The Great Rebalancing
Geoff Smith's Blog
Posted OnJune 02, 2022
My wife and I really enjoy newspapers. Not just news, but newspapers. Which is all great, except that recently the morning delivery started getting later and later. Past seven am to seven-thirty, or eight, or later. One Saturday recently, the paper came at nine-thirty, which kind of defeats the whole purpose. So we called to complain and the nice lady on the phone agreed that this was ridiculous and promised to speak sternly to the offending delivery guy. The next day our paper was delivered at eleven.
And even though things have improved since, I interpreted that as our delivery person letting us know where the balance of power lay in this particular relationship, and where we could stick it if we felt otherwise. We did not feel otherwise, and there it is.
This is happening, of course, right across the economy. A few weeks ago, I had to explain to a client that our key builders just didn’t want to work for him any more, and so we were declining a very large project being offered to us without competition. There was a strong feeling of one sidedness in our past experience when it came to fairness and accountability. We were the service deliverers in this case, but these builders are terrifically skilled, very hard working and more important to our success than this client.
There is a question, obviously, around whether everything simply reverts back to the same old same old once Covid is vanquished, supply chains get straightened out and our capable central bankers whip inflation. But I kind of like the new balance. I accept that perhaps I could have more generously tipped our newspaper guy (like, even once) and I obviously embrace the opportunity that our best builders now have to say ‘I’ll work hard and deliver value, but there will be respect and fairness, or I’m outta of here.’ Et cetera: Many business relationships aren’t being upended coming out of Covid so much as they are being rebalanced, and perhaps this may be more an opportunity than a threat.
Of course, that’s possibly a tad naive. The problem is how to find and maintain that equitable balance when everything is constantly changing, power balances are consistently shifting, and there is a strong human tendency to exploit every advantage in every short term negotiation. Perhaps because it’s just too easy, and the immediate self gratification is irresistible. Or maybe the long term risk of taking advantage is just too long term. Exploiting a power imbalance can be quite fun, I can attest to that. But it is also a fact that if you treat business relationships like NFL football, you can expect a 100% injury rate. I can attest to that too.
I’ve had a theory since long before Covid, but it is so contrary to conventional business thinking that I’ve kept it to myself. So allow me to try to establish some credibility by noting that I have been around a long time in what is considered a very tough business. And my experience has been that when it comes to the long term business relationships that are most important to our success, the competitive sports analogies everyone loves so much are entirely useless. What is far more effective is the language one is more likely to hear at a marriage counseling session. You know what’s coming here: Listening, compromise, empathy, bury the ego, and if you have to get the contract out of the drawer every other day to establish rights and remedies, the whole enterprise is in great peril. We have long term clients who have always taken that approach, and we put their interests ahead of all others. Obviously we try to avoid clients who take the middle linebacker approach, and we’ve had other clients who have moved from semi marital to semi middle linebacker and then back again. I should acknowledge that we had to change ourselves, some years ago, once we figured it out.
Covid has thrown everything up in the air, and the only certainty is that very many business relationships will be ‘realigned’. Some permanently, some temporarily, right now it’s anybody’s guess. We certainly know that we are ever vulnerable to another broad societal disruption, at any moment, maybe very similar to Covid, maybe entirely different. Perhaps this great rebalancing will give us the perspective to take a longer term view of how we work with one another. Perhaps I should make my newspaper guy coffee and a warm croissant tomorrow morning…
Thanks for reading.