The tipping point

Last week's column got me wondering: At what point does a growing business become capable of manufacturing as much customer demand as it wants? How does a small Seattle coffee shop become a multinational powerhouse that includes three locations within one and a half city blocks in downtown San Francisco? When did this company stop expanding to meet the demand of Seattle customers and become capable of brewing instant demand wherever new locations spring up? I could ask the same question of several hamburger stands and hotdog carts that went on to become huge corporations, at least two computer companies that started in garages, and many more. Many if not all of these companies made their founder rich beyond most people's imagination. This level of success is a good thing. Isn't it?

As a business coach and consultant, I measure my success by how far I can help entrepreneurs and managers up the ladder of growth. My pipe dream should be to see one of my clients rise to international tycoon status. And why not? No huge corporation that I know of could possibly have attained its current status without delivering a product that people wanted. Brew coffee that no one wants to drink, and you'll never get three stores in the same city block. Cook burgers that no one wants to eat, and you'll never be able to claim "billions and billions served" honestly. Initial customers demanded enough product to warrant expansion, which in turn fueled profits that begat marketing campaigns that begat increased demand yet further, which you get the idea. This is a good thing, right?

Most companies at this level are publicly owned, meaning that anybody can purchase shares of ownership. Most of these shares are concentrated in the hands of relatively few rich investors, but most of the people who own shares are ordinary folk. Why shouldn't they receive the most profit from their investments? How can one ask someone who has worked all of his or her life and scraped together an investment portfolio to lower her or his standard of living by accepting lower returns? And yet this relentless drive for profit at all cost is responsible for some of the worst depredations ever committed from denying lifesaving medical treatment to employing armies of workers in save-like conditions to wholesale pollution and destruction of natural resources.

Experiments such as socialism and communism have largely failed to address these issues. Some of the worst environmental damage on record has occurred in communist nations. Quality control was also a problem. For example, a chandelier factory in the former Soviet Union was judged by how many tons of chandeliers they produced each year. Result? They produced chandeliers so heavy as to pose a serious risk to anyone unfortunate enough to stand beneath them.

I am a strong supporter of capitalism and the profit-driven model. I deserve to reap the fruits of my labors. So do you. So does everyone. How does one balance the seemingly conflicting needs to earn maximum profit while doing no harm?

History proves that unfettered businesses commit unfettered abuses. Child labor, deliberately adulterated food, trusts, and the aptly named Robber Barons come to mind. The Libertarian model sounds great but is a dismal failure in practice. Regulation? Given our history, it's easy to see that labor laws literally limit the extent to which companies can exploit their workers. Given the amount of pollution and depletion in the world, environmental laws clearly limit &

but don't eliminate &

the amount of death and destruction companies can directly or indirectly cause in pursuit of profit. Too much regulation ceases to be useful and starts becoming the equivalent of accelerating with the brake on.

Ever the optimist, I believe that business and (relatively) free enterprise can yet be our salvation. A company in Europe producing airplane seats discharges wastewater that is literally cleaner than the local drinking supply. They don't need any environmental regulation. I personally know at least one company that treats its employees with kid gloves. Some of them have been there for decades, and I've yet to hear the owners complain about profits.

I define responsibility as the ability to respond. Rising profits give owners more ability to respond, hence increased responsibility.

As business owners, you, dear readers, have a certain level of responsibility to yourselves, your families, your customers and to the entire world. How can you ensure that your current and future success reflects wise stewardship of that responsibility, especially as you cross the tipping point into becoming able to manufacture demand for your products or services?

Learn how ancient survival instincts guide everything you do and how to use those instincts to your advantage. My books, "The Enlightened Savage: Using Primal Instincts for Personal and Business Success" and "Guerrilla Marketing Success Secrets" are available from and , respectively, or from your favorite bookseller.

Coming soon: "The Natural Savage" (Winter 2007) and "More Guerrilla Marketing Success Secrets" (Fall 2007).

ABOUT THE AUTHOR: Anthony Hernandez is a certified Guerrilla Marketing Association business coach with over 20 years of business and marketing experience. He lives in Ashland with his wife Robyn, son, Logan, and their two dogs.

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