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Tuesday, June 09, 2009

Relations: Why change is risky

Our visions, attitudes and reality are shaped by experiences, background, and existing relationships.

Most of us, most of the time, seek to live our lives within the safe zone of existing habits, values, and perceptions. Stretches outside these bounds are rare -- perhaps a crisis forces a change, or (more rarely) we feel comfortable enough where we are to reach out and try something new.

In part, this explains why businesses started during recessions usually do better long term than ones started during good times. Forced to create something out of nothing, in a tough market where innovation and selling abilities are essential, we somehow survive -- and then thrive when times improve. (Of course we can also get lazy, but even then, when times get tough, we can remember our earlier experiences, roll up our sleeves, and solve the problems.)

Our existing relationships, of course, provide stability -- and when our businesses are established, the repeat and referral business they generate allow us to maintain ourselves without straining too hard. They also provide an anchor and some security.

But they also can be costly and pull you down, or prevent you from making necessary changes.

The problem is in most cases you can't simply ditch them. Do you want to break up your marriage, for example?

Here is an example of how the dynamics of existing relationships (or lack of them) create opportunities and limitations in your marketing strategies.

In the first case, I am writing about an Ontario architect which has discovered a lucrative and highly successful business by acting as a self-contractor, especially for medium-to-high end cottages outside of Toronto. The architecture practice formed out of an informal partnership started during the 1990s recession, where the partners, not able to obtain architectural internships, ended up in family contracting businesses. They learned how to build as well as design. With the integrated approach and defined market niche, the architectural practice is thriving (and clients are receiving real value for their money).

In the second, a U.S. contractor which relies on architectural referrals for high-end residential projects asked me for marketing advice. Should this person bring in an architect and start designing his own buildings? I think you can see that this would be a highly risky move, indeed.

The best solution I could offer the builder is to engage in advising, helping, and training the architects on practical building techniques -- they may 'steal' the ideas, but the relationships formed will encourage more referrals (but nowhere as many as providing the architects with new client referrals directly.)

Of course, if your existing relationships are dysfunctional, you will need to change but beware of radical shifts. The grass is rarely greener elsewhere -- at least as you currently perceive things.

I remember well the failure of the Eatons Department Store in Canada. Founded by an entrepreneur, successive generations decided to live the life of the landed gentry, and the business reached the failure point. In a desperate move, the store tried to become "hip" -- ignoring that most of its current clients were elderly, and a massive new advertising campaign, with new merchandise designed entirely for younger people, would do little to satisfy the needs of the loyal, if aging, current clients.

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