Businesses remain stuck in short-sighted “shrewd” practices
If you spend time with businesspeople, you soon pick up that they value something called “shrewdness” over most other things – if you aren’t sharp and quick-witted, with an instinctively predatory commercial instinct, you shouldn’t really be in business. By this they mean that the ability to sniff out and design a great deal is paramount – getting the right price and right margin, usually at the expense of the party at the other end of the transaction.
But this is trader-mentality business: get the most for yourself out of every transaction, as though you may never see the other party again. It is how hawkers on the beach operate when selling carvings to tourists, and I get surprised when I see the heads of large, long-lived organizations thinking like that. Let’s consider some examples.
Start with one I’ve covered here before: ISP speeds. These people routinely lie about the speeds you are going to get by connecting to them – and they’re still at it. I see adverts every day about mythical speeds that are “super-fast” or “twice as fast” as anyone else. Most of those claims are plain lies – but I guess those who make them think lying to customers is “shrewd” because you fool them into joining your network, ha ha ha.
Question: is it shrewd to create bitter disappointment and frustration in your customers?
Here’s another: ever got a loan from a bank? If you are fortunate enough to get one approved, you will notice some peculiarities. A loan is apparently something that is entirely in your interest rather than the bank’s, so you must pay every possible charge associated with it – the bank is apparently doing you a favour, and so foots nothing. There is also an “arrangement fee” – a large sum the bank charges for taking the trouble to give you the loan. This fee is deducted from your account straight away, before you have even signed for or received anything.
Later, interest payments (at a handsome margin to the bank) will be deducted monthly. If interest rates go up, what you pay will increase immediately. If they go down, however, it is up to you to notice and “request” a reduction in your payments. This is “shrewd” stuff, isn’t it? Clever people, bankers – but presiding over one of the most reviled and mistrusted industries on the planet.
Many other businesses invest in call centres to deal with customers. Here, the ‘shrewd’ idea is apparently to maximize the ratio of customers per representative. And so you enter the twilight zone of automated responses that keep reassuring you that a rep will be with you any second. After many minutes of hanging on you will probably slam the phone down in frustration, hate the company for life and make sure you tell everyone you know.
Nice and shrewd.
Ever dealt with a large company? If you buy anything, you pay cash; if you supply, you wait for six months or more before they pay you. Why do they do that? Because they can. It’s shrewd, you see.
Wake up, businesspeople. These are outdated practices that have no place in modern business. Good business is not exploitation; it is the cultivation of lifelong relationships and the building of deep loyalties. You’re not selling sweets to strangers; you’re trying to create glue that binds people to your business. That requires that you go from “shrewd” to “wise” – understand that you have to give some value away today in order to continue receiving it tomorrow and grow the cake for everyone.
I look forward to the day when businesspeople realize long-lived success is not about how cunningly you create ” I-win-you-lose” situations; it is about how wisely you generate “win-win” for every element in your business ecosystem.