The rise of globalization has in one part been enabled through the application of western ideas of rule of law to define the conduct of business. Often how we deal with customers, vendors and employees is based on strict interpretation of contracts. While contracts can be useful, I advocate for a different approach to business – an approach that values relationships over contracts.

The foundation of transaction-driven conduct is the contract. Clear contracts create transparency and engender good working relationships. When trust is low, or when there is no history or relationship between parties, the contract can provide a (new) beginning. A well-written contract can even bring new parties to the table and can bridge gaps in cultural understanding.

But oftentimes, relationships evolve beyond the bounds of the contract, and circumstances change in such a way as to muddle what the contract once made clear. I can think of many instances when I have chosen to ignore or forego a written contract in service of my relationship with a customer.

A few years ago, one of our customers had a change in their leadership, and the new leader was not aware that a multiyear contract had been signed. The company was cancelling their program with us and was not budgeting for a renewal.

In this moment, I could easily have turned to the contract and demanded payment for its full term. Our company would have gotten paid despite delivering no value. But instead, I decided to work toward continuing our long-term relationship with the customer. After just one year, we were able to relaunch the program.

Our simple act of forgoing short-term revenue enabled us to win the trust and respect of our customer. Today we have a much more fruitful and fulfilling business relationship that has lasted many years and dollars beyond what was outlined in that original contract.

Honor and integrity are long term business drivers. There is no form of legal contract that will adequately define and enforce these concepts for you.

This way of thinking can be equally applied to employee contracts. Our conduct as employers should be founded in fairness and equity, not in the terms of an employee agreement.

We should build deep relationships with our team members by providing a shared vision of why we do what we do. We should care for our colleagues, and we should make room for them to care for each other and themselves.

Consider the many stories of employees finding out their keystrokes are being tracked, or reactions to demands to return to working in the corporate office. In low-trust organizations – founded on contracts rather than relationships with their employees – the employers do not trust that their people will put in a fair day’s work and turn instead to micromanaging and demanding to know what they have been doing with their time.

This is absurd. If organizations can move beyond this narrow view, there will be a huge boost in productivity. If team members are trusted and are inspired by the mission of the organization, they will do amazing things.

I believe each team member is driven by a desire to do great work, and by a desire to be proud of what they do. Our job as employers is to enable this to happen by creating a deep and meaningful relationship with our teams. When we truly care about each other, we can move beyond what is in a job description.

Wouldn’t it be a beautiful world if we made it our goal to grow our relationships so much that they are no longer contained by a contract? I, for one, look with excitement and joy toward a future in which this becomes the norm. Won’t you join me there?

Opinion Piece: Deepak Desai, Founder and Chief Executive Officer at Ardor Learning.

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