Prior to signing a consulting agreement, both the business owner and the consultant have a chance to review it. And within that agreement, often lies a confidentiality clause, sometimes referred to as non-disclosure. There are typically four main reasons business consultants keep things confidential.
4 Reasons Business Consultants Keep Things Confidential
What’s important to note is that confidentiality goes both ways. Not only is it supposed to protect the business owner, but it is also intended to support the consultant.
At least some kind of enforced acknowledgement to keep things confidential is encouraged in all consulting projects. So, whether you’re the business owner or the consultant, ensure that there are confidentiality clauses in place before you sign your next consulting agreement.
It might be the difference between success and failure for you and your business.
Take a look at the four reasons business consultants keep things confidential.
1. Protect the Best Interests of the Business
One of the primary reasons business consultants keep things confidential is to protect the best interests of the business.
Most business owners assume that this reason is entirely in their favor. However, it’s actually in favor of both parties.
The business consultant prefers to keep things confidential for the business, too, because it allows them to have better control over the success of the business.
For example, if word gets out to a company’s competitors that it’s struggling in a particular market or about to launch a new service or product, the competitors may attempt to use this information to their advantage.
As a result, the hill to success gets a lot steeper for both the business owner and the consultant.
2. Protect the Best Interests of the Business Owner
A business that needs consulting, especially business turnaround consulting, is usually not doing very well. Naturally, it is common for the business owner to struggle, too, just on a personal level.
They may be struggling financially, mentally, physically, or even spiritually. That last one sounds crazy, but it’s true. This is one of the four reasons business consultants keep things confidential.
Consultants are expected to be objective. In fact, that’s one of the core qualities they bring to the table to drive change within a business. For the business owner, on the other hand, their business is generally very personal to them.
Keeping things confidential gives the business owner a sense of safety and understanding that any communication between them and the consultant remains protected.
The third reason business consultants keep things confidential is non-competition.
Most solid consulting agreements include a non-competition clause. It is often separate from the confidentiality clause, yet there is an element of confidentiality worth recognizing. This prevents the consultant from consulting with two similar businesses at the same time.
Obviously, this reason is more in favor of the business owner. The business owner does not want the consultant helping their competitors.
But, if the business consultant is performance-based, they don’t want that either. In fact, it would completely contradict their effort to help a business beat its competitors and succeed.
4. Protect the Best Interests of the Consultant
The last of the four reasons business consultants keep things confidential is to support the best interests of the consultant.
While working with a business, a consultant uses a variety of processes, strategies, tools, and so forth. Sometimes, a consultant may even utilize intellectual property or proprietary methods that they want to preserve.
Keeping things confidential, in this sense, is critical for the consultant to do their job.
Similar to the business owner in reason three, the business consultant doesn’t want the business owner sharing any of its practices to those who aren’t involved in the actual consulting project. There’s no telling where that information may end up.
By keeping things mutually-confidential from the beginning, a trustworthy consulting relationship is established. Before agreeing to your next consulting engagement, ensure you have a sound confidentiality arrangement in place.
For performance-based business consulting, contact The Business Turnaround Group.