People my age remember a bestselling business book entitled The Peter Principle. Named after its author, the late Dr. Laurence J. Peter, its point was that people are promoted based on their past performance, not on their future potential – so people ultimately rise to a level where they are incompetent.
Whether this principle is true or not (one research project actually showed that it was better to promote people at random), I’ve observed an even more accurate principle among small businesses – I call it the PITA principle. It goes like this: The smaller your business, the more you are at risk of making a Pain In The Ass of yourself.
Here are some examples of the PITA principle in action:
If you accidentally break something while you are shopping at a major chain store, it’s often no harm, no foul. At a small store, it’s “you break it, you bought it.”
If a large business is a little slow in paying another large business, oh well – maybe they pay a small penalty eventually. If their invoice is from a small business, however, they may get daily phone calls from someone who is frantic to pay their mortgage.
When something goes wrong, small businesses can be slower to make things right, because the cost of doing so affects a fragile and personal bottom line. For example, once I used a small printer to print my business cards, and they came out visibly crooked – and when I pointed this out to them, the proprietor stared blankly and me and said, “We’d have to run the whole job over to fix that.” Well, duh.
Too often their problems become your problems. For example, I just had a major chain store install a new carpet, and I had a confirmed date, a two-hour service window, and polite installers. But with local contractors, too often it’s “Sorry, can’t make it today, I’m running behind. Maybe next week. If I can find another guy to help me.”
So does this mean that I am bashing small businesses? To the contrary, I love small businesses. I *am* a small business. But our success, our profitability, indeed our very survival depends on recognizing that the PITA principle works against us.
For me, the PITA principle means that I have to try that much harder to serve people well, make things right when they go wrong, and generally make their experience as frictionless as possible. It means I treat my clients’ accounts payable departments with patience, good humor, and professionalism.
And at almost a spiritual level, it means that I know where I fit in the world. I can’t be Wal-Mart, nor can I be the factory down the road. But I can be the best “me” I can and serve my niche.
And for you, it means examining your own business practices to take PITA off the menu. If you recognize yourself in scenarios like the ones above, understand that no matter how right you are, or how strongly you feel, you are also a pain in the ass. And probably competing against businesses that aren’t.
So whatever your market is, and whatever your business goals are, make sure they don’t get sabotaged by the PITA principle.
