My friend Mark owns a cow. He milks the cow. They drink the milk. He assures me that pulling harder on the teat does not yield more milk. That in fact, pulling harder on the teat leads to getting less milk. And to a pissed off cow.
So when you see a business trying to get more money out of their existing customers, rather than being gentle with them and taking care of them (“would you like some free Bag Balm with that order?”), you’ll know what’s up: someone cooked up numbers for an increase in business income (had to: would have failed the annual review otherwise), and now is trying to make it happen.
Guess what: companies can’t grow forever. They can continue forever (Cadbury chocolate anyone?) by providing good products delivered at a fair price with great customer service. Every business, like every cow, has only so much to give. Pulling harder won’t change that, and in fact will make things worse.
Attempts at diversification as the road to increased profits fits right in here. Adding elephants to the mix of animals being milked, on the theory it’s a mammal, the company already understands how to milk a mammal, etc., will not lead to good results. Goats, my friend Mark assures me, are a lot of work to milk for not much output: you have to really like feta.
Growth is a false indicator of success. For a mature business, success lies in continuing to do a really good job of continuing. That can be challenging: Mark’s cow dried up last year, so he bred her to his bull (who was a happy bull for a while), and she will deliver sometime this summer or early Fall. That’s the natural cycle. The answer isn’t genetically modified cows: the answer lies in working with the natural cycle. That requires discernment (what is the natural cycle of events?) and patient persistence (anyone who farms for more than 5 years appears to have learned this lesson).
For an interesting look at a company dedicated, it appears, to pulling on the teat harder, take a look at this account of Best Buy’s imminent demise. Take any company whose net worth is declining and you will likely find example after example. It’s so sad, and so unnecessary, I alternate between rage and nausea. It’s not that their decline affects me personally (usually: Microsoft ruined its developer programs by pulling harder on the teat), it’s that people are being hurt by greed-driven stupidity.
The contrary argument, that changes in culture, technology, etc., cause “creative destruction” doesn’t hold. Farmers are constantly changing their practices (e.g., you don’t see any big silo towers going up now – turns out those shiny, metal, glass-lined silos ruined the contents due to heat). They know that constant monitoring of what works and what doesn’t is needed. Initially, the government played a huge part in this: the Cooperative Extension offices were created in the 30’s to bring current information to farmers. Now, of course, farmers have their iPads and computers and are constantly researching best methods.
It is also sadly true that government can be bought: why else would we subsidize big farming corporations at the expense of local, family farms? Why else would we allow big farming corporations to treat animals in ways that we would never permit our neighbors to do, and for which we would be visited by law enforcement (“well, officer, putting these 100 chickens in a space where they are never able to stand is the only way to ensure profitability. Surely you can understand that, right? Oh, feeding them protein from downed cows and horses? Hey, we have to do what grows the chickens as well as our profits. Anything else would be, well, socialistic, communistic, and against the American Way!”).
It’s hard to do things the right way: if it were easy everyone would. It’s also stupid, whatever the motivation, to pull on the teat harder in order to get more, more more.
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