Professional Loyalty
also known as personal integrity

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I recently received this notice in the mail from my insurance company. It didn’t come from the agent with whom I had dealt for 3 or 4 decades, but rather as a “NOTICE OF NONRENEWAL” directly from headquarters. Much to my surprise, when I contacted the agent, the response was, “check with your neighbors”. In other words, “you’re on your own”.

The response was not what I had expected but it prompted me to think about how I might handle a situation like this today with any of my loyal customers. It also reminded me of how I had handled a similar situation many years ago – a seemingly fitting metaphor for today.

I once managed a company in California that had been recently acquired by a large European conglomerate, known as “Principal” for the purposes of the metaphor. My company – the metaphorical “Agent“, renamed here to “protect the innocent”, as Jack Web used to say on the TV series. One of my customers, a maker of medical instruments, shall be known here as “Client“. The three companies were partners in a very real sense, as each played an important role in supplying the market with a much-needed product and each profited from the relationship.

Agent, my company, was preparing to produce the next annual shipment of electronic modules for Client, when we were advised by Principal, which provided a critical component, that they would no longer supply that component. This came as a bit of a shock because the critical component had been a mainstay in Principal’s product line for many years and everyone understood the critical nature of the component to Client’s success

When my pleas to Principal to reconsider went unheeded, I had a tough decision to make. At considerable cost to my company, I could help Client find another source, or I could simply tell them to “check with your neighbors”. This being my first experience as a CEO, with nothing but my own integrity to guide me, after much agonizing, I put my engineering and marketing staff on the task of finding a solution to protect Client’s interest after the many years they had been a loyal customer.

In the end, we produced the last few modules that we were able to, with the inventory we had left, then turned the order over to one of our arch competitors and gave them the tooling they would need to bail Client out of a critical situation. The time, effort, and financial costs of that decision far exceeded the profit we had accumulated over the years of serving that customer but we did it in spite of the impact it would have on our bottom line. It was a costly decision indeed, but I would do it again because it was the right thing to do.

I sent this story to Agent and this is the response I received a few days later. “I’m glad that I’m coming to the end of my career. I turn 73  in a week or so and that will be 45 years in this business.” I am sure others will be equally relieved that he is not there to count on.

By: Jim
Written: December 24, 2021
Published: December 26, 2021
Revised: December 28, 2021
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