’s your goal, you’ll get better and better at meeting ONLY with your ideal clients and, no matter how hard you try, you won’t be able to disqualify them. 

If you’re on the corporate or non-profit side and you’re interviewing for a new job or a promotion, treat it the same way.

You want to find reasons not to accept the job or promotion.

If you can’t find red flags, you know the job is right for you.

One of the things that drives me absolutely batty when candidates interview with us is when they don’t ask me questions.

In every, single interview, I will ask, “What questions do you have of me?”

It’s shocking how many candidates say, “Oh, I got them all answered with your team.”

That is a massive red flag for me.

If you aren’t prepared enough to ask the CEO of the organization where you will be working a ton of questions, you won’t fit here.

I don’t care if you already asked them of my team. Ask again!

Who knows? You may get different answers, which could be one of your red flags.

Treat every opportunity as a way to disqualify.

If you do that, you’ll almost never be unhappy with your decision. 

How to Dig Deeper to Find Red Flags

On the agency side, the best time to find client red flags is while you’re getting to know them in the new business meetings.

In the work I do with my coaching clients, we’ve built a massive list of questions you can ask prospects.

I’m not going to go into the full list here, but I want to run through a few of them, and give you an example of the kind of follow-up questions you can ask to really unearth the red flags, if they exist.

We once had a prospect tell us his goal was for us to make the phone ring, but that he didn’t have time to answer it.

Um…

That’s sort of not how it works.

When I asked this prospect what success looked like after a year of working with us, he said, “I want you to make the phone ring.”

I then asked him to give me some details about that: how many phone calls in a day? What kind of revenue does that represent? What were his expectations in our generating those kinds of leads? Who will we work with to address that influx of new requests?

After all of those additional questions, I discovered there wasn’t anyone on his team to answer the proverbial phone. Nor was there anyone who would be our day-to-day contact.

He told us he simply didn’t have the time and that we should just take the ball and run with it.

ABORT!

Combine that with some other things he said (“we don’t really have a budget set aside” and “is Oprah still around? I’d like to be on her show. I mean, I know we’re B2B, but it’d still be cool!”) and it was easy to make the decision to walk away.

What a Red Flag Might Look Like On the Client Side

You might also ask, “Who are your competitors? What do they do that you admire? What do they do that you hate?”

Pay really close attention to their answers.

If they’re substantive, thoughtful answers about the strengths and weaknesses of their competition, you could consider that a great sign that they would give you a fair shake.

They probably wouldn’t start a business relationship with a lot of assumptions and preconceptions about what is going to go wrong. 

On the other hand, if they can’t find anything good to say about anyone, you have no reason to suspect they’ll have anything good to say about you, regardless of the work you do.

That’s a red flag.

And On the Employee or Manager Side

The same goes when you’re interviewing someone for a new job.

If they don’t have anything nice to say about where they’re currently employed or their former bosses, you have no reason to think they’d say nice things about you when/if they leave your organization.

I like to ask questions that are specific to the types of work we do—and the results we get for clients.

I will ask a candidate what kinds of results they’re most proud of and will raise a red flag if I’m told it’s all vanity metrics with nothing substantial to back it up.

Likewise, just like I’ll ask a prospect about their competition, I’ll ask a candidate about their bosses or about their colleagues.

I want to see what they’ll say, particularly if they feel especially comfortable with me.

Ask those questions!

Look for red flags.

The phrase, “Hire slow, fire fast” exists for a reason.

I know hiring is a huge pain in the butt, but it’ll save you lots of time, money, and frustration if you look for reasons NOT to hire the person.

And, if you can’t find any, the person is likely perfect for the job.

And the same goes if you’re interviewing for a job.

Find reasons not to work for that company.

If you can’t find any, it’s likely going to be a great fit for you.

Don’t get yourself into a situation that you have a boss who makes you cry or you’re looking for another job in 90 days.

Find the red flags and step away slowly.

It’s never, ever worth it in the long run.

Obey Your Gut

There are, of course, situations where red flags are acceptable.

Maybe there are one or two tiny things that you’d consider red flags in one situation, but not another.

Here is what I will tell you in those instances.

I had a business coach early on in the growth of my agency who would tell me not just to listen to my gut, but to obey it.

My gut has never, ever been wrong.

With every one of the examples I’ve mentioned today, I KNEW they would end badly.

Even with the client who we found amusing at first.

I knew we shouldn’t have worked with her.

Obey your gut.

Even if it’s your very first job interview or your very first new business meeting, your gut will tell you whether or not something feels right.

Find reasons to disqualify the job, the candidate, or the client.

Ask questions and dig deep to find red flags.

And then obey your gut. It will never, ever steer you wrong.

What Are Your Red Flags?

I’d love to hear what types of questions you ask to find red flags—and what those red flags might be for you.

We can discuss in the comments below or in the best community on the internet for communicators—the free Spin Sucks community

Photo by Ben Wiens on Unsplash

About Gini Dietrich


Gini Dietrich is the founder, CEO, and author of Spin Sucks, host of the Spin Sucks podcast, and author of Spin Sucks (the book). She also has run, built, and grown an agency for the past 14 years. She is co-author of Marketing in the Round, co-host of Inside PR, and co-host of The Agency Leadership podcast.