I was reminded recently of a story I once read. It goes something like this. In a small and prosperous village, the key business people would gather to discuss business in general and shoot the breeze. They were a butcher, a baker and a candlestick maker, and just to keep things real, the fourth player was the owner of a very successful PR company.
While sharing a round of drinks at their local pub one evening, they started to discuss the worldwide economic crisis.
The discussion became more earnest by the minute. And, at the end of the evening, having not enjoyed any of the usual bonhomie, everyone left in miserable spirits. They realised that they would need to cut back expenditure to cushion their businesses against the impending blow. They would all need to get “leaner and meaner” and this would, unfortunately mean retrenchments. And so they set about doing the necessary.
It was difficult to see such loyal workers leave, but there was no alternative, they thought. Times were hard.
The next few months were excellent months, profits were better than ever and they were all quite pleased with themselves for having averted the crisis.
They had hardly finished patting each other on the back, however, when things began to change for the worse. As retrenchment packages started to run out, sales began to drop.
Fewer and fewer people could afford to buy the baker’s bread and the candlestick maker’s wares. The lack of demand had forced the butcher to increase his prices to the point where meat had become a wealthy man’s commodity.
The pressure on the bottom line had caused further cost-cutting and all the businesses had no alternative but to slash their PR budgets, and so, unfortunately, the PR firm had gone out of business. Starving, angry and unemployed villagers took to the streets and began looting the shops.
A very unhappy state of affairs had occurred, because everyone failed to see a fundamental truth – that one man’s employee is also another man’s customer.
There is a great deal that we can take from this simple tale. Firstly, don’t fall into the negativity trap and panic. Don’t react unless it is necessary.
Secondly, no business can afford to look at themselves in isolation. Every decision has a knock-on effect and we need each other in order to survive. The survival of your suppliers is critical, and so is looking after your customers. Often, this amounts to the same thing.
The allegorical tale has a punchline with a South African sting; if too many retailers continue to import their goods, rather than buy them from local factories, they are, in effect, orchestrating their own demise. The reason? Because the workers in their factories, and other factories, are the customers of their goods.
