Leading with Wisdom: Applying the Five Agreements in Your Business

Timeless principles often provide the most profound solutions to today's leadership questions. As business owners, we're constantly searching for ways to improve our leadership, streamline operations, and build stronger company cultures. Sometimes the answer isn't in the latest business bestseller or trending LinkedIn post – it's in wisdom that has stood the test of time.

Don Miguel Ruiz’s classic works, The Four Agreements and, The Fifth Agreement, aren't just wisdom, but also offer guidance that aligns surprisingly well with modern leadership research. As studies continue to emphasize the value of trust, emotional intelligence, and open communication in building high-performing teams, these Toltec principles provide a grounded framework you can integrate into your day-to-day operations.

In this article, we’ll explore each agreement in detail, discuss how it applies to running a thriving business (especially a distributed one), and highlight the modern research that backs it all up.

Let’s dive in!

The First Agreement: Be Impeccable With Your Word

“Be impeccable with your word” means speaking with integrity, saying only what you mean, and using language that uplifts instead of harms. In business, this principle translates directly into trust-building. Research shows that honesty consistently ranks as the top trait employees desire in their leaders, reinforcing the power of speaking truthfully and keeping your promises. Leaders who practice transparent communication—sometimes referred to as “radical candor”—often see improvements in team morale, engagement, and overall performance.

When you’re overseeing a distributed team, communication can sometimes feel scattered across emails, chat channels, and video calls. That’s where “being impeccable” really shines. Make sure your words are clear, concise, and aligned with your actions. This not only fosters a sense of reliability but also shows remote team members that they can count on you—even if they’re thousands of miles away.

The Second Agreement: Don’t Take Anything Personally

“Don’t take anything personally” reminds us that most people’s actions and reactions are shaped by their own experiences, mindsets, and challenges. In a leadership setting, it can be easy to internalize criticism or blame. But research on emotional intelligence shows that leaders who remain calm, empathetic, and self-aware tend to navigate conflicts more effectively. Teams that foster psychological safety—where people feel comfortable sharing ideas and making mistakes—often enjoy greater innovation and stronger results.

For you as a business owner, especially if you run a remote or hybrid company, practicing emotional resilience can be a game-changer. When you stop taking negative feedback personally, you free up mental and emotional bandwidth to focus on problem-solving. It also sets a tone that encourages others to approach you with honesty instead of tiptoeing around tough conversations.

The Third Agreement: Don’t Make Assumptions

“Don’t make assumptions” is about seeking clarity before jumping to conclusions. Research on cognitive biases, particularly our tendency toward “fast thinking,” supports the notion that our brains love to fill in gaps—even when the information is incomplete. Leaders who regularly challenge their assumptions and ask better questions often discover innovative solutions and reduce conflict.

Within a distributed team, this principle can save you from countless misunderstandings. Instead of assuming everyone is on the same page, encourage open dialogue. Ask follow-up questions during video calls, and invite team members to clarify or challenge decisions. This not only strengthens your decision-making process but also fosters a culture of curiosity where everyone feels their insights matter.

The Fourth Agreement: Always Do Your Best

“Always do your best” suggests giving your full effort within the circumstances of each moment. It’s not about perfection; it’s about consistent growth and genuine commitment. Studies on high-performing organizations highlight the importance of individual excellence in driving overall company performance. Leaders who encourage a “continuous improvement” mindset help their teams embrace challenges, learn from mistakes, and keep raising the bar.

In practical terms, this might involve setting clear performance metrics, providing supportive feedback, and celebrating small wins. Rather than focusing on flaws or past failures, remind your team—and yourself—to aim for consistent progress. By fostering an environment where everyone strives to do their best, you not only uplift morale but also cultivate a culture of excellence that sets you apart in the marketplace.

The Fifth Agreement: Be Skeptical, But Learn to Listen

“Be skeptical, but learn to listen” strikes a balance between critical thinking and open-mindedness. In a fast-paced business world, it’s easy to either dismiss new ideas too quickly or, conversely, jump on every trend that comes along. That’s where a healthy dose of skepticism helps you probe deeper, question assumptions, and avoid groupthink. At the same time, research on inclusive leadership shows that diverse perspectives and shared decision-making often lead to better outcomes, especially in complex or rapidly changing industries.

For leaders of distributed teams, this agreement is especially relevant. When your workforce spans different locations, time zones, and cultures, actively listening to new viewpoints can spark brilliant ideas you might not have considered on your own. Encouraging open communication, fostering psychological safety, and using skepticism as a tool for thoughtful analysis can elevate the entire organization.

Making It Work in Your Business

1. Start with Self-Assessment: Review each agreement and honestly evaluate how you're currently performing in each area. Leaders who regularly self-assess and adjust their behaviors are more likely to be perceived as effective by their teams.
2. Choose One Agreement: Begin with the agreement that could have the most immediate impact on your current challenges. Attempting to change too many behaviors at once reduces the likelihood of successful implementation.
3. Create Implementation Triggers: Identify specific business situations where you can practice each agreement. Linking new behaviors to specific triggers increases success rates by over 70%.
4. Build Accountability: Share these principles with your leadership team and create mutual support systems.
5. Measure Impact: Track both quantitative metrics and qualitative feedback as you implement these principles.

Remember, these agreements aren't just philosophical concepts – they're practical tools that, when backed by modern research and applied consistently, can transform your leadership and your business outcomes.