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Business is War?

Was Gekko right?  Is business war?  And if so, is Sun Tsu's Art of War still the answer?  μ

Old Mantra:  Profit Maximization

It's true that the only goal of business is to maximize profit.  However, businesses are led, operated, and funded by people.  Yet it's these same people that have emotions.  If you squeeze every last nickel out of your suppliers, bring emotional artifacts into negotiations for financial gain, and correlate the level of service for your customers only by wallet size, you may have a financially successful business in the short-term, but you also may be mortgaging your reputation and long-term prospects in the process.  And your reputation, my friends, is the only thing you truly have in this life. Eventually, every company becomes a buggy-whip business (i.e., obsolete); the large turnover in the Dow Jones over the last century is testament to that fact.  Your business won't last forever either, so it begs the question:  in your next endeavor, will the people you marginalized for short-term profit be willing to go to bat for you again? Here's an example. I was talking to a friend this weekend about a real estate "startup" (they've been around for a number of years, growing rapidly, and may not be classified as this any longer) he is part of.  He told me a story of a potential client they did some work for, closed a deal, and were arguably owed a significant fee.  Now, instead of operating with integrity and keeping the relationship at the forefront of their operating protocols, this company decided to play the business is war card, never paid a fee, and leveraged the information received to broker a deal with a competitor.  My friend then told me how they've blacklisted this company internally and tell other acquaintances in the industry not to touch this company with a 10-foot pole. To me, the long-term loss far outweighs the short-term gain.

New Mantra:  Relationships

I say nay to operating any of my businesses solely for the almighty dollar. I'd rather create meaningful relationships with my internal team, outside advisors, Board members, clients (I don't like the word "customer"), partners, and suppliers.  In the end, it's these folks that will go to battle with you, fight with you, and help you when you need it most (i.e., not when you're on top). Now, time is a valuable commodity, so how do you prioritize?  I take the following approach to the entire team:
  1. Co-workers come first. Many people will say customers, but if the folks on the front line aren't happy, engaged, and aligned, why will they treat our clients well?  In terms of a startup, you may have some external partnerships, but may be core to what you're building.  For example, if you're building an iPhone app, an agreement with an outside development team is critical to the success of your business, so clearly these folks come first.
  2. Clients are next. Some reasons are obvious (e.g., they pay the bills), but I tend to think of it in different terms.  These are truly your brand ambassadors. You know the old story, a customer with a negative experience is 10x more likely to talk about your company than a customer with a positive experience. Start treating every customer like a client. They won't care how big, profitable, or famous you or your company is.  They will, however, care a great deal about how genuine you are.  Be genuine!
  3. Everyone else. This includes other external consulting, partnerships, and outsourcing arrangements you may have that are not central to the business (e.g., outsourcing accounting isn't as critical as a partnership with an iPhone app developer).

Karma, Perhaps?

Lets put it this way.  Don't talk down to the janitor because someday he may be your boss.  You can't always value a business (or a person for that matter) strictly by what's on the financial statements.  Many times, the selfless assistance of others can reap far greater returns than any capital investment, whether internal or external to the business.  Call it what you will, but karma plays a much larger role in our success or failure than many of us would like to acknowledge. As for me?  I choose giving One Hour and building relationships any day of the week, and twice on Sundays, over sticking it to someone for a few extra shekels. You should follow @seanMeverett on Twitter here.
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