“You will never, yes, never, earn real money making superior products.” Wallace was the last of his generation, one of the last to serve as chief executive officer, president and chairman of the board. He was five feet nine inches tall, on the plus side of 300 hundred pounds, clean shaven with a close-cropped “Friar Tuck” ring of silver hair. His navy blue chalk-stripe, three-piece wool suit was more of a uniform than a preference. Black socks and wingtips finished off a look that had not changed since his first days as a middle manager in a company that would eventually grow to an annual five billion dollar multi-national corporation.
He was an imposing man, visually, intellectually and passionately. He was tenacious and focused, he was competitive and generous. If you worked for him, you worked milkman hours at one end of the day and the cleaning crew’s hours at the other. If you shared his commitment to that kind of work ethic, you earned his attention and his loyalty.
His ideas on how to run his corporation were simple – for some, too simple. When asked by a Wall Street Journal reporter how his company was able to increase its profits almost 15% for thirteen years in a row with over 400 different earning centers in almost 300 different markets in over 42 countries, he said, “Don’t be stupid. The company doesn’t grow 15% each year. Each profit center does. We acquire good businesses, managed by smart people – most of whom started those businesses – and we help them do whatever it takes to succeed. Sometimes it’s just providing growth or expansion capital, piggy-backing existing distribution systems or just lending them a few talented bean counters.”
His ideas about quality and superior products were just as simple and just as controversial. When he said, “you will never make any real money making superior products,” he was not being crass or cavalier. He was just being practical. Wallace asked, “Can one taste the difference between a five dollar bottle of wine and a fifty dollar bottle? Probably. Can one taste the difference between a five hundred dollar bottle and a five thousand dollar bottle? Probably not. Even those that can appreciate the difference may not be able to afford it.
“What good is it to make the best stereo speakers in the world, using superior design, workmanship and materials, if only one person in a million can both appreciate the sound it reproduces and can afford the expense?”
On the surface, Wallace’s practical, straight-ahead philosophy may seem harsh, even cynical. If that’s your interpretation, Wallace would say you’ve gone too far. You’ve simplified too much.
Along with his belief in the futility of pursuing the goal of making superior products is the equally “stupid” task of accepting substandard performance from inferior products.
Cutting manufacturing corners to reduce costs that result in making shoddy products with the hopes of selling them in large quantities for mass audiences of sheep who can be manipulated by clever advertising is also “stupid.”
If you can only sell a product once, it’s not worth making. If it has a poor flavor or a part falls off or the performance is inadequate, the chance for a second or third sale doesn’t exist. This is where the man’s ideas really shine.
If money were not a factor, most manufacturers would make a superior product. It’s just human nature and good business to do your best. And, if money were not a factor, most customers would select what they perceived to be a superior product. Again, it’s human nature to want the best for yourself and your family. But since money is always a factor in both the manufacturing and purchasing process, what we are left with is a sliding scale called value. Finding the highest performance for the lowest cost is not only successful for the customer but for the manufacturer as well.
Of course this idea doesn’t belong just to Wallace and it’s probably not a new one to you, but like most very simple ideas, it gets overlooked from time to time, and sometimes misunderstood or forgotten.
No reasonable consumer above the age of nine expects something for nothing. We know that real diamond rings are not accidentally hidden in boxes of Cheerios. We also should have learned by the time our skin started to clear up that most of our purchases are driven by our own personal definition of value. We make choices on how much we are willing to pay for what we really want.
How your customers perceive the value of your product or service is determined by two assumptions: that the cost is reasonable for the level of performance promised, and that the choice of product will reflect the intelligence and good judgment of the purchaser.
An intelligent and active communication program can prepare, package and present your products in ways that acknowledge and support your customer’s judgment and participation with your company. It reinforces product and brand loyalty by defining and articulating your customer’s values and those of your organization.
This is not manipulation or misrepresentation. It is the ability and the willingness to put your product in the best possible light without distortion or deception.
Communication that represents who you really are and what you stand for will position your company and its products for all of your customer audiences as an organization of value and values.