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Wednesday, February 11, 2009

The great competitor

Some days, you can smile about your competitors' misfortunes. If you listen carefully, you can learn why they failed, so you don't repeat their errors.

Paradoxically, however, as I gloated on hearing the competitors' bad news, I felt a slight shudder of anxiety -- the very wrong things the competitors had done that lead to their losses, I had done myself, with undoubtedly negative consequences. The only difference is one of degree.

Rome is burning. Let's build a mansion.

A few years ago, as my business's downward spiral accelerated, we took a family vacation/business trip, visiting a community where we had some employees in a once-thriving (but now declining) market. I took a few hours from the vacation to meet with a key employees, remarking (somewhat arrogantly) that, since this is a valid business meeting, I would claim two nights of travel, plus the direct costs of getting to the meeting, as a tax deduction.

Three weeks later, realizing our business had reached the red line, I gave (short) notice to the employee and made an enemy for life.

He's losing his job, and I'm taking vacations -- and claiming tax deductions as well -- why wouldn't he be embittered.

My competitor took things a step further. As his business hit a rough spot, he devoted his time, resources, and cash from his business to build a really nice home for his family. Trouble is, he didn't bother paying his taxes. The tax authorities, I learned today, seized everything he owned. His wife left him.

We have a relationship. Let's just use it to make some money.

Most of our business sales arise from understanding supply chain relationships, and ensuring we provide our services at exactly the right place where these relationships count the most.

This is powerful stuff, but we've pushed things too far, without respect for the underlying consideration that, when all is said and done, we must deliver more than we take. Thankfully, this kind of business-damaging behaviour can be repaired, when you realize that the relationship should always be founded on respect for the needs and values of your clients.

Today, I read some fascinating correspondence from a competitor to a third party who had lost business and respect by pushing, arrogantly, for sales without communicating real value. Most interesting are the desperate emails when, after losing the business, the competitor tried vainly for a second chance.

We thankfully have received second chances, but the damage control and repair took several years. We don't take our relationships for granted and look, always, at how we can give rather than take.

Delegation is great. I'll focus on fun stuff.

A few years ago, I thought we had a thriving, viable business with everyone working well at their tasks. So I spent time on things that were more fun and rewarding for me, including (this seems really dumb now) fiddling with an airline's frequent flier program and fighting an Internet-based ponzi scam. At the time, I could rationalize purportedly good business reasons for these distractions, but failed to see that the priority should have been the business.

My competitor, meanwhile, while building his mansion, failed to show up in the office, leaving his employees to do all the work. Trouble is, he wasn't paying his bills or remitting statutory deductions, and his employees were collecting prepayments from clients for services where (after spending the money on personal needs) he didn't have the ability to deliver the end product.

We're picking up the pieces now, delivering some $10,000 in free services to our competitor's victims, one of which is a three-generation business that has survived good and hard times.

Today, as I think about my competitors' failures, I'm thankful that in making the same mistakes that led to their destruction, I didn't go quite as far or deep down the slippery slope; and caught and learned how to change in time.

You may have the same choices.

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