Even The Mafia Can Teach Us Something

And here is where every business can learn from the mafia.

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Everyone teaches us something. Even the Mafia can teach us about business! I have always believed that there are lessons to be learnt even from the most unlikely of people, places and situations. During a recent conversation with the owner of an events' management company, I found out how one of their biggest challenges is that whenever they quote a price to a client, a competitor would quote a lower price for the same product or services in an attempt to whisk away business. She was baffled by how the competition, in its ruthless pursuit, was not only willing to work on wafer- thin margins, but often even incur a small loss, just to grab business. On a closer look, this is true for so many sectors today – from e-commerce to consulting, every business is facing cutthroat competition and the rivalries are so fierce that everyone is willing to work on almost non-existent profits. What this does, however, is that many times it ends up killing the entire industry. And here is where every business can learn from the mafia.


Let's look at two important principles that are almost fundamental to the mafia:

  • All gangs work together to maintain a basic order and don't encroach upon each other's territories. The clearly marked turfs ensure that nobody eats into anyone else's business and there is no direct conflict. Gang wars are never welcome and a strong leader - à la Godfather, usually takes charge of keeping peace and harmony. This is important as believe it or not, the Mafia really isn't always trigger-happy and does not enjoy violence as that means loss of valuable human resource.
  • The mafia can display tremendous unity when it comes to upholding this basic law. So in the off chance that someone disrespects it and oversteps boundaries, there are serious repercussions. Breaches are not excused and more often than not, the offender will have to pay the ultimate price – death. This not only reinforces rule #1, but also serves as a precedent for the future so that there are no further transgressions and life can go on smoothly for everyone.

And so it brings us to the question - if the mafia can have this sort of collaboration and value system of making sure everyone works together for the greater benefit of one another, why can't the business world?

Of course I am not suggesting anything half as dramatic or bloody as gun wars or violence, but there are ways on how we can draw from these basic principles and implement them in the business world.

While it is difficult to demarcate exclusive territories within a sector, a common understanding can be reached and observed by all for the interest of the entire industry. So for instance, in the business of event management, what if all companies were to come together and decide that they would not work below a certain minimum profit margin that is fair? And if there is a company that goes against it, it could be blacklisted by the others?

The simple logic behind this is that when a commercial entity works without profit, the quality gets compromised; it brings disrepute not only to that company, but to the entire sector and the industry as a whole loses face and money.

Today, so many industries like e-commerce are losing billions of dollars simply because they are all targeting the same customers by reducing prices. In the long run, a business is built by creating value and not by reducing profits.

For any industry to grow and prosper, all competitors should meet regularly and lay down some ground rules clearly. They should help upgrade the standards so that everyone benefits.

Collaboration and making sure the entire industry progresses is always ideal.

I must add a disclaimer though - my only experience with the mafia has been watching movies like Godfather. If you haven't already seen it, go ahead and do so now - I am sure you will learn some invaluable skills!