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February 01, 2012 at 07:00 PM
The benefit of having large clients is apparent to everyone. Large clients carry prestige, bring assets and generate a lot of income for the firm. And often they provide access to inner circles that contain opportunities for more large clients.
Large clients also bring their share of pain, however. The attention they demand can strain your resources and crowd out your bread-and-butter business. Further, catering to outsized clients can disrupt processes that were not designed for working with them.
Worse yet, large clients with unpleasant personalities often become even more wretched when they gain more wealth or power. Such clients are inclined toward rudeness and unreasonable expectations. Instead of a partner, they seek a 24/7 nursemaid. They tell you who to hire and who to fire. In their minds, they are always right. They have no interest in your explanations, and even less interest in working with members of your staff whom they deem beneath them. How often must you suck up the abuse, or tell your staff to ignore the tyrant’s words because the client is too important to the firm?
Beware: Your associates are taking note. They may become disillusioned seeing you cater to the large client at the expense of their dignity and their pride in their work. They may come to view their career with you as just a job, not a mission. What once was loyalty becomes fealty. This insidious development ultimately will undermine the culture of your organization. No amount of income from a single source of business can mend that breach.
Tales of Woe
Over my lengthy working life, I’ve met and worked with scores of wealthy and powerful people, most of whom exemplify courtesy, respect and passion. But from time to time, I’ve endured real schlemiels (insert your favorite expletive here), whose character flaws grew with every increase in position and money. Their nasty personalities suck your spirit, incite your ire and often force you to retreat in the face of their bullying. Whatever their manifold reasons for being schlemiels, their ability to torment others exceeds their ability to do anything else.
Two examples come to mind that illustrate the dilemma of a firm becoming overly dependent on a single big source of income that does not align with the firm values and model. In both situations, the giant client wound up causing harm to the business.
In the first instance, the outsized client authorized the staff of the firm to execute a specific transaction. Once completed, the client apparently had a change of heart and asked the CEO of the firm to unwind the request after the task had been completed. This was going to cost the firm money so when the CEO balked, the client responded in a hostile voice that the staff member had made an error and the firm should make good or it would cost them his business. While the documentation clearly supported the staff member, the CEO acquiesced and reimbursed the client.
In the second instance, the head of an advisory firm jury-rigged a client management and reporting process to suit the very large client. The manual nature of this unique approach meant the firm’s staff had to work extra hours, and it also resulted in more errors and a slower response time to the client. When the client complained, the managing partner of the firm called his staff on the carpet for angering a major source of revenue to the business.
While neither situation typifies ultra-wealthy or powerful people, they do highlight common circumstances in which the leader of a business puts himself in a bad spot between the demands of a client and the values and beliefs of his employees (and probably himself).
