Most likely, if you’ve been following the news at all, you have heard of various scandals and muck-ups, including long-undiscovered sexual abuse by political leaders, allegations of bribery in international soccer, and (for Canadians), abuse of expense account claims by senators.
The stories make for disturbing reading, but I know of even more disturbing stuff that either hasn’t received much media attention, or none at all. For example, there’s a “money manager” on the US east coast, who, after serving a brief sentence in a federal minimum security prison, has engaged in various stock market promotion initiatives that have the distinct odor of pump-and-dump schemes. He lives in a mansion and has decided to complain about his tax assessment because local authorities believe he isn’t paying his fair share of municipal taxes.
In our industry, the bad apples generally don’t get away with ill-gotten activities for too long. The most disturbing situations occur when a previously good contractor heads south in his business practices, perhaps out of desperation. Maybe a job or client went wrong, and cash runs short, so he needs to make up the difference, and shortchange others. Usually these stories end sadly, painfully, and in the (civil) courts. Construction lien rules provide some theoretical security for subcontractors and suppliers but these provisions only can go so far. There can be a domino effect of failures, one after another.
There is a disturbing inverse correlation between effective marketing and business ethics, I’m afraid. It doesn’t need to be this way. Ethical businesses can market their services properly and, done correctly, earn substantially higher revenues for the same amount of effort.
However, the fact remains that ethical businesses can often live quite well on inbound referrals and word-of-mouth reputation. They may shortchange themselves some business and be more vulnerable to downturns than well-marketed businesses, but they can survive. We all know of the tradespeople who are really talented but price their services more as a vocation than a business — and they have unlimited work until they get to the point where they want to grow the business, and then run into the problems from their under-pricing.
On the other hand, as I’ve reported in recent postings, there are sad stories of construction businesses who have or are failing, but haven’t rushed to revised their sales message/websites and are, in the current context, making assertions that are downright false. In the end, they will go down the tubes, but they will take some people with them for the negative ride.
I wish I had a good answer to this conundrum. Frankly, I admit I am always more wary of dealing with businesses where I sense “marketing” is happening — either through advertising or direct sales solicitations, or where everything looks slick, nice and truly wonderful. Are these organizations hiding something behind the surface appeal?
The other side of the story, fortunately, of course is that truly ethical businesses also can market quite effectively and these organizations really do well in the long run.
Here’s a blog posting that explains the problems where there is an inconsistency between the marketing message and actual business practice. Remember, good marketing cannot nor should not mask a bad or unethical business operation.