There is a thing out there called Privilege.  It exists but many people, especially inexperienced start-up founders, often don't recognize it, understand how to use it and more importantly, understand the ramifications of misusing it.

Simply put, Privilege is "a right, immunity, or benefit enjoyed only by a person beyond the advantages of most".   It exists in business through long developed and trusted relationships. Success breeds it. Failures diminish it. Sometimes described as the old boys' network, Privilege allows certain individuals to by-pass normal processes to fast track something that they want done.

Here is an example.  At PeopleSoft, when I was hiring for critical jobs, often I only hired or promoted someone who I  knew and massively trusted, or was recommended to me by someone that I knew and massively trusted.

Today, I refer people to companies who are looking to fill key roles. Many get hired. All of them get serious consideration. The reason is that I have Privilege with the hiring organization. In other words, they trust me to have done some, if not all, of the due diligence for them.

This also applies to companies that I recommend to some investors to consider for funding. The same phenomenon occurs. They get serious consideration and a chance to make their pitch.

With Privilege comes an obligation to only make referrals that I believe in, so I do three types of referrals. The highest level of referral is that I trust this person and so should you. In hiring, this would mean that I would hire the referral if I was in your shoes. The second level of referral is that I know the person well enough to know the fit is good, but I will tell you their weaknesses and my concerns for you to do due diligence on. The third level is I have meet the person and like the resume and their story but "buyer beware" and full due diligence is required.

Unfortunately, Privilege only occurs when there is a history of success between the party giving the privilege and the person receiving it. In other words, screw it up and don't expect Privilege in the future. Further, when Privilege exists and you break the trust, it is often never recoverable.

Yet, I frequently see people do just that. I recently arranged for a young entrepreneur to get to the head of the line for an opportunity. I thought he was very capable and a good fit so had used my privileged relationship with the company to make it happen.  Once there, he changed his script from what he had told me he wanted, to something completely different. I couldn't believe it so I reconfirmed with him what he wanted and then got the company to give him a second look. And again, his story changed when he was in front of them. Not only did I look like an ass, he did as well. As a well known senior executive once told me: "Here is what I know – if you go sideways with most senior people (or for that matter, with me), you are screwed forever."  Unfortunately, this young entrepreneur is now in that category.

Trust is a fragile thing. Privilege is as well. Recognize it, understand when you are being granted it, and don't screw it up.

© 2012 Meaford Group

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