Page Title

Pushing the Envelope

All the way to the top by Harvey Mackay

Book excerpt--Chapter 1 : May I have the envelope please?

I get all my best lines from the movies, which is where I learned to quote Michael Corleone, supposedly quoting Machiavelli, saying "Hold your friends close and your enemies closer."

Rat-a-tat-tat.

Well, my enemies-those low-rent hounds who are always underbidding me-- must have seen the same movie, because they are wise to my ways. I try to buddy up to them at all the envelope conventions, but they aren't having any.

How can you rat-a-tat-tat them if they always keep their distance?

So, I make it my business to concentrate on my first part of Michael's homily, and stay close, very close, to my friends.

When Ingemar Johansson fought Floyd Patterson for the heavyweight title in New York four thousand years ago, I was still wet behind the ears and the only guy at ringside without a six-dollar cigar in my mouth and blonde on my arm. My guest was a machine supplier, so I could be the first kid on the my block to get my hands on his new high-speed envelope machine.

I also took care of my buyers. I entertained. I gifted. I schmoozed. I laughed in all the right places.

There are a lot reasons why. When the buyer likes you:

If you mess up, and I do occasionally, as do we all, you have a deposit of goodwill to draw against. You will get a second chance.
When your buyer's company has some big new policy change, the buyer will try to find some way to keep on doing business with you even though he has to cover his backside to show conformity to the big new policy change.

Here's what happened to me at Fortune 500 company in Minneapolis some years ago. If it happens to you , you might consider employing the fabled "envelope trick."

The policy change: cut costs. Slash prices. Squeeze those greedy vendors till their stony little hearts bleed and their squeaky little voices cry out for mercy.

The directive to the buyer: all paper, packaging, and printing contracts had to be bid out. No renewing of any contracts whatsoever. Freeze 'em. Tweeze 'em. Tease 'em. Squeeze, squeeze, squeeze 'em.

There were four bidders. I had had the business for 10 years. Ed, the buyer, and I were friends.

And, being the sole supplier every year, I had made it a point to know everyone up and down the ladder, from the vice president of purchasing to secretaries to mail room personnel. I was good old Harvey, spreading good old goodwill and cheer to one and all.

So, not having put all my eggs in the buyer's basket, I had a network throughout the company. I worked it to find out who the three bidders were.

This helped.

I was able to make some very constructive suggestions on how the specs should be drawn up.

This also helped.

Keep in mind, there were still limits. Even though the buyer wanted me to wind up with the business, this had to be an arm's-length transaction. My competitors were no fools. Any hint of collusion and they would cry foul. And they, too, had their pals within the organization.

There were eyes everywhere to see to it that the big new policy change was observed.

Rule: there would be no second looks.

Rule: no chance to change my price.

Rule: no seeing the competition's bids.

Ed was not about to jeopardize his job for me. I didn't expect him to. But he gave me one edge, a very big one. I was to be the last bidder in.

I prepared four envelopes. Each contained a bid:

a down and dirty bid, leaving the gunnels of the good ship Mackay about one-fourth of one inch above water line. If I had underestimated my costs by one extra pot of glue, I'd be sunk. I prayed I would not have to use it.
A modest down and dirty bid, about three inches above the waterline. A couple of good waves would swamp me, but at least I could make it to shore on calm seas.
The same price as last year's contract with no price increase. Business as usual.
A 6 percent increase, which reflected two paper-price increases in the past 12 months. This was still a fair price, given the boost in the cost of my raw materials, and the buyer would have given it to me if he had not had to get four bidders, but….

As we in the bidness world all know, competitors have this nasty habit of trying to buy their way into a new big account one year and worry about keeping it the next. So I was a realist. There was a good chance one of those three bums would underbid me.

So, now I am armed with four bids, not knowing which one I will play. I put bid A in the top of my briefcase, bid B in the bottom of my briefcase, bid C in the left inside pocket of my suit coat, bid D in the right outside pocket of my suit coat.

Time for my summit meeting with Ed. My goal, of course, is information.

We reminisced about 10 years together, years of fun and fellowship, service and self-sacrifice...how in the early days, before I could afford a truck, I used to put his envelopes in the trunk of my car and deliver them to him personally. How we opened up the plant on Saturdays and Sundays to fill his orders. How we waived overtime charges when his budget was tight.

Keep in mind, that as I do this jolly reprise, I am running a CAT scan over every inch of ed. My main focus is to try and read his tone of voice and his body language to detect any hint as to whether, and how much, the competition has chopped me up.

Though Ed knows exactly what I'm up to, Ed is his usual warm friendly self. Nothing has changed in his manner. No better. No worse. Nothing has changed.

In Ed's mind, he is not helping me that much, just schmoozing and batting the ball around. Ed discloses kind of harmlessly that competitors aren't including the paper price increase in their bids, but on the other hand, didn't try to slash their way in either.

So now I know that there will be no price increase. D is dead in the water. Even though my competitors were hit with the same exact paper price increase I was, they decided to eat it in hope of underbidding me. I know which bid to submit. Its C. I reach for my left inside pocket and turn in my bid. I get the order. Ed's integrity is intact. So is my account. Someday maybe I'll be skillful enough to apply the second half of Michael Corleone's aphorism about keeping close your enemies. But in the meantime, I'm going to continue to concentrate on staying as close as I can to my friends. They sure can help you if they want to.

Mackay's Moral: the reason you always dance with the one who brung you is 'cause when the party's over, you may need a ride home.

My advice--read the book!