Paying For Your Mistakes Can Be A Good Investment
As an Olympics junkie, I attended every summer Olympics for the past 36 years. The U.S. was playing Argentina in a key basketball game, and I had arranged to meet one of my good customers there. I told him I had good seats to the game. When we got to the arena, I was flabbergasted. Instead of having seats close to the floor, they were sky high in the nosebleed section. Sheepishly, I excused myself, promising to be back in a few minutes. I worked my way down to the first 10 rows and found a couple college kids. I approached them with the following proposition: I pointed to where my seats were and asked them if they had any interest in swapping tickets, if I gave them $100 each. They jumped at the offer. I was happy. My customer was very happy. And the kids were very, very happy.
A few years ago, I attended a trade show in Los Angeles and on a free evening had invited 25 customers and potential customers to join my wife, Carol Ann, and me for dinner. To ensure camaraderie, I rented a bus and was told the restaurant was five to 10 minutes away from our hotel. After 15 minutes of driving around, it was apparent the bus driver was lost, but we spent another 10 minutes looking for the restaurant. I finally told the driver to pull over and stop the bus. I got off the bus and hailed a cab. I gave the driver the name and address of the restaurant, and he acknowledged he knew how to get there. I told the bus driver to follow us to the restaurant, and jumped in the cab. The spouse of one of my guests, a Harvard professor, told my wife: “My gosh, I wish my students were this resourceful.”
Business people are trained to think that there’s something not quite right about buying their way out of hard-core business problems. Doing business should always be done with ironclad financial models. The trouble is that problems creep up that aren’t so neat and easy to solve. Here are three cases we’ve run into at MackayMitchell Envelope Co:
The customer is a stickler. The business is small today, but with pretty good potential. You deliver the printed goods but they are unhappy with the quality, even though you know their demands are unreasonable. They want the order run again and you can’t manufacture it at any better quality if you re-run the job. The only way it can be improved is to use a different process of printing, and you will lose your shirt if you do it that way. Voila! Buy your way out of the problem and eat the extra expense — once.
You blow the date. You are late on a key delivery, and the customer’s mailing is dated. You’ve probably jeopardized the results they were expecting. Step up to the plate and offer a huge price reduction, which will approximately make up for their lost orders. Yes, it hurts you financially, but you probably have saved the customer, plus maintained some goodwill.
Stick with your own bad numbers, especially if you have told them to a customer. You have quoted a new customer a price. This company has a lot of purchasing potential. Unfortunately, you made a mistake, and your estimating department relied on your numbers to green-light a project that should have been a “No Go.” What do you do? Again, buy your way out. Don’t make excuses. Be candid and frank about the problem with the purchasing manager and graciously say we honor our price given, even though it was a legitimate mistake.
Facing the results of a huge mistake, many people will stop dead in their tracks, too emotionally drained to see that any problem that can be solved with a checkbook isn’t really a problem, it’s just an expense. Once the mistake is recognized, what’s lost is lost. Don’t freeze. Act. If you can buy your way back on the right track, do it. Quickly.
Mackay’s Moral: If you can afford to buy your way out of a problem, you don’t have a problem. You have a solution.
Harvey Mackay is president of Mackay Envelope Corp. and a nationally syndicated columnist.
WBJ Web Partners
Most Recent
Most Recent
0 Comments