Tuesday, January 10, 2006

The Ethics of Furniture

Amanda is an enigma in today's business culture. Somewhere along the line she didn't get the message that ethics and morality are not defined by lines in the sand, but rather waves along the coast that ebb and tide with the complexity of a global climate. She lives by the convictions of her beliefs and they are costing the company money.

They don't want to let her go because when she has the company's money in her hands the CEO sleeps well at night. It's those gray times in between when competitors are "playing the game" to get the sale and Amanda refuses to break rules that cause all the hand-wringing.

But it's furniture... how much angst could there be in selling a nightstand? Plenty actually when there are millions of dollars at stake, egos to protect and an industry ethos forcing deception and hypocrisy at every level of the sales process.

After two decades of trying to micro-manage the retail side of the business, the best ideas manufacturers have been able to come up with are misguided policies for distribution and pricing. The policies were bad enough twenty years ago when they inconvenienced consumers, but in today's wired culture those policies are alienating the next generation of consumers and putting retailers between a rock and a very hard place.

MRP has done nothing to increase business, limiting distribution has not helped brand awareness among consumers and selective enforcement has not made manufacturers loved and admired by their dealers.

What they have done is damaged the soul of the industry by putting people into situations where they have to answer the kinds of hypothetical questions we used to only kick around in classrooms. Such as "Is it right to break a vendor's rule if my boss tells me to?" "If I know my competitor is breaking the rules is it unfair to my company if I won't?"

Every day dealers around the country are breaking MRP and distribution policies. But depending on their size and location they are either being encouraged to keep up the good work or told that if they bend the rules one more time they will find themselves cut off. It is ironic that manufacturers now find themselves faced with making the same ethical dilemas they created for the dealers. Their competitors are breaking the rules and if they want to survive in an increasingly fractured and complicated industry they have to do what they have to do.

So when a multi-store chain in New York lowballs an MRP product and sells it to a consumer in Massachusetts via email, do they cut them off? You're kidding, right? If a dealer in North Carolina gets caught giving a phone quote to a previous customer who lives in Virginia do they cut them off? Absolutely. Well, you have to make an example of someone.

And where does Amanda come in? She is the soul of the industry being corrupted by greed. Her sales manager has made it clear that the very survival of their little furniture store is at stake. Get the sale. One way or another. Go below MRP if you have to, sell to a previous customer's neighbor even if they are outside our distribution area, ask the customer to lie about being in our store within the past 90 days, send your quote via email. Do what you have to do, but get the sale.

"But... but .... but..." Amanda protests. "Everything you've asked me to do is against the manufacturer's written policies."

"Number one" the manager counters, "you're not in Sunday School anymore. Number two everyone else is doing it and we have to stay in business, and number three, do it or find another job."

Trying to protect turf by meddling in the retail process has been bad business.

Now we’re finding it's bad ethics.

Monday, January 09, 2006