Competition, people & relationships the business of relationships

Competition, People & Relationships: The Business of Relationships  Share on LinkedIn  Share on Facebook  Share on Google Plus  Share on Twitter

People often wonder what makes the difference between companies which do well and companies which lead. It’s not always just internal relationships or just external relationships – it has a lot to with how they the 2 large groups listed here deal with each other. We all know there are Business-to-Business (B2B) relationships, Business-to-Partner (B2P) relationships and Business-Client (B2C) relationships but as someone who deals with all 3 of these groups on projects, it’s important to see how they deal with each other.

Most recently there has been a great deal of a divide between Apple users and non-Apple users, there was a divide amongst Starbucks and Non-Starbucks coffee drinkers and even name brand items or their brand less product lines – I’ve often got in between these groups trying to figure out how each one thinks and then started to think of the relationships in a competitive advantage and competitive strategy perspective as a consumer and a management consultant. Steve Jobs, Larry Ellison, Louis Gerstner Jr and Bill Gates are technology business heroes of mine but how did their high level strategy work? What makes one survive longer than the other? And survive with a longer future in hand?

Using Jack Welch’s 20-70-10 rule as a reference point, we could take Apple and non-Apple products for this first example. Here’s the problem we saw with Apple the first time this happened - the Top 20% of the world corporate and consumer infrastructure took on DOS from IBM, MS-DOS from Microsoft then Windows from Microsoft. Apple computers became a “consumer” product. The middle 70%, during the return of Steve Jobs, were a large raw number but it’s not like large corporate blue-chip and government organizations were running to completely go to Apple computers and devices. In fact, a JC Penny CEO, previously the Apple Retail Chief was fired when he tried to put Apple iPad’s and iPhone’s into the JC Penny workflow only to realize that it’s not easy. This was a clear case of where a business-to-business relationship and business-to-partner relationship caused internal combustion which lead to external relationships in different areas as well. For example, the JC Penny stock price dropped extensively during this situation and the company had to find a new CEO – all over head costs if Apple could make a product which would integrate easily into non-Apple technoologies. If Apple hardware and Operating Systems could migrate themselves into Blue-Chip infrastructure without a lot of work, maybe the world would not have to rely on Microsoft or Blackberry as much. Let’s not forget the whole Adobe Flash scenario when Apple invented its own version of Flash. In my opinion, the failure to work with B2B and B2P relationships with the Top 20% might be the only thing missing at Apple. Now with Windows Mobile OS working with Windows Server OS (the OS of many Blue-Chip servers) and Blackberry Q10 type smartphones and Apple might have missed their window to take the “corporate leap” it might have benefited from.

An easier example to follow in a relationship to see where relationships matter might be with Starbucks and other coffee franchise shops. In the book “The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinary” by Joseph Michelli is a great way to see how a coffee franchise makes it a point to make customer service a top priority in a business - where a black coffee for $1.56 CND can make all the difference in the world. People who drink coffee do it regularly and do it enough that they are creatures of habit but that put aside, when your coffee shop will make it again at no additional charge if it’s made wrong to send you off smiling, even if it’s not the best in town, they won your business - now you’re telling everyone about what just happened! Point being, in this scenario, whether Howard Schulz himself or a local manager of a Starbucks right down to the barista on their first day – the customer comes first. Now I’m not saying they never make mistakes with customers, I’m saying that they just set the model for customer service across the board for coffee shops. When push comes to shove, where the world knows you’re making more money with happy customers, your distribution costs become manageably less, your need to market becomes different, you’re partners and stakeholders are all doing well not to mention, other coffee places see the business you’re getting so competition feeds off your success and makes a dollar where they can .

The last example I will give is with brand name items and the no-name products lines at the retail level. When these guys decided to use (or not use) the “Lean Business Model “ ( http://theleanstartup.com/principles ) they forgot to “Work Smarter not Harder”. Really, let’s look at where they cut cost first – they made the packaging and display (in most cases) with plain font and the generic –one-color around the whole box. It’s not like they began marketing generic products to be better or just as good product in all cases to begin with. So instead of cheaper distribution, manufacturing, marketing, advertising they killed the product where the client/customer sees it first. Craziest thing I’ve ever seen! I always see no name items but if I can get a name brand item for the same price or cheaper I always do. We’re trained to think that name brand, is not only the preferred taste but it’s functionally made ‘correctly’ which is a Logical Fallacy of its own. In my opinion, unlike Starbucks, the no name example lost the importance of B2C relationships while losing competitive advantage making their partners/stakeholders (B2P) relationships rely on sales with products that are not theirs.

In conclusion, there are many factors which divide business by competitive advantage. After reading Micheal E Porter books on competition while being in a line of work where I am asked to do these very things as a consultant or a technology contractor, it is evident that relationships are both linear and vertical. People matter and that’s the bottom line. When we do something in an organization, a small group or and an enterprise business, we effect many channels of human

capital and work flow. Sometimes one approach works somewhere in the organization where, it might not in another. The end game is where relationships and individuals can or cannot work together. If the organization is the machine, the departments are the engine parts and the relationships are the oil - only then we as people, can fuel our organizations.

Author: Randeep Dosanjh A Rights Reserved with any reference to this article in whole or in part with the consent of the Author: Randeep Dosanjh