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Do You Need to Be Ruthless to Succeed?

Not if you want to grow a business, earn the trust and commitment of employees and customers, and create sustained bottom-line profits.

Opinions expressed by Entrepreneur contributors are their own.

In this column, I want to rant and rave about what I view as a destructive misconception affecting many businesses today. The misconception is this: that you have to become ruthless in order to succeed in business.

It seems that way when you look at how the biggest and most visible firms behave. They're tough. They're underhanded. They chop jobs by the thousands, use unreadable small print to snare customers, and hire fancy advisors to find them loopholes whenever possible. So it stands to reason that to get big like them, you have to behave like them.

The hitch is that this in not how these companies grew and earned their places in the public eye. It is not how any business grows and prospers. Ruthless behavior is what people do when they're taking advantage of someone else's careful, caring efforts to grow a brand or a business.

My friend Peter Schutz, the ex-CEO of Porsche AG, often points out that "the expression is 'give and take' " not take first, because you only grow a business, earn the trust and commitment of employees and customers, and create sustained bottom-line profits by helping others and being of genuine value to your community, not by seeing what you can get away with.

Yet executives at many of the companies dominating the headlines don't seem to understand this. For instance, I just saw news reports about the credit card company First USA, the biggest U.S. issuer of Visa cards. The company is rumored to have a new policy in which it is reducing the time some customers are given to pay their bills. Which customers are getting this time penalty? You might think it would be the deadbeats who pay late, but actually, the company is said to have decided to penalize customers who habitually pay on time. The good customers, that's right. Suddenly good customers who never pay a bill late are finding that their due-dates have moved up a week. They aren't very happy.

So why would the company do this? Because, according to news coverage at least, the company doesn't make as much money on these prompt-paying customers. It wants to be able to collect more interest and late fees, so it's making it harder for them than for other customers.

My, oh my. That's not very nice, is it? In fact, it seems as if the company doesn't care. It doesn't care about its faithful, prompt-paying customers. All it cares about is trying to find some clever way to squeeze cash out of them in a hurry. (And it better be done quickly, because obviously many of those good customers are going to be upset by the change and will probably go elsewhere.)

This kind of nasty, shortsighted thinking is perhaps the norm in big corporations, but it doesn't help a smaller business grow and prosper. In fact, caring can be the smaller company's competitive advantage. If you make a genuine effort to treat your customers well, you'll have more loyal customers--and that's a recipe for growth and profits. Same with your employees. If they feel you care about them, they'll work harder and stay longer than they might at some larger rival. This is why companies that earn their place on the Fortune 500 list gradually tend to slip off it and new rivals work their way up to take their place. The company that gets so big it doesn't care any more is always doomed to decline. The entrepreneurial firm that truly cares has a significant advantage that, with persistence, can allow it to triumph over larger rivals.

Alex Hiam is a trainer and consultant and the author of Motivating & Rewarding Employees: New and Better Ways to Inspire Your Peopleas well as Marketing for Dummies. His new book, Making Horses Drink, is now available from Entrepreneur Press and major bookstores.