Profit is only a side effect

Prologue

A meter-long tabletop of American walnut, brilliantly polished, its veneer shining icy cold. Around it, elegant, chrome-flashing conference chairs. Harsh light from expensive designer lamps mercilessly highlight every impurity and unevenness in your face. If you are looking for coziness, you are in the wrong place. Today is not about coziness, but about business - and revenue - a lot of revenue and a lot of profit.

Three men are sitting on one side of the table. All three are wearing suits with "bk" badges pinned to the lapel. Two of the men are executives of the bk Group whose headquarters are in the tranquil village of Endsee in Franconia. The third man is me, founder and CEO of this company, which specializes in turnkey shopfitting and interior design for hotels, restaurants, car dealerships, showrooms, and shopping centers.

Sitting across from us are three more men, also in suits - our hosts. It is January 2013, and we are in a large meeting room of the European headquarters of a world-famous American retailer from the entertainment industry. A team of bk Group specialists has just built three hypermodern stores for this client. The stores were built and designed to showcase the exclusivity of these expensive products. The client is extremely satisfied with the new stores and has decided to commission us with 15 more this year.

So, the prospect for splendid revenues is tantalizingly close at hand, revenues which we could really use. But of course, there is a catch, one that I am quite annoyed about. And that is saying something, because I very rarely get annoyed.

Suddenly, the head of the International Shopfitting department interrupts my thoughts with, "Mr. Wolfarth, are you interested in another commission?" He is a slim, nearly two-meter-tall middle-aged man with dark slicked-back hair. He continues with, "and if yes, what does your time-line look like?"

I take a deep breath and stiffen my spine to prepare for what will come next. Sitting just beside me to my right is the project manager responsible for our last commission and I know he might just kill me for the decision I am about to make. The amount of effort he invested to realize the first three stores was incredible.

I respond with, "We would love to build more stores for you, under one condition." I take a strategic pause, and notice out of the corner of my eye that my colleague, the department head of shopfitting, is looking at me in open astonishment. I continue, "The condition is that from now on you and your team will treat my employees as equal partners, fairly and respectfully. They are neither your errand boys nor your doormats. Otherwise I don't see how we can work together on any further projects."

I can distinctly hear our project manager take a sharp breath. And while I was speaking, I observed my counterpart's face slowly turning beet red, his temporal veins throbbing.

No sooner had I finished than he jumped up from his chair, tipping it over backward in the process and shouted, "Well I never! Are you serious?! You want to dictate how we are to treat your staff?"

"Yes, that's right."

"Well you can forget it! If you want to work with us, then it will be on our terms! You should count yourself lucky to be asked to work for such a renowned brand as ours! Your team will be treated exactly as before."

This remark drove me out of my chair as well. And when I get angry, I can also become quite forceful. "I am sorry, but we have absolutely no interest in working with you on a further 15 stores under these conditions. Don't get me wrong, I am aware that a few million in revenue have just gone up in smoke, but I don't care. This is about one of the basic principles of the bk Group and my corporate and entrepreneurial philosophy, which I would never undermine simply to add another famous name to our client list."

"Our bk project team coworkers are tough," I add; "the satisfaction of the customer and the quality of the work is our first priority. However, during this project your team crossed a line. My employees felt badly treated, and your communication was condescending and impolite. I was even told that this went so far as to dictate when they were allowed to grab a cup of coffee at the local Starbucks. We are in the 21st century and not in the time of slavery! Clearly we have a different understanding of what partnership and fairness means."

Once again, I noticed a distinct change in the coloring of my counterpart's face while I was speaking; it had now taken on an unhealthy reddish-blue hue. When I finished, he shouted something or other about "Never in my life, have I ever!" And "Unbelievable!" and left the room slamming the door shut on his way out.

My colleagues and I looked at each other somewhat helplessly and waited. After a quarter of an hour, our choleric friend returns, his face now quite pale.

"Have you thought over your decision?" he asks, looking at me expectantly. "I believe we can still reach a mutual agreement if you rethink your demands. I would really like for you to build our stores."

"Yes," I reply, as I calmly put the documents in front of me together and stow them in my briefcase, "we have come to a decision. We will not work for you under these circumstances. Goodbye." While our former client looks on in bewilderment, we leave the building.

I know I will never forget that moment. Shortly after that drama, as we were sitting in the taxi on our way to the airport, my project manager asked me what would happen now. In the blink of an eye he had lost a major project and was out of work, and it was clear he was extremely worried. "We just lost quite a lot of revenue; how are we going to fill this void?"

"Simple." I told him. "We just opened the door to potential clients who will be a better fit for us. I am sure they will find their way to us, I can feel it. Don't worry about it."

And as a matter of fact, just one week later, I got a call from the head of construction of one of the leading European hearing aid companies. Indeed, a potential new client. He wanted to know if it would be possible for us to realize around 20 new stores for him by the end of the year. At the end of the day he became our new client, and has remained so, alongside others, many of which I have had a wonderful and successful working relationship with for the past 20 years.

Based on decades of experience with a wide variety of clients and people in general, I can say one thing with confidence: pressure does not lead to success, for pressure will always create counter pressure. You will have much more success choosing a path of partnership that is founded in mutual respect and appreciation; indeed, this is the path I have chosen for myself and my company, with much success.

My life as the businessman I am today began in March 2006, six years after I founded the later named "baukreativ Inc." This moment is characterized by the image of a thick Leitz binder landing on the meticulously maintained, expensive wooden floor in the meeting room of my local bank with a loud bang. It was filled with paper, paper, and more paper, certainly weighing at least three and a half kilos. The papers were filled with facts and figures about a prospering company specializing in turnkey shopfitting, each topic neatly organized and divided via colored strips. It showcased the image of an up-and-coming company and its founder, a career development that had only recently been presented as path breaking in the bank's glossy customer magazine in an article entitled: "The Success Story of a Model Company in our Region!"

As the binder hit the floor, my success story was in danger of reaching its untimely end. The abrupt slap the binder made as it hit the floor still rings in my ears today. With a mere swipe of his hand, the head of the bank's credit department pushed my file to the floor, without so much as a glance in my direction and coldly stated, "You know Mr. Wolfarth, from this point forward everything that is in that binder is history. That's it."

What had happened? Well, I found myself in a situation that many companies have faced who are successful and start to grow rapidly. We had numerous outstanding accounts, had incurred some debt, and needed a fast bridge loan to be able to overcome this liquidity bottleneck and honor our outstanding debts. So, when one finds himself in such a situation, what does one do? Make an appointment at one's local bank, of course.

Basically, you go to your bank and say, "Listen people, I need 200,000 ? as a short-term loan to get through this temporary bottleneck." The answer you receive, however, is, "No, the risk is much too high. We cannot grant you the loan; moreover, we are forced to cancel the current account credit of 600,000 ? that you currently have with us." At this point you think: "Ok, this is not really happening; this is a nightmare. Wake up."

But you don't wake up from the supposed nightmare. You begin to realize: no, this is happening. Slowly I came back to my senses, trying not to show how utterly shaken I was and asked, "You do realize what this means? You are basically telling me that I might as well close my doors tomorrow."

"We are very sorry, but there is nothing we can do for you," he replied. Six years. Six years and this is how it ends? I could not believe it. Ever since founding the company, we had...