Stuart Graff | Crain's Phoenix

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Stuart Graff

Background:  

The Frank Lloyd Wright Foundation seeks to inspire society through an understanding of Frank Lloyd Wright’s ideas, architecture and design, and by enhancing appreciation for his legacy and body of work.

The Mistake:

Focusing solely on the bottom line.

In the many roles that I played over the course of my career — legal counsel, business leader, strategic advisor—the principal things that my colleagues and I focused on all came down to the impact on the bottom line of our business. That focus led to a lot of short-term thinking, sometimes at the expense of vendors, customers or other partners.

Despite all of our efforts to think and plan for the long term — and we often created relationships that have lasted for decades and continue today — we made decisions that negatively impacted others so that we could achieve a benefit in the short run.

Moving into the nonprofit world permitted me to have a different perspective on partner relationships. Being as cash and resource-constrained as most nonprofits are, we always try to manage our supply chain and our philanthropic investment well. But when we push our partners for things like lower costs, are we sacrificing an opportunity for other forms of partnership, such as in-kind support, executive and employee participation in our work, and network development?

More than ever, our success depends on building good relationships and good networks that will be long-lasting and that will enrich not only our organization but our suppliers, patrons, donors and visitors alike.

Moving into the nonprofit world permitted me to have a different perspective.

The Lesson:

I’ve come to realize that the core question for us in every transaction is whether we are positively impacting our partners when they work with us. If we are, then we’re building our organization for a long and successful future. If we’re not, we may be winning something in the short term, but hurting ourselves in the long run.

We sometimes look at this in economic terms, like maximizing the total lifetime value of a customer, but I think it’s not a bad thing to overlay the ethical dimension to ensure that we are always thinking explicitly about more than just money. It’s good customer service.

The question of positive impact is something that I wish I had thought about earlier in my career. It’s a great aligning question for working with any partner — financial, vendor, customer, consumer — because it gets you to focus on long-term strategy and relationships.

It also creates an opportunity to unlock hidden value. Things like trust, respect and reputation can be overlooked because they are not so easily quantified.

So, asking this question is relevant not only to a nonprofit but, really, to all businesses.

Follow the Frank Lloyd Wright Foundation on Twitter at @WrightTaliesin.

Photo courtesy of Stuart Graff

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