Business Grudges. Be it post-purchase cognitive…
By: Stephen Underhill
Tags: Negotiation Strategies, Client Management, Business Strategy, Strategic Thinking, Management And Leadership

A serious business topic; a not so serious writing style.

Be it post-purchase cognitive dissonance, contract reconsideration, employment regret (both ways), a business transaction gone wrong, or the souring of a personal relationship, they are all perceived ‘win/win’ situations that have become ‘win/lose’ or lose/win.

Note: Throughout this article, remember that the ultimate solution is always available to both parties, that is, to totally sever the relationship.

So what is it that stops the severing of these relationships? It might be for a variety of reasons:

· Better the ‘known devil’;

· Better to lose a little money, but not all (interesting calculations over the long-term);

· Lack of known/understood alternatives;

· Lack of courage to face facts, to face the truth;

· Better to have a little security (albeit tenuous), than none at all;

· Too expensive to make the optimal corrections;

· Too difficult to solve the problems;

· The issues might just go away.

Whatever the reason for continuing the relationship, it is a CONSCIOUS DECISION to do so. In deciding on relationship-continuance, maybe you’re condoning and accepting the issues? And should the relationship end, there’ll be some financial loss, regret and possible pain. So you move on, having positively learnt from the experience, hopefully never to repeat the same mistakes.

Being that it’s rare for the issues to ever disappear completely, or for peoples’ memories to fade totally, it’s likely that some resentment and undertones will remain. But given that your conscious decision was to continue the relationship, any grudge you hold is nonsense, you chose the situation.

There are many parts to any relationship, be it business or otherwise. To name a few, consider:

· Trust / Faith

· Information

· Common Sense

· Ability / Training

· Negotiation

· Manipulation

· Research

· Costs ($$ / Time)

· Communications

… all of which can be the cause of breakdown.

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Although by definition it is ‘win/win’, Negotiation often results in one party feeling very pleased with their negotiated result. Conversely, the other party, on reflection, feels they could have achieved more. Who normally wears the blame? … Of course … “They shafted us at the negotiation table” … how often have we all heard that? Why is it that the winner is at fault? …

Negotiation is a learned and practiced talent. It takes research, careful goal-planning and parameter-setting for each negotiation point. It is not a simple, ‘sit down and have a chat’, as many seem to think.

… Too late, the deal is signed, and the contract must be fulfilled … begrudgingly. This situation is hardly a happy business relationship. But as the ‘loser’, any grudge you hold is nonsense, if the negotiations were that important, why weren’t your negotiators more skilled and better prepared? Where does fault/weakness really lie?

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The Ability/Training of many salespeople is questionable. Their negotiation skills are rarely well developed … and they have authority to negotiate pricing! For many salespeople, negotiation is a matter of discounting until the client decides to buy. Any fool can do that, the easiest route.

This leads to customers that buy at rock-bottom prices, demand 150% support (now un-funded), and when they don’t get it … become obnoxious. Although there may be other benefits (lower marginal purchase/manufacturing costs), these customers are not directly profitable for the organisation. Support is begrudgingly given, and if you believe your salespeople, they were “forced by the customer” to discount to get the business.

Is it possible that these customers are utilising an easy opportunity to decrease their costs, probably by simply just asking? Remember, salespeople are notorious ‘givers’ and customers won’t hesitate to ‘take’. Clearly, any negativity towards these customers is nonsense; if they had done anything wrong they wouldn’t be customers … and your organisation did accept their purchase order! Customers bargain the price down … simply because they can. Why let them? Don’t let them. The attitude that a little profit is better than none … do the maths and include your on-costs, overheads and direct costs of the salesperson! You won’t be happy; that 30% margin is necessary!

NOTE: Barring predatory business practice (illegal in most developed countries), if your Competitor can be cheaper than you, supports the customer well and can still be profitable … IT’S YOUR FAULT! You haven’t been keeping up with the Market, your information is poor; things have changed and you missed those changes! Research … find out ‘How’ they are managing to do it; ‘What’ are they doing differently … then COPY THEM!

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Business is business; never totally trust a competitor (friend?). It sounds extreme, but the amount of confidential information that accidentally passes over dinner and a few drinks is staggering. The assumption that ‘they’ didn’t really hear you, is foolish … ‘they’ quietly excuse themselves … go to the bathroom and write it down! Conferences are the perfect scenario; openly full of competitors. Loose lips … forget the ship-sinking; it’s an open invitation to your competitors.

The sub-conscious invitation was a lovely gesture … and now that you’ve lost the business, any grudge you’ve developed towards your competitor is nonsense; it’s the game of business and you would probably do the same if the situation were reversed.

Employees also sometimes unknowingly divulge important information externally, often unaware of the ramifications. To hold a grudge against an employee (black mark in the personal file) for an accidental tongue-slip is nonsense. The black-mark ‘threat’ however, is a popular (not recommended) method of managerial control. Perhaps internal communications need to improve.

And what about those disgruntled employees passing information to competitors? It’s not your competitors’ fault they’re disgruntled! Any grudge in this situation is nonsense, what are the real issues?

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Workforce mobility is now a fact of business life. To begrudge them leaving is nonsense, as employees don’t resign if they’re enabled, appreciated, paid appropriately, and working conditions are good. It isn’t a personal attack on management, they are simply not happy with their current situation. They haven’t done anything wrong, so there is no reason why their departure shouldn’t be pleasant, clinical, and FINAL. As they say, “A leopard’s spots never change”.

There will be recruitment logistics/expenses as a result; avoid thinking these as personal even though they may well be, in the case of small companies. Any animosity towards a departing employee simply fuels a smouldering fire, encouraging them to use their knowledge of your organisation against you, should they be joining a competitor.

So why not strategise for staff turnover? For example, plan for two-three years tenure for most employees and have predetermined goals to be achieved during that time. Set projects with stringent timelines and follow through to completion. In this way you ensure that your organisation has profited from the time they have spent with you. If they stay five years, with more projects, you’re well ahead. This is also a method of structuring an employees’ job, and providing performance measures.

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As for those potential customers, the tyre-kickers that use your quotations to force your competitors to offer lower prices … did they ever really have any intention of buying from you? How many times has this occurred, and possibly with the same prospect? They have a preferred supplier and want to pay as little as possible … the type of customer you don’t want!

You place a great deal of trust/faith in your customers; the information they receive is proprietary/confidential. Trust betrayal should only ever happen once, and that customer deserves any grudge you may feel. What nonsense, there’s no point! Cut the relationship … pleasantly, clinically and PERMANENTLY. Although it goes against the grain of most salespeople, give the problem to your competitors! Don’t waste any more of your precious time or money.

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“All’s fair in love and war”, we’ve all heard that one … business is no different. It involves the passion of love, the competition of war, and the complexities of both. So it’s hardly surprising that emotions interfere. But business is primarily objective, and shouldn’t be clouded with emotional subjectivity.

Emotional grudges, and dwelling on the past, both affect the objective decision-making process essential in business. They colour peoples’ thoughts negatively, thus blocking their ability to analyse on face value and judge on merit.

Negative business events from the past must be accepted, and learnt from. Analyse what occurred to understand the signs to look for to avoid any repeats, you’ll find these signs quite obvious. As a result of your learned foresight, as a manager you’ll be smarter and stronger.

Businesses don’t hold grudges, emotional people do. And for a business to be successful and profitable, it needs effective, efficient management and staff. There is no place for grudges within ‘business’, either they are nonsense and shouldn’t exist at all, or the relationships involved are those that should be severed immediately. There are only the two categories.

PS: Any habit of making verbal agreements? How well do you know the people? Asking for trouble?

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