Abusive Relationships in Business


I want you to know the story of a smart and profitable business owner named David. He owns a successful company and treats his employees well. Nevertheless, David was having problems with one of his suppliers. It seemed that no matter how much business they did together or how long they had worked together, problems continued. David had an excellent relationship with most people and this vendor was no different. David could call the vendor, and while the staff may sometimes be unpleasant, the owner was always easy to deal with and quick to promise a resolution.


After some time, David finally realized that the problem he was experiencing was not one of communication. He had worked with this vendor long enough to iron out any misunderstandings. The problem was also not responsiveness. The vendor always responded quickly and promised to solve any issues, despite rarely doing so. Perplexed, David reflected on what the cause might be.


The primary goal of any business is to make money. To stay afloat, you need cash flow, return on investment, and net profit. When an owner starts a business, typically they begin with a handful of people. Those people, and the employees who follow, join the owner in the goal of making money. This shared purpose becomes the unifying mission of the organization. As long as everyone knows and works towards this goal, it is do-able. As with any real team, the participants should be compensated fairly for a fair day's work. 


These facts led David to discover the underlying problem with the vendor. The other owner fancied himself a smart businessman and wanted to maximize profits. So he paid his staff the minimum wage required by law, constantly searching for gullible employees. Pay was not tied to the success of the company, or even to efforts to make the company money. The owner had the singular goal of making money, while his staff had the singular goal of trying to survive on wages that were below the poverty line. To further bolster profits, the owner cut product quality, always seeking cheaper but sellable materials and gullible customers like David. David finally realized this was the problem with his vendor. The vendor viewed everyone as competition instead of teammates. Employees were competing with the owner for profits, and so were clients. The owner was beating his competition, but everyone was his competition.


This story is oft-repeated in business. Everyone knows that when you go on a date, you watch how the person treats the waiter. If your date is rude to a waiter, they will also mistreat you. Most people do not make the connection that if a company mistreats its employees, it will abuse customers. When you walk into McDonald's, you see employees trying to survive on minimum wage. Is it any wonder McDonald's used something called "pink slime" in their hamburgers? When you walk into Wal-mart, you see the apathy and hopelessness on the faces of the workers who struggle to survive on wages below the poverty line. Is it any wonder Wal-mart has become synonymous with inferior quality?


Employees in a company should share the goal of the owners. They are there to make money together as a team. In successful organizations, owners work hand-in-hand with employees to make as much money as possible. Anyone who tells you that honesty and fair wages do not work is quickly rebuffed by Toyota, the world's largest automaker, and Lincoln Electric, with the largest market share in their industry, to name just two. The easiest way to spot poor management is in poor employee treatment. Wal-mart feeds its employees anti-union propaganda so it can continue to abuse them while Toyota has a company union representing the interests of employees. Germany has one of the best economies in the developed world, and its companies have employee representatives on every board of directors. 


If you are an owner, I want you to consider two teams. One team pays players a fair wage for good work and the other side pays minimum (aka poverty) wage. These two teams are going to face one another in the marketplace, and you tell me which one will win. If you were betting one, which stock would you buy? One group is working towards a common goal while the other team is just trying to survive. American manufacturing and service industries are not struggling because Americans are not smart or hard-working. It is struggling under the weight of poor management. Employee-owned companies also tend to outperform other companies.


I encourage you to consider how your vendors and suppliers treat employees. If a vendor treats its employees poorly, it will treat customers poorly too. Why are you giving money to businesses that are trying to discover how to sell you the cheapest possible product for the most money? People tell me they cannot afford to shop anywhere but Wal-mart or eat anywhere but McDonalds. This mindset is like that of the young woman who says the abusive boyfriend is the only one interested. Just like the abusive boyfriend apologizes and promises the abuse won't happen again, these companies continue to make empty promises to gullible customers. It's simply not true, and nothing will change until you start expecting better. 


As a customer, if you support a company that mistreats people, then you support hurting people, yourself included. I encourage you to find another vendor who does not abuse you or its employees. They exist. They take care of their employees and their customers too. Stop supporting companies that abuse employees. Stop supporting companies that abuse you.


And David... he eventually realized these facts and found a vendor who valued his business the way David values his own customers. Miraculously, the problems seemed to disappear. We should all be a little more like David. 


You deserve more. You deserve better. You deserve quality.

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