I’m enjoying Seth Godin’s latest book, Linchpin: Are You Indispensable?. In his chapter on “Becoming the Linchpin”, he has a great diagram on page 52, which I’ve reproduced here. His linchpin discussion is a good illustration of the variance between price and value. I always cringe when a client reacts negatively to my billing rate (which is low for the industry). If they say, “I wish I could bill my time at that rate,” I know they haven’t got it and may never “get it.” I want to ask them what rate they pay their mechanic or their accountant. It’s a question of the value contributed, not the price paid. This is the problem with people who try to do too much tweaking on the product of a good designer… they don’t understand that they’re paying for expertise and then negating its value. Perhaps they’d rather have an expert at minimum wage?

You get what you pay for.

You got more than you bargained for.

Ever notice that phrases like these mean something negative when on the face of it, they shouldn’t? You pay for something, and you get it. Naturally. You bargain for something, and get a little extra. Who wouldn’t be happy about that?

Yet these phrases don’t mean good things. These phrases mean there’s an unanticipated shortfall in the deal, and you’ve been shortchanged in one way or another.

Money-back guarantee. In other words, if you don’t get what you’re supposed to, you can return it for a refund. This is your bare-minimum: both sides of the ledger balance out, one way or the other. Dollar-for-dollar, equivalent value.

A few weeks ago I accused bookseller McNally Robinson of missing the plot twist following their entry into bankruptcy protection. What I said was (1) that they had expanded at the wrong time, in the wrong way and (2) that they didn’t have an effective strategy for competing with online book sales.

Well, last week McNally emerged from bankruptcy protection and Paul McNally made some public comment on what went wrong, as he saw it. The biggest single factor he cites was the failure of their Don Mills store to meet the sales targets for which they had hoped. He speculated that their strategy of community involvement maybe didn’t play as well in T-Dot, but it has also been noted that the Don Mills mall in which they were located has been a disappointment to many of its retail tenants.

It’s been announced today that McNally Robinson is closing two of its stores and have entered bankruptcy protection for restructuring.

For those not in Winnipeg, it’s worth mentioning that the independent bookseller is a local success story, having started here in 1981 and grown to have stores not only in Winnipeg, but also in Saskatoon, Toronto, and New York as well as online. Many Winnipeggers have a “feel-good” sense about supporting this local option for their book purchases, and it’s a popular spot for book launches as well. Most locations also feature a (non-Starbucks) café/restaurant of some sort, the Prairie Ink Café. To be clear, I like McNally Robinson as a bookstore. The locations I’ve been in are all large with a good selection of titles and special promotion for local authors.

I’ve seen service companies sorely tempted (and I confess I’ve been there) to take on whatever work is being offered. This is how web developers become print brokers and graphic designers fancy themselves brand managers. It’s a farce. In the midst of a meeting, somebody asks whether the project can be extended to include an additional service, and the business quietly asks themselves “Why not?” reasoning that it can’t be all that hard. “Of course,” they tell the client. “We do that too!”

Call it unusual, but then again, I might be more intelligent when I’m comatose. I had a dream wherein I was listening to a woman lamenting the fact that she wanted to start a business, but couldn’t. She went on and on, bemoaning how she just didn’t know anybody and had nothing to put down in her diary except her birthday. Tears punctuated her expressed inability to start a business.

“Fine,” I said, cutting short the next barrage from her pity party. “So write down your birthday. Then write down all of your interests. Let your interests become events, and let the events become contacts. Then let the contacts become business.”

This is one of my pet peeves. When I’m paying for something — a meal, say — and the merchant’s Interac (kind of like a check card) terminal advises me there will be an additional 35¢ fee added to the transaction. Even if the bill is only $20 plus tip, this is a bit of an insult, charging me extra for my convenience of not having to handle cash — never mind that it offers the merchant this very same convenience. Yes, I know there’s an extra cost to the merchant to have the service… but I also happen to know it’s about 9¢ per transaction. If the margin on the meal can’t absorb that, they need to close up shop and go home. Most times, I’m tempted to pull out a credit card instead, and make the merchant pay 2% or more for the same convenience.

One of the greatest assets that a corporation has is often little understood or appreciated, because it’s an off-balance-sheet asset whose acquisition occurs slowly over time and is rarely managed or considered as an asset. Corporate culture is something I’m comparing to a bonsai tree… its size belies its age, value, and complexity. One can also tend to forget it’s like a living organism.

Wally Bock’s Lessons from the Rise and Fall of Delta Airlines are instructive in several ways for the negative example set by CEO Ron Allen, who squandered the corporate culture in pursuit of “the bottom line.” Unfortunately for Delta, the way to the best bottom line is often a counter-intuitive one that takes best advantage of intangible assets like corporate culture. Among the summary statements of Wally’s lessons from his example is this gem:

Back in the early days of my business career, I used to prepare insurance proposals. Of course, we always wanted to know what price and coverages we were quoting against — it was natural to want to beat both so we would be in a good position to get the order for the policy. There were a few times when we couldn’t quite beat the price the client was paying elsewhere, and as I reviewed some of these proposals with the brokerage owner, I would ask if I should try to sharpen it further somehow. Sometimes we would try, but if the rates already looked reasonable to us, he’d say, “No–if you get it on price, you’ll lose it on price.”

I’m thinking today about the benefits of having cronies. Not in the pejorative sense of the word “cronyism” but in the simple business-oriented sense of the term. Looking back over my career, I can spot a number of invaluable contributions from various friends and business acquaintances shared over a beer.

The value one can get from discussing business problems and ideas in an informal context with a few trusted colleagues can’t be overstated. This doesn’t have to be a meet-with-your-guru kind of thing, though sometimes it is done with a coach or consultant. But if you have or can find a few business owners or professionals like yourself to meet as peers and toss around ideas or pick away at challenging problems, it can be enough to keep you in the game when you seem to his a wall — and it can do the same for them as well.