But what is the purpose of our interactions between businesses? Is it control? Power?

Walmart – The Evil Empire

What company better defines the abuse of power better than Walmart? With a rich history of marketplace bullying, Walmart has routinely used it’s market authority to drive prices well past the breaking point for their vendors and suppliers. In order to do business with Walmart, vendors that sell basic products that don’t change are forced to cut their prices EVERY YEAR. This has resulted in an unbalanced (and self-corrupting) business model for the vendors, reduction of salaries including unethical compensation for some of the lowest paid people in the world, and record profits for Walmart.

So it seems that it’s possible for Walmart to enact almost universal control over both it’s vendors and consumers. Vendors are hoping to make money by supplying the worlds largest company. Consumers are looking for the best price they can find. It seems that Walmart is an unstoppable force. But this conclusion demands that we admit that one company can enact full control over another company. It demands that the current U.S. economic model of capitalism supports this unique power imbalance, and fortunately it doesn’t.

The continual evolution of the company mix in the U.S. is a testament to the desire for a balanced market structure. The dominance of a single company is constantly under pressure from others vying for the same market space. This constant shift is the result of a consumer base that refuses to stand still long enough for a single company to fully consolidate the market. This is good news for consumers, and bad news for corporate greed.

The Great Lie

But the underlying problem with the struggle to attain power is the tenant in which it’s based on. The lie is simple: “I can control you”. This belief is at the center of many of the unethical practices that are so common among businesses. Companies believe that if they can control their vendors, their customers, and their competitors, they can control their own destiny. What they are missing is that it is fundamentally impossible to control another person. History shows that people will fight, violently if necessary, against being controlled. Control is not the goal, relationship is.

Relationship is the single most important business principle in the world, and one way that relationship can falter is when one party tries to control the other. This struggle never ends well, and while short-term success can sometimes be achieved, the long-term goal of creating brand equity suffers as a result.

The Truth

So if we can agree that relationship is the primary driver of successful business, then it must also be a primary driver for profit as well. As all business exists to produce a profit, then this must be the case. Let’s examine.

So if profit is revenue – expenses, then how is it possible to say that relationship is the primary driver of business? In order to further this discussion, let’s assume that all of the measurable attributes of a business can be placed into one of the following three categories:

• Internal – employees, executives, owners
• External – suppliers, partners, competitors, government regulation
• Customers – current customers, past customers that have left and went to a competitor, future customers that you hope to get

The relationship between a business and the people who make it run is somewhat easy to understand. In the example of Jim Collins of Good to Great, the right people must be in place to “drive the bus”. Employees and owners alike must be fairly compensated, empowered, and given clear direction. The goal of these internal relationships it to create internal harmony, not to exact control. The best companies in the world understand this, and use it to their advantage. Companies like Apple, Pixar, Google, and Cisco (just to name a few) attract the best talent by creating a relationship in which both the company and the employee benefit.

The external relationships with suppliers, partners, and even our competition is also vital to a successful business. While it is easy to see that a good relationship with a partner would be beneficial, it is important to understand that in order for a relationship to exist, it must benefit both parties. So this means that we must allow for our partners and suppliers to have reasonable profit margins as they work with us. As a business owner I completely understand the need to control costs, but in order to maintain good relationships our suppliers and partners must see the value in working with us. The value of our relationship must be greater than the sum of its parts.

As it relates to customers, the value of relationship simply can’t be ignored. Unfortunately the business world has not been the primary driver in the need for a better understanding of our customer relationships. As marketing messages have continued to flood our consciences, the word brand has been created to describe this unique relationship between businesses and their customers.

Branding is simply defined as “What my customers think of me”. Using Coke as an example (and knowing that they won’t mind as I’m a Diet Coke drinker); “What do I say about Coke”. I would answer that by saying “I love it”. Coke has created a relationship with me over the years, and created a situation where if I go to a restaurant that only serves Pepsi, I’ll drink water. Now that’s a monogamous relationship indeed.

In fact, the new truth to marketing is more like a marriage than ever. I can see it now, “…do you Chad, take this Diet Coke as your soft drink of choice. To enjoy when you are thirsty. In sickness and in health…“. Funny, but true. We call it marriage, Coke calls it brand loyalty. And as far as it’s role to play in corporate profits, it probably goes without saying that happy loyal customers leads to greater revenue for Coke.

Control != Relationship

So this entry all started with the realization that it is a lie to believe that it’s possible to control another person while having a good relationship. This is true in marriage, in business, as a parent, and with friendships. When I realized that this means that I should never set out to try and “control” a client relationship, I immediately started trying to get my head around what that means to FORGE, and me personally. Thanks for listening.

A Quick Disclaimer
I hope This post isn’t too much of a mess. I’ve been thinking about this specific issue of client relationships for a while now, and this entry is simply a way for me to put some of my thoughts down. I’m well aware that there are numerous books and teachings out there on running a business, and it was never my intent to suggest that I have it figured out. As Managing Director and a Partner at FORGE, in Dayton, OH, I am figuring out many of these things as I go. Thoughts and feedback below. -Chad

In one way, I guess I’m glad that every crap-tastic design firm in the world follows the lead of the innovative firms.  At some point in time, a company actually created the world’s first swoopy logo.  I bet it was radical at the time.  Perhaps at that time, every logo was Times New Roman, and the swoop was the wave of the future.  Maybe I should just realize that’s just the way it is.  Sometimes I think that I should just not watch tv, read magazines, or visit any stores.  All it does is serve to depress me.  Especially when I see how much money goes into advertising and promoting a brand that is basically a piece of clipart.

So if your a company and you’re looking for a new logo, brandmark, whatever.  Use a good company.  Look at their work BEFORE you call them and make sure that they aren’t going to just put a swoop next to your company name and call it a day.  If you’re going to do that, just pay $99 and don’t bother calling a good branding firm.

Image taken without permission by a company that does the crap I’m talking about

Ok, I’m done.  I don’t really feel better.  Vent Fail!