Chapter Nine: Finance; September 21
If anyone is poor among your fellow Israelites
in any of the towns of the land the LORD your God is giving you,
do not be hardhearted or tightfisted toward them.
|How Can a Business Care About People More Than Money?|
The new truck battery was heavy. The customer carried it out to his pick-up in the parking lot. He refused to have mechanics install it and was a jerk about it. (Men can sometimes get irrational about their rides and their women.)
The battery slipped out of his hands and cracked open in the parking lot. He stormed back into the garage and demanded his money back.
“Why?” the Service Advisor asked.
“Because I’m not happy.”
We stared at him.
His face was getting red. “I want my money back,” as he pointed to the motto painted above the door.
“Satisfaction Guaranteed or Your Money Back,” was stenciled over the Sears, Roebuck & Company entrance.
He got his money.
Your Business Professor once had Sears as a National Account. This means that I was a sales guy whose only customer was Sears.
Every business consultant and academic will preach that we should love our customers and treat them like family and friends. Business as a force for good communicates that, “I Care.”
Julius Rosenwald was Chairman of Sears until his death in 1932. He earned his company widespread trust selling through a mail order catalog to remote, rural customers. He said to, “Treat people fairly and honestly and generously and their response will be fair and honest and generous.”
Rosenwald insisted that the company’s primary goal must be responsibility to the customer. He established the “satisfaction guaranteed or your money back” pledge and conducted his business dealings by the creed “Sell honest merchandise for less money and more people will buy.”
Under Rosenwald’s direction, the business positioned itself as a direct extension of the farmer’s eyes, ears and wallet, making purchasing decisions in the best interests of the farmer. (Sears 2014)
Sears had changed the way commerce was conducted and it had a surprising result. Management Guru Peter Drucker writes,
[T]he age-old concept of caveat emptor had to be changed to caveat vendor—…the Sears policy of “your money back and no questions asked.”
Customers, I am given to understand, actually return less merchandise to Sears than to most of the large American department stores—it’s the basic policy and what it expresses that makes the difference. (Drucker 1973)
Jack Welch would promote a similar concept in his book Gut, “I always tried to leave some goodwill on the table when the seller’s ongoing involvement was important to the company’s success.”
Goodwill is hard to measure on financial statements; it is even harder to measure in a budget.
Drucker reminds us of the challenge,
The late Nicholas Dreystadt, head of Cadillac and one of the wisest managers I have ever met, said to me once: “Any fool can learn to stay within his budget. But I have seen only a handful of managers in my life who can draw up a budget that is worth staying within.” (Drucker 1954)
A worthwhile budget has to have a heart. Business writer Joan Magretta, records that Robert McNamara was the consummate facts and figures man. He was Secretary of Defense during the Viet Nam War. Before that disaster he,
…led a team of Whiz Kids who “brought a management-by-the-numbers approach to the Ford Motor Company.” This form of finance was conducted by bean counters; a derisive term that “has become a permanent part of our language, referring to those who use numbers without understanding their significance.” What Management Is: How it Works and Why It’s Everyone’s Business, (Magretta 2002)
A budget must include care. The poor customer is like family who is enriched by our company.
The customer may not always be “right” but the customer must always be happy.
If anyone is poor among your fellow Israelites in any of the towns of the land the LORD your God is giving you, do not be hardhearted or tightfisted toward them. Deuteronomy 15:7