Service Is Our Business chapter 3

THE significant point in the following story is not that it concerns a late president of Rotary International who had many important interests and distinctions, but that it is the personal experience of one who had his business on the main street and who had a competitor. Let him tell the story in his own words:

“The thought came to me many years ago. I don’t have to hate my competitor. There was a certain fellow I had been fighting with for years, and I thought of course he must be a chiseler. His only fault so tar as I know was that he chose to make his living the same way I did, but at that, he seemed like a terrible fellow.

“Then a thought came to my mind. Somewhere in Rotary somebody gave it to me. I called on him. We sat and had a chat. He turned out to be a rather decent sort of fellow. The first thing you know, we began to talk freely wherever we would meet. Then it happened that he had a great tragedy come into his life. One of his children was taken ill and died. He came over to me and said, ‘I don’t know how I want to do this thing. I wonder it you would come over and preach the funeral sermon for my little girl;

“I was his enemy! He was my enemy! He was the fellow I thought I had to hate. We became very good friends. He still competes with me. He still gets all the business he can—but I like him just the same!’

A rather similar transformation occurred in the central business district of a city in Chile, where trade was suffering from the bitter feuds of rival merchants. Under the influence of Rotary, some of these merchants decided to go more than half way. They called a meeting of all the business men in the district and got them to agree to a few very simple principles. As a result, the ruthless rivalry, the unfair practices, the defamations of character and products, ceased. Cooperation became the watchword even to the extent of joint advertising in the newspapers. The principles which they agreed to follow were very simple.

“Cultivate the friendship of men in the same business or profession;

“Beware that these friendly relations do not lead to price-fixing;

“Bar the imitation of brand names and the luring of employees from rival businesses;

“Do not ask in friendship what you would not ask in an impersonal business way;

“Forget the word ‘competition’ and use the words ‘trade relation.’ “

Whether the word “competition” is used or not, Rotarians generally would not wish to give up the invigorating effects of healthy business rivalry. Personal freedom and practical efficiency alike are fostered by competition. Business has to keep on its toes to survive. The customer has free choice where he will bestow his patronage. Better values, higher quality, lower prices court his approval. A multiplying range of choices is made available to win his favor.

The practical business or professional man will not shrink from a rivalry that does so much to improve service. Rather he will regard his competitors as fellow-players in a great game, mutually interested with him in keeping the rules and improving the play, just as necessary to his real success as his employees, or his suppliers, or his customers.

Such would seem to be the attitude natural to a believer in the virtues of free enterprise. Yet how often a very different feeling prevails. The Negro, in his inimitable fashion, put his finger on it. His song, “Everybody Talking ‘Bout Heaven, Ain’t Gwine There,” recalls that everyone talking about free enterprise does not necessarily believe in it. Some deep feeling of insecurity establishes barriers between competitors who could help each other and their community by their shared wisdom and enterprise. Grudges and suspicions develop that never receive honest examination.

Or a certain embarrassment and wariness is felt in the presence of competitors, unspoken—unconscious, perhaps—but thwarting any real confidence. This last experience is so common, that the question often arises whether competition is really a blessing, or a curse.

Is competition a blessing or a curse? Rotarians who undertake their vocational service as a practical program for their daily business and not merely as an occasional gesture of self-sacrifice, should be quite clear in their own minds about the right answer to this question. Important consequences are sure to follow from the decision as to whether these craftsmen, in the same business or profession, are friendly allies in service or inveterate enemies.

The issue was put in sharp focus recently in an address to a Rotary conference meeting in Bangkok, Thailand. After establishing himself as one who liked vocational service and had indeed become “a permanent member of the vocational service committee,” the speaker declared that “it is extremely difficult to apply the principle of ‘love your enemy’ which is advocated in one of Rotary’s well-known publications. Frankly, I find it is impossible! I put it to you that this is one of the unworkable requirements of the Rotary movement. I think that in this instance, Rotary went too far. A businessman will find himself in a position where he should in fact endeavor to liquidate his competitor. After all, where is his first loyalty? Is it not to his firm, to his employers, to the people who pay his salary? If he is completely on his own in business, he must look after his interests, his wife, his children, his dependents.

I would not stab a man in the back on a dark street. I wouldn’t do that because I am a Rotarian. But I would face him and stab him—I would do that. I know this is a brutal illustration, but I am trying to tell you, fellow Rotarians how I feel about competitor relations. To put it on a higher plane, I would say that where Rotary would be useful is in the method of liquidating a competitor. I am prepared to discuss that and I am prepared not to use methods which I feel would be unethical. But I’m afraid that I am not prepared to discuss the pros and cons of whether I should liquidate my competitor, because if I feel it is in the best interests of my company I will try to liquidate him although as a Rotarian, I will restrict myself in the method I use.”

The fact that these remarks provoked a lively discussion at the district conference suggests that all who heard them were not prepared to agree with the speaker. Yet he had performed a useful part by calling in question a Rotary principle. Nothing should be sacred in vocational service if it is to escape bland hypocrisy and exercise an effective influence. Before concluding, however, that realism dictates the liquidation of a competitor, even by highly ethical methods, some thought should be given to the blessings of competition.

To argue that competition is a curse is to take a dim view of life itself, for in a sense, all people are competitors. All sellers compete for the consumer’s patronage. All buyers are in competition for the best products. That everyone is competing for his job with everyone else was illustrated by a vocational service program in which the competitor relations within a college faculty were discussed. “We need someone to keep us on our toes,” declared a Rotarian editor. “That is where a fast-stepping competitor helps us. He makes us put forth that extra effort which wins. Should we hate a man who helps us to win?”

The Sherpa porter and the New Zealand bee-keeper who conquered Everest proved that life below can also be fine and the spirit of man magnanimous. Tempted by the little-minded to claim that he had reached the summit first, the Sherpa porter replied: “We went together. We were tied together. No man’s single effort can put him on top of the world.”

That competition is a blessing, on the other hand, is confirmed constantly in the growth of business communities. There is the classical instance of the department store in Chicago which sold adjacent lots to a competitor in order that a great shopping-center would arise to benefit both of them. The same idea motivated the Rotarians in Mississippi who helped to rescue a competitor from bankruptcy because they did not want to see an empty store on their main street. The Denver florists, likewise, who rushed equipment to help a rival whose greenhouses were destroyed by fire, were loyally sustaining a competitive relationship that had proved profitable.

It competitors help each other, consult about their business problems and methods, share their trade secrets for the benefit of the consumer, surely they are blessed by the knowledge that their business is being built on firm foundations. The nervous feeling that the other fellow has something up his sleeve diminishes. Energy is released for expansion.

Hydraulic brakes had been in use on a certain make of car for a year when it became known that another manufacturer planned to install them. The pioneer firm promptly phoned its rival to the effect: “We have had a year’s experience and our brakes are just about perfected. Why don’t you send your engineers over here and check what we’ve done before you go further with your plans?” How many lives have been saved through this sharing of a trade secret? Was it not good business, too, for all manufacturers using hydraulic brakes to make sure that they were built and installed according to the best experience available?

It competition is regarded as a curse, it is logical then to defame competitors, use “cut-throat” tactics to drive them out of business, and to seek to establish a monopoly. Such destructive tactics would be very short-sighted it competition is proved to be a blessing. Experience teaches that there is seldom a victor in a price war, even though it may be hard to persuade of that fact the customer who is lured by “bargains;’ “cut rates; ‘and “economies’.’ But even the customer may be convinced that the offer of something for nothing should always be viewed with suspicion. Some Peter somewhere is being robbed to pay Paul. It may be the sweated labor that produced the bargain in the first place. It may be the dealer who absorbs the loss. It may be the manufacturer who sees the hard-won value of his trademark debased.
Or it may be the customer himself who loses, through his other purchases outrageously over-priced —losing what he thought to gain from the “loss-leaders” that lured him into the store. As the realization dawns upon him that someone is being robbed, the customer loses his respect for business as a whole and for the price-cutter in particular.

On the other hand, agreements among competitors to allocate production and raise prices originate usually from the conviction that competition is a curse. Evidence against the long-run profit of such restrictive arrangements is overwhelming. The Brookings Institution estimated that during the twelve year period between 1922 and 1934, the vast total of 248 billion dollars worth of goods could have been produced in the United States had it not been for these and similar restraints upon production. A loss comparable with the cost to the United States of the second world war is therefore traceable to the widespread conviction that competition is a curse. Yet think how many of the parties to these restrictive arrangements were ruined in the disastrous cycle of inflation and world depression that marked this earlier “post-war period;’

And to this day—despite the extraordinary improvements in technology, scale of production and efficiency, evidence of similar restraints on competition can hardly be disguised. Instead of lower prices that might have been expected, inflation that creeps if it does not gallop is the rule in many parts of the world. Gains from increased efficiency have fattened wages and profits, government payrolls and arms budgets at the expense of that forgotten man—the ultimate consumer. Too often, price maintenance with restricted output is preferred even though it results in unemployment and idle equipment.

Without exaggeration most of the dishonesties and weaknesses that afflict business in all lands are traceable to the open or secret conviction that competition is a curse. Because of it, great industries cower uneasily behind protections of many kinds, service is cramped by fear, craftsmanship by ca’canny.* What a wonderful opportunity for Rotarians in any and every community to open the windows and admit a bracing breeze of common sense and courage dispelling these miasmas that choke free enterprise, proclaiming that competition is not a curse, but a blessing; that their competitors are not insidious foes, but comrades in service.

If there is a prevailing feeling of cold suspicion, it is the first step that costs the most. “How much I hate that man;’ Charles Lamb once exclaimed. “Hate him?” asked his friend. “You don’t even know him;’ “Of course I don’t know him;’ Lamb answered. “If I knew him how could I hate him?” And so with competitors—what common-sense reason is there for hating or fearing men who are grappling with the same problems, who share the same background and training, who have chosen the same job of social usefulness? How much can be gained by going more than halfway to win their friendship and co-operation.

Dear Enemy — perhaps the deepest reason of all for regarding competitors in this light is rooted in the very nature of life in all its forms. A farmer who had won many blue ribbons for the corn he grew, made a practice of sharing his best seed with his neighbors.

“How in the world can you afford to do this?” he was asked. “Your neighbors are entering corn in competition with yours at the fair each year. Yet you help them with your prize seed” Said the blue-ribbon corn-grower, “Why, that’s very simple. If I want to grow good corn I must help my neighbors to grow good corn, too. The wind picks up the pollen from the ripening corn and swirls it from field to field. If my neighbors grow inferior corn, the quality of my own will suffer. If I want to grow good corn, I must help them grow good corn, too”

The blue ribbons in all businesses and professions are won by those craftsmen who do not fear the bracing winds of competition.

What steps have you taken to co-operate with your competitors

to improve your common service to society?