In a cut-throat, low-margin, relentlessly shifting industry, is there any room for goodwill anymore?
Ask most successful and reputable channel businesses and you will hear a resounding "yes". This week, Ingram Micro's Steve Rust commented that strong relationships play a very important part in conducting business in Australia. "In the end, it's the long-term relationships not the short-term actions that get you there," he said.
But read this week's story on Data#3 and Powerlan and you cannot help but feel that the whole concept of business ethics gets thrown out the window when times are tough. What is so devastating is that, at least in the short term, it seems that those with moral principles get screwed.
Data#3 entered into a business partnership that saw two of the strongest resellers in Queensland combine to cater for the needs of what is probably its largest customer, the Queensland Government.
Hindsight has proven there were far too many loopholes in the contractual terms of this agreement. But aside from contracts, one would presume that working together in such a high-profile account, where it would clearly be a win for all parties, would involve a level of faith and trust between the partners.
That all went out the window on August 15. Theo Baker's Powerlan, once a significant force in the IT channel, must have been bleeding severely because the decisions Baker made, both in the case of XSI and QSS, had drastic repercussions for several of his former business associates.
John Grant, like Max Goldsmith at XSI, must feel "raped". His professionalism will not allow it on the public record, but one can be assured that the fiasco has sickened him as it has sickened Powerlan Qld creditors. But let it be a testament to both Grant and Goldsmith that they felt their first duty was to clean up the mess for their business partners and customers.
Grant paid homage to the likes of Tech Pacific, Ingram Micro, Hewlett-Packard and Microsoft for their patience while he resolved the matter. He called it an "endorsement of the close and constructive relationships" between the companies. The Queensland Government also maintained their faith in Data#3 -- and that is why they remain a Data#3 customer.
Grant told ARN that "nothing about this could possibly be conceived as positive". But surely this endorsement of Data#3 by its suppliers and customers at such a difficult time is encouraging.
I would hope that while Powerlan may have survived to fight another day through short-term gains, those who value their business partners will thrive off them in the long term.
I believe that those who value goodwill as a real asset, and not just one that appears on balance sheets, will build strong businesses that will survive economic downturns, a fickle stock market, and the odd business partner that fails to adhere to those same ethics.
Does goodwill still have a place in the IT channel? I would like to hear your view -- tell me about companies you work with who have put their partner's trust first, and tell me about those who have abused it. Drop me a note at email@example.com.