An interesting showdown between Lori Swanson, Minnesota’s Attorney General and Ferrellgas, a provider of LP gas to 50,000 Minnesota customers is surfacing. According to news reports, the Attorney General sued Ferrellgas on behalf of its residential customers, saying they’re paying disporportionally high prices for LP gas. According to the AP, spokesman Jim Saladin for Ferrellgas said, “Ferrellgas wouldn’t be the largest propane retailer in the state if its prices weren’t competitive. The company has 50,000 Minnesota customers.” The story then provides examples of supposed price gouging and surprise fees related to the lawsuit.
Excuse me. There is absolutely no logical basis how a person can state that we’re the biggest, therefore we’re fair and customer focused. Actually, a case for the opposite viewpoint exists, “we’re the largest, therefore we can set prices whereever we want, based on our criteria of ‘what’s fair for us, not our customers.’” This leads me to warning sign No. 6 from Without Warning, that a silent problem is present.
When rationalization is the customary means to explain why specific targets aren’t achieved or certain decisions are made.
Individuals and companies rationalize decisions and how decisions are made all the time. Rationalization can be a highly effective tool, if the resultant decision is based on strongly held corporate values (this is what we stand for), a solid contextual framework (this is how we have successfully done things in the past), and strong moral values (we understand the difference between what’s right and wrong). However as we saw in the mortgage crisis of a year ago, a slippery slope scenario can quickly evolve. In Without Warning I site a Wharton article referring to the mortgage crisis titled, Eyes on the wrong prize… It states:
Alarm bells have gone off… But in many major industries, problems grow slowly and come to be accepted by members of the industry only to explode later.
Bottom Line: Today, many corporations and businesses are struggling to reach their goals. Many are financially in dire straights with reduced demand for their products and reduced borrowing capacity. When this occurs, a path toward creative profit generation techniques can ensue. This is dangerous ground, since it can lead the business into a high-profile lawsuit. And when this occurs, it’s lights out. Customers will leave. Costs will soar. And the business will likely evaporate.
