Integrity, Professionalism and Competence in Business Transactions, Tactics and Strategies

For some time I have had the pleasure of writing regular articles on the specific and narrow topic of information relating to law. Many of these are at www.slaw.ca/author/mckay, with a more complete listing at www.dhirubhai.net/in/robertmckaylondon/. My purpose here is to review and update this work to some extent, extracting a selection of more general, rather than specific points, along with subjective opinions on the way, from a consumer point of view, business sometimes seems to be conducted. Although impressive products, services and experiences are to be found, would it not be appealing to see high standards of honesty, integrity, quality and value being consistently offered? An impossible dream, perhaps.

The article follows on from and is related to Fact v. Fiction, the use and communication of perceived evidence-based facts in these contexts being, to me at least, being preferable to fiction.

Unknown Unknowns

The world continues to change greatly and, whatever the future brings and despite any wilful and devious political and corporate hyperbole that abounds on these matters, it may well be that some aspects of the past will disappear or will alter to an extent. In the case of much that has been witnessed of late, we might certainly hope so. Almost without doubt, the pandemic is likely to create beneficial modernisation and efficiencies that can be enjoyed by the use of technology that was previously little-known, avoided or unavailable. We have indeed been forced lately to question much that has been familiar, perhaps because many of us have spent too much time in lockdown. While we certainly do not know exactly where we are going, it is unlikely that we are returning fully and exactly to where we were.

This serves to remind one not to be obsessive about that which is not too important and to recognise the difference between life-creating and life-saving activities and sometimes, just grubby ways of making money and paying the bills.

Managing and developing any endeavour, for the long-term and with success, is not just about watching for latest trends and fashions and instantly trying to exploit them. Recent times have highlighted that adaptability and ability to alter existing focus and preconceptions are obligatory. There may also be a time to make money and a time to use capabilities for societal benefit, without disguising the former under the cloak of the caring words of the latter. This would include the many examples in which crude, commercial advertising masquerades in the media and suchlike as serious and honest information content. Ideally, calm reflection, honesty and strategy rather than panic would seem to be the correct approach; cries that “nothing will ever be the same” are likely to be, to a great extent, devious, hysterical and ill-informed. For the most part, we can eventually put the bad times behind us and move on.

Competing Without Trashing

It may be fundamental to the task of competing in commercial markets that businesses must not only create value and unique selling propositions for their goods and services, but must also seek to destroy those of others, usually existing and long-established businesses. However, I doubt this and think it is more likely done in order to disguise the weaknesses of the attacker and prioritise as valuable only those qualities that it can offer. It is somewhat akin to the notion (though spare me from the psychobabblers!) of the person with a hammer seeing everything as a nail, or The Law of the Instrument.

The battle to establish, maintain and grow credibility, market share, reputation, revenue and profit is fierce. Available spend in markets is rarely flexible and in many cases is shrinking, so that everyone’s gain has to be someone else’s loss. Hence, there is sometimes a perceived need to trash the competitor in order to achieve traction, rather than building growth and rewards in more dignified and ethical ways, such as working harder and smarter, with genuinely superior products and services, and looking after customers more attentively.

Less frequently do we see established businesses overtly attacking each other or even defaming their minor competitors; they do not need or want to do so, partly because they have more sophisticated tools to deal with them. They have less need to claim that their competitors are dishonest or lacking in integrity, or that their goods and services are defective, but rather can trade on the values of their own propositions. Just as marketing and selling tactics are more effectively conducted by highlighting measurable benefits over features, or indeed, to use anxiety, fear or loathing as an emotional trigger, it is wiser to focus on one’s own strengths and capabilities rather than the alleged weaknesses and flaws of competitors. Importantly too, the giants have the resources to defend and protect their positions through the use of the legal system, as well as to flatter their new competitors by acquiring them and/or matching or exceeding their technical skills and ingenuity. This certainly does not make them better people, but it sometimes serves to reduce the hysterical noise.

The post-pandemic era will be one in which the weak and the strong, or perhaps the clever and the stupid, or perhaps the serious and the lightweight, will emerge in better or worse conditions, or maybe, not at all. While rejecting the myths of “good” or “moral” capitalism, for my part, I would like to think that, in addition to being appropriately managed and financially controlled, calm, intelligent, reasoned, ethical and honest conduct of business during and after the difficult period might deliver the winners.

Reaching and Retaining Customers

One of the key requirements of being successful in any commercial venture, and stating the blindingly obvious, is the ability to find, reach, impress, communicate and trade with customers. Yet, many of the obvious and arguably simple routes to market do not seem to work well.

Take direct mail, once the basic form of product communication but now much devalued; maybe it still makes some sense, though. Response rates, even in chasing existing customers for renewal purchases and business in general are pitiful and ever-declining, making expenditure in that direction often not cost-effective. Even lower rates are achieved by email campaigns but at least the minimal cost of mailing large numbers of addresses and coping with flawed data continues to make this an area of activity.

Tele-marketing is often worse. Is there anyone who wishes to be called by an occasionally unpleasant faceless stranger, inevitably at the wrong time of day, to be sold something that is probably not required? The chances of success on cold-calling are extremely low, for all the obvious reasons and where the call is to an existing customer, perhaps to secure a renewal and solicit some new business at the same time, much skill and luck are required to get it just right. Conversely, more often than not, attempts to contact them are almost impossible, as we wait on the telephone being told how important we are to them or for them to make contact after an enquiry to them.

Face-to-face selling, with a trusted sales representative visiting customers has all the right characteristics, combining superb salesmanship with customer care and the personal touch. Among the problems are the high costs of retaining the resource, with all the on-costs but also the fact that one individual can only make a limited number of expensive visits a day and has to spend a great deal of down-time arranging visits and travelling to clients. Therefore, unless each successful transaction carries substantial value, it has a tendency to add up to not very much. It is only worth having face-to-face contact if the individual rewards are high.

Retail outlets and agencies of one kind and another are another channel increasingly impaired by changing customer habits, loss of margin and remoteness from end-user customers.

So, is there only online, as High Streets die? Many of the other marketing tactics employed seem to fall into a category of being seen to be doing something, are often unmeasurable/unmeasured and serve more in terms of creating awareness and driving potential customers to web sites, rather than with the purpose of achieving actual, on-the-spot sales. Many people value Amazon for its efficiency, professionalism and technical wizardry, if not for its employee welfare and desire to unionise, and its relevance is forever increasing. We are aware of the virtues of social and business networks and other forms of viral marketing to get messages out to and indeed build target communities. If awareness and brand identification is the key step towards making sales, as in consumer markets, then, all well and good; it seems to work there, for some, as an unwelcome fact.

The Customer Is Sometimes Right

It might be considered intuitive that to develop an existing or new plan, it would be the height of arrogance and stupidity not to speak to customers. That said, I cannot help but wonder if we, as consumers, always have the answers and, by implication, are absolutely certain as to what is best for us.

There are so many areas in which I neither know nor care about details or methodologies behind the production of goods and services that I value. However, I do expect others to know and be obsessed about them and to deliver them optimally to me. It would not surprise me if, for the most part, most of us as consumers have better things to think about than ponder on the tactics and strategies behind their outputs. Certainly, for some such customers, it might be downright irresponsible for them to spend too much of their valuable time worrying about available goods and services. Conversely, one might imagine that, in some cases, no one knows more about and is more focused on the minutia of their trade than the experts from within, who dedicate their careers to competing for growth and profit. These are the people who have the most to gain or lose from success or failure and who have nothing better to do than address it. Yet, the received wisdom is that it is better to find ten or a hundred people who do not know the first thing about it and act on their views.

Of course, one must not go to extremes and it would be wrong to suggest that customers should be ignored and shunned. Communication, feedback and the testing of ideas usually are good in principle, so long as it is not forgotten where the responsibility lies to produce and deliver the innovative products and services in question. Furthermore, in my experience, I have rarely seen structured customer product or service feedback that is enormously incisive, shocking or surprising. For the most part it tends to be predictable and ought to have been predicted by those who have the task of serving a particular market. Simple logic dictates that if one asks existing customers what they think of one’s products and services, most will express satisfaction or else they would have found another supplier, a corollary of which is that most like what they are receiving and cannot think of much to change about it. If asked the question, most sane people would say that in the future they would prefer to pay less or the same rather than more and that they do not want to pay for what they do not use nor want. They are likely to confirm that more is better than less, frequent better than infrequent but not necessarily at significantly greater cost and that in most cases, uncomplicated and clear is better than over-complicated and obscure. Least surprising of all is that customers, if asked, will confess that they value intelligence, honesty, integrity, clarity, value for money, quality and speed.

It seems to me that if I have to ask my customers what I should do next, I might be accused of not knowing what I am doing. More important, by working with customers and understanding their needs and objectives, is to know what they do now and will be doing next and then calculate how to be able to intervene in their activities and help them achieve their goals optimally and more profitably. For such purposes, there is no doubt that the customer needs to be courted and consulted quite intensively. Much has been written about the thought processes and vision behind such innovations, in their respective days, as tablet computers, social media platforms, minivans/MPVs and hula hoops, and how no focus group would have any part to play in their invention. Likewise, the next product or service that will astound us is being developed now by people who are much more reliant on their own vision and expertise than on accommodating the compromises of historical experience, for all its great worth.

Arguably, one of the enigmas which we face is the conceptual clash between the easy access to and availability of opinions and advice from every conceivable source, especially with (often excellent) blogging opportunities that exist. A risk is that there is a great deal of noise that can create a degree of power without responsibility. So, while it is interesting to know what everybody else thinks, advises and has to say, sometimes an informed decision simply has to be taken and executed.

Just Trying to Keep the Customer Satisfied

Decisions need to be made as to what to invent and develop in order to create product and service offerings and, though some will disagree, the focus group, questionnaire and consultancy approaches may not always be appropriate. Sometimes some real knowledge, expertise and intuition have roles to play. What I might hope to have is the benefits of their expertise, overlain with a strong element of technical know-how, experience-based judgment, market involvement, commercial, networking and entrepreneurial flair and financial literacy. To leave out or significantly reduce a focus on any one of these is likely to be to the detriment of the success of their endeavours. Quoting Van Morrison, referring to his particular medium and market, “The only requirement is, to know what is needed; be best at delivering the product on time.” A difficulty is working how to “know” really what is needed and to coordinate all the elements to deliver on time.

For many industries, research, contacts and experience are key. No-one can know everything, but they need to be aware of where to find information and opinions. This comes from countless electronic sources and data mining, published research and documentation, structured and less-structured research activity, monitoring events and plans, contacts in the market, attendance at and participation in market activities such as those of professional and trade institutes, conferences, exhibitions. Skill, experience and judgment, however, need to be applied. Furthermore, an intimate knowledge of and ability constantly to keep abreast or even anticipate competitor activity is critical.

One sees the increasing presence of the product development specialist with generic and certainly admirable skills in the processes of product development. Hence the techniques, research procedures, supporting documentation, validation and project management disciplines are likely to be exemplary but a question is whether or not these can be applied effectively and easily from any particular discipline to another one. There is little doubt that having experience of different markets and innovation applied within and to them is likely to achieve benefits in the transfer of skills and ideas, but the key is in the knowledgeable application of them to the market in focus. Their absence can be a measure of commercial failures.

Optimum Quality

“Quality”; it is one of those nouns and/or adjectives that everyone uses to describe their own output standards but for the most part is applied to whatever level – high, medium or low, that they are willing and/or able to offer. In many respects, though, that is a good and desirable thing as more often than not there are no objective standards of quality such as those of the International Organization for Standardization (ISO). In any case, sensibly, the word should be preceded by “optimum”, “appropriate” or suchlike, as quality cannot be divorced from competence, price, speed, brand and many other factors.

I sometimes have a sense, perhaps nothing more than that, as I read and listen, often from certain consultant charlatans, that in environments in which competing but commoditised goods and services are frequent, maybe the achievement of optimum quality standards is seen as not enormously important. I believe I sometimes detect mild sneering from such types at the idea that there needs to be specific investment in achieving and nourishing quality; for them “not bad” is the more likely goal.

It should go without saying that, for any business, the maintenance of quality should prevail in all that it does, including marketing, customer communication and care, process software and tools, metadata, search engine taxonomy, data analytics, to name a few.

Being of my gender and generation and a relatively uncomplicated person, I am inclined to respect the often-held view that the guidelines for understanding and resolution of many human dilemmas lie within the wise parables to be found in books and films about American crime families with roots in Mediterranean islands. In the same vein, all examples of model business practice can be derived from the automobile industry; utter 3, 5 or 7 Series, etc., and many people understand the quality metaphor. With the latter truth in mind, it is hard to imagine a modern Porsche, Audi, Mercedes-Benz and other brands that would not trade on actual or perceived optimum quality standards that are guarded by those manufacturers. These are simply obvious quasi-facts. If there is a significant absence of content quality, I believe that negative consequences follow, yet the admission of it is unlikely to form part of the marketing and PR messages that are distributed. It may be, however, that some are focused on optimum quality only to the extent that the specific demands of the market exist and are therefore sometimes low.

Pick Two Cards; Any Two

It always amuses me when I see light-hearted references to the rather tedious-sounding Project Management Triangle (alternatively called the Triple Constraint or Iron Triangle). Much fun can be made of the idea that in relation to products, services or outcomes, the choice is of quality, speed or price but only any two out of three can be had. For entertainment purposes it can be applied to restaurants, plumbing services, professional advice, airline travel and the like. Choosing to ignore the wisdom of business school and project management thinking, I like to take the view that to do business well, the objective should be to be able, profitably and in the interests of competitive growth and advantage, to deliver optimum quality and innovation, appropriate prices and speed that reflects efficiency and satisfies customer need. To do otherwise would seem to be a guarantee of business being lost to smarter competitors; perhaps this is wrong or na?ve. Expressed otherwise, if the propositions are true, using less pretentious language, it is just a question of conventional market positioning and segmentation. Few suppliers can and want to do everything and customers are all different, with differing requirements. It would therefore be inappropriate to have a single model in seeking to trade with them all.

Weapons of Mess and Disruption?

Perhaps it is at least in part the fault of the idiot wing of the fund management business, that it seems to have become necessary for nearly every aspiring new entity to classify itself as a “disruptor” or “disruptive”. Whether or not such entities, their products and services are capable of achieving the criteria set by the fundamentalist religious cult enthusiast attributed with having identified the concept, nonetheless, to attract the funds and appear to be on message, they have to be disruptors. I find it tiresome to see businesses, even before they have achieved anything of note or worth and, more than likely, not long before they disappear, describing themselves as disruptors in the markets in which they hope to have presence. It is so predictable, any time they have opportunities to publicise their often most ordinary efforts, that the word has to be introduced. Yet, for example, the well-publicised travails of the fund manager, Neil Woodford, seems to be, at least partly, due to the alleged shift of his choices in favour of such businesses.

One of the problems might be that in reality there is no absolute definitional consensus about what is and is not disruptive innovation. Many may very well be interesting, but they are hardly capable of sitting alongside Amazon, Google and Wikipedia.

Maybe what I find significantly bothersome is not the levels of success or failure in the innovations that are witnessed but more the hideous abuse of language to describe it, combined with the subtle or hidden messages that might lie behind the boastful words. Once such a word is introduced and achieves the intended objective of creating lack of clarity and precision, indeed, simply of dumbing-down, it is taken up and will not be let go. It sometimes serves to glorify the stupid and the obsession with self; it conveniently mingles fact with fiction, truth with lies, with its pseudo-psychology and vague sociological references and depends on blind faith in the goodness motivations of its creators.

I think that consumers need to be critical and analytical in evaluating the “next big thing”, primarily to be sure that it serves its intended purpose but additionally to know that those purposes are worthy and for benefits that are worth attaining. We know of many renowned disruptors, including, by way of examples, Trump, Stalin, Hitler, J. Robert Oppenheimer, as well as Alexander Fleming, Tim Berners-Lee and Alexander Graham Bell, but it is advisable to separate them in terms of societal value. I would be concerned about those who, behind a face of radicalism, have dark agendas. When, for example, a powerful yet unelected, English now ex-government servant called for “weirdos and misfits with odd skills” to apply for new jobs within the administration, is that progressive, as it may seem at face value, or, as many have suggested, an open door to racists, sociopaths and fanatics of all kinds, the unprincipled and undisciplined, combined with a disrespect for protective laws and for the welfare of others? It is certainly disruptive.

However, I am somewhat concerned that within the so-called disruption and among the so-called disruptors, there might just be, in the current climate, the potential for it to spread linguistically, like a mild neurological infection, a little in the direction of some manifestations of modern-day populism. Maybe, and uttered partly with tongue-in-cheek, observing where they exist, the pretentious corporate evangelists and gurus, even joined perhaps, for better or worse, by the occasional weirdo and misfit, together with that great self-belief, however unsupported by evidence, it is not their work but their limited, tired and hackneyed vocabulary which makes me uneasy.

Rear Window

I have enjoyed and occasionally cited Peter Drucker’s notion of trying to predict the future being akin to driving down a country road at night with no lights, while looking out the rear window, the obvious risks and likely outcomes associated therewith requiring no further explanation. Had it been daytime or in better circumstances, maybe the most valuable information gained would have been to know whence one had come and about that which was left behind. However, it might also afford the benefit of knowing who is following, perhaps stealthily, with hostility, in hot pursuit or to offer succour of some kind. If it is regulatory, compliance or policing authorities, it might be time to moderate the pace or even stop; if it is frightening troglodytes brandishing pitchforks from the back of a stolen truck, it might be appropriate to press the accelerator of one’s powerful and smooth ultimate driving machine and leave them well behind and forgotten; if it is respected and clever rivals, a subtle mix of experience, planning and strategy will be needed to outwit them and prevent overtaking. In all such cases, the benefits of rearwards vision can be immense and avoid the need for screams of “behind you!”; warnings are usually in the form of “watch your back”, “back me up”, etc., rather than with a focus on what might be more clearly in view ahead. Keeping an eye only on what lies beyond the front windscreen might indicate a hope of a future destination but not necessarily with reason and direction. Looking backwards carries the risk of living in the past, recalling previous glories and trading on experience from times long gone, while ignoring and adding little to the present and future.

The figurative hostile rednecks are probably the least worrying, subject to the quality and speed of one’s own vehicle. They appear, make noise and quickly tire, break down and/or are arrested. In real life, they might be inclined, however, to refer to themselves, somewhat boastfully and occasionally without appropriate reason, as “disrupters”. The other examples of rear window images are more challenging, interesting and provide for greater learning experiences.

When Things Go Wrong

It does not surprise me at all when relatively new and innovative businesses fail, for whatever reason; this happens all the time. Nor am I surprised when a gigantic, rich and well-established market leader, using commercial, financial and legal muscle, brings a smaller one down. It would be strange if it did not use its capabilities in such a way. To neglect to do so would be akin to a predator animal not acting as a predator; it is just natural, and the way things are. On the assumption that the predator has acted in accordance with the law, why would it not use its resources to that end? It is as much a part of its competitive armoury as any other of its tactics and strategies to defeat its competitors and sustain and grow market share. “Survival of the fittest”, like it or not, depends on the ability to defeat attackers. In any case, other competitors are always ready and willing to swoop in and, with expressions of teary-eyed sympathy, gleefully grab and exploit any business opportunities arising from the downfall.

Sometimes, instead of reading of a business failure, the news is of a huge, maladroit business acquiring a small, young, innovative and agile one. This might make the latter’s owners extremely rich, while the former takes the benefits of all the characteristics which are not to be found within itself, thereby using the acquisition to help evolve the acquirer from where and what it is to where and what it wants to be. That too is frequently the way things are and indeed the way that some young entrepreneurs and their financial backers want them to be; it is often the very reason for their existence. Frequently, we read of how the upstart businesses are about to overturn the status quo, but, more often than, not these are biased and untrustworthy PR statements intended to boost their standing, but without any reasoning or evidence as to how and when the revolution will happen. It might be too much to imagine that while those now-renowned technology billionaires were at university, creating their (to some) hateful monsters, their minds were on making the world a better place, more so than becoming rich, or that youths in new pop bands put musical excellence above the hope of wealth, fame and adoring and adorable young fans. Of course, most do not succeed as envisaged in their wildest dreams, but some do and, like gambling on the lottery, that near-impossible statistic is what matters. By this argument, the system failure is in not achieving, by normal methodology, the desired outcome, namely that of a takeover.

To some extent, entrepreneurial creations are achieved in environments with fewer rules and corporate distractions, established processes, committee structures and lifelong careers to protect. It might also be that they are inclined to put enthusiasm for their ideas ahead of empirical research into actual customer needs, potentially creating “solutions in search of problems” scenarios, with the outcomes that are thereby achieved. In contrast, at the other end of the scale, shareholder value, short-term budgets and forecasts, centralised technology centres and global project management often serve to drive and tweak the existing machine, meaning that acquisitive, to a greater extent than organic growth is more normal. For the innovators, their approach matches well to an environment in which venture capital funding can drive early-stage growth prior to the rewards from acquisition within a short time. In theory, this should free up the genius young entrepreneurs to achieve unimpeded rapid expansion, by occasionally cutting corners or without being troubled too much about real-world barriers or legal, regulatory or ethical constraints, together with having to understand and carry the burden of that which has gone before.

Both optimists and cynics might take the view that, in the long run, if the innovative ideas are truly impressive and admired by markets and their champions are massively talented and resilient, then, inevitably, they cannot be suppressed. If there are financial fortunes to be mined, logic dictates that, by one means or another, no matter what the impediments are, they will be extracted and turned into profits for someone, not least to recoup and further grow all the venture capital funding. Generally, I find it difficult to care too much, other than for any paid employee who may lose a job.

“There’s No Success Like Failure”

To a significant extent in business and real life, commercial and financial failure plays a critical part in charting its paths. Probably, it is its failed projects and ventures which determine its future rather than its overall historical success, where such has been achieved over time. Just like the inevitable conclusion of all political careers, the expectation of failure is often embedded at its very core. It is so embedded that in so many scenarios, notably in business and politics, by way of, for example, the creation of sinecures and the payment of bonuses, it is rewarded rather than admonished. Yet, one lives in hope that failure necessitates and compels new strategies and tactics for further experimentation.

In general, the adage of “fail quickly” combined with admission, acceptance, analysis and a plan to keep going, is one that should be always recalled, though the idea of forgiving and forgetting can be delusional. As to the emerging innovative, so-called “disruptor” replacement businesses, we simply need to observe, as many slip quietly into failure and oblivion, while the minority which survive and are subsequently acquired are highlighted in order to disguise harsh realities. Moreover, frequent failure is not the prerogative of the small, the inefficient or the inexperienced, as major market participants demonstrate with great frequency.

It is common, especially in business, where there is abject and superstitious fear of any hint of negativity, for people to fake unbridled optimism, or rather not to admit to even the possibility of failure. Hence, Bob Dylan’s enigmatic “there’s no success like failure” (from Love Minus Zero/No Limit) has a good ring. It plays to the idea that we never fail but only learn, progress, find opportunities, etc., Albert Einstein’s comforting words, “in the middle of difficulty lies opportunity” probably working optimally if you happen to be Einstein. The completion of Dylan’s line “and that failure’s no success at all”, enhances the dichotomy and strikes me as somewhat the more truthful component.

For those who fear using the “F” word, rather as many need to use “pass away”, “pass” and “pass on”, in place of the more accurate and honest “die” and “death”, denial of reality is essential. Therefore, failure is good. It forgives the bad decision-making, lack of experience and expertise, inadequate preparation and research and, most often, lack of good fortune, to allow the slate to be wiped clean and, so long as the invoices are being paid by someone else, never to speak of it again. In reality, often, failure can be devastating, relentless and unforgiving, with no good coming out of it and the best lesson learnt being that, in the event of survival at all, never to take such risks again.

It would be incorrect to suggest that failure cannot be turned into success, having extracted such pedagogical benefits as the experience offers, though it must surely be in only a tiny minority of cases. Nor would any creative and intelligent person ever advocate taking no risks. Yet, in my opinion, despite all the euphemisms, confidence-building and untruthful, uplifting, aspirational language on the topic of failure, there is more harm than good to be derived from it.

? Robert McKay 2021

Robert McKay gained his honours law degree at Queen’s University, Belfast. An internationally experienced law and tax publisher, he is the editor of the Barbican Association Newsletter, an associate editor of the Italian Law Journal and a publishing consultant and a regular columnist and commentator on professional publishing matters. He is an owner and director of Dunedin Academic Press.