My friend and colleague Andrew Downard sent along a quote from the 19th century English artist, critic, socialist, and philanthropist John Ruskin in The Common Law of Business Balance that resonates incredibly well with Ailment #1 and the danger of being Penny Wise and Pound Foolish and focusing only on price.
The quote attributed to Ruskin says, “It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.”
He continues that it’s simply impossible to pay a little and expect to get a lot. “If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”
Very prescient thinking! It’s as true now as it was when Ruskin penned those words that price is not necessarily an indicator of quality. In the Vested model a low-cost-only focus won’t work in a long-term strategic relationship. Rather, there needs to be a collaborative balance between the product or service and the cost—which is how value is created.