Emotion in US Business - Good or Bad?

This story is about the channel marketing approach to a new business. We have been successful in attracting the attention of a couple of established entities from which to propose marketing relationships. Vimo responded with a "let's talk further" and my contacts in insurance said they are ready to proceed. All that has happened is within my levels of expectations.

Why am I so positive, or better yet, so cocky, that I assumed or felt the responses would be as such? The product is very, very sound. The pricing model and the deal offered associated business is very favorable. There are a lot of dollars left on the table as it stands, and the proposal we have shot to various entities makes a lot of sense. For the amount of effort we ask, the profit is pretty darn nice!

I did get an email from a friend in the insurance business asking if we were ready to play in the realm of big business. I feel we are. None of us at Southwest Medical Bill Review & Recovery are newbies to life, business or the way the world works. The only real concern I have is being in the same room with the person who "owns" the sacred cow I slaughter.

Here is what I mean. Anytime in business, when decisions are made, someone has to champion and sell a specific process or method to their internal operation. That person is the one who has the most "ownership". The way things have been done, which are proving to be more and more inefficient, means that he or she has the most (emotional or mental) ownership of that decision. When an outsider comes in to prove, give examples and downgrade that method or decision, the one with ownership gets defensive.

The attack on the process becomes personal. No longer does this person retain objectivity in evaluating business procedures, rather, the old "owner" stiffens, closes his or her ears to rational discussion and retreats to their old position of power with which to fend off attacks.

While it would be reasonable for that person to realize things change over time, and that their pet decision, while the best at the moment, has run its effective course and now needs replacement. Unfortunately, just like a nurturing parent, their child has no problem and if anyone thinks there is, then the real problem lies with the outsider who is trying to harm my (child, idea, process, business decision, etc.).

I have seen it so many times before. For example, a very bright CFO who understands Excel spreadsheets inside out and had a lot of personal time to devote to it can write a pretty good model for cost of money/asset allocation for a financial operation. Will it do a pretty good job? That depends. Maybe. What really matters is the level of sales that person can do internally to convince upper management that a 'home-grown' spreadsheet can address all the concerns the Financial Accounting Standards Board requires. (Whether or not it can will be determined in the next audit by the Feds, OCC or whatever regulatory agency reviews them). Regardless, if after it has been approved by internal power positions, the seller will hold on to that model like a parent in a tornado!

Emotion, anger, rationalization, deceit, any and everything is warranted in order to keep ownership where it is. This is the reason why changes are so very hard to make in business. (KEY POINT). Status quo is not controversial. Change is. A procedure which is proving to be ineffective is still safer to maintain than switching to a new method or process of doing business. As a result, US business is mired in the muck and fear of change only to try to ride a dead horse, beating it needlessly.

Example: US car makers are sucking badly now. Why? They are guilty of the same thing they have been for the last 35 years, arrogance and fear. They arrogantly hold on to the concept that the US market wants a huge SUV in order to maintain our active lifestyles and fear to suggest anything but what was seen as the case. But, are Americans really that active? No, they just like a lot of leg room in their vehicles so they can stretch out and watch DVD's while moving. In reality, SUV's, with their ability to go off-road, run in the forests, deserts and back country, never get off pavement ore even out of the suburbs. The size and room of a vehicle is just bragging rights like a 4,000 square foot house with home theater for two people to get lost in so they don't have to see one another during their marriage.

The success stories are the same thirty-five years ago; Honda, Toyota, Nissan (then Datsun) and their luxury lines, Acura, Lexus and Infinity respectively. Does anyone see a trend here? What enabled the same companies to be at the lead again? Likely, the reason is these companies have been doing research as to what the US marketplace wants in an automobile. The fact Toyota of North America has a design center in Long Beach, CA is no coincidence. These companies research, ask, review, test market and seek input...NO MATTER IF IT CONTRADICTS THE CURRENT THINKING OF DESIGN OR NOT!

American car makers, as well as other US industries, are afraid to ask questions because it has the impact of change. Change is dangerous and risky. People get fired over change. And with the general fear employees have in financial stability, no one wants to put their neck out just to get the head chopped off. Raise a new idea? Challenge the status quo? Beg to have attention brought to oneself only to be seen as unnecessary and "allowed to spend more time with the family". And the reward for those who are forward thinking in a corporate environment? The opportunity to spend more time with family.

Small and start-up businesses have to be aware and fast-thinking. Fortunately, that is one of the best features of the US economy -- when slow-moving and slow-thinking corporations impede the natural efficiency of the market, new companies spring up to fill the void. Eventually, old business adopts the new processes, but without the "fear and loathing" that accompanies the changes if they were to be internally produced. The new businesses may even eclipse the old and squeeze them out, becoming the new leaders.