Time to Lawyer It Up

Although I hail from a family of attorneys, I am no fan of the legal system and how it retards corporate innovation and ingenuity. The litigious inclination of today’s corporate executive is a true blight, limiting the global competitiveness of US-based companies.

Consider the vicious circle that engulfs many firms. They devise an offensive legal strategy to strangle and distract competitors.

Concurrently, they employ a defensive legal front to fend off investors, customers, partners, and…yes…even their own employees who claim they’ve been somehow wronged.

I could easily play the legal card. Strategic Communications Group (Strategic) owns the trademark for the phrase “Network of Relationships.” Undoubtedly, each quarter I receive an inquiry or two from a law firm with an offer to seek out and take action against violators.

“We will happily do all of the research and handle the legal filings for a modest 60 percent of all fees collected,” one firm recently wrote in an Email.

My answer is always the same: “Thank you, but no.”

While it is an important part of Strategic’s value proposition, this trademark (and the business concept it represents) is not core to our success. As such, I’d rather focus my time on more meaningful activities that create value for the organization.

With such fervent views on this issue, you’d think I would be mortified by Starbucks recent legal suit to block the hiring of a former marketing executive by rival Dunkin’ Donuts.

Well…not quite. In fact, I stand 100 percent behind Starbucks’ right to enforce an employee agreement that included an 18-month non-compete provision.

I do respect the right of every individual to seek employment at their company of choice. Plus, it’s absolutely appropriate for an executive to carry their experience to a new position, especially when it provides a competitive advantage to their employer.

Yet, in this specific case Paul Twohig freely elected to sign an agreement at Starbucks that barred him from working for a competitor for a specific period of time. And now he has to live up to and meet those conditions.

Strategic’s own employee agreement includes a section that prevents the solicitation of clients should the staffer resign from the firm.

The employee must also agree not to take steps to influence a colleague’s standing with our company. Simply put, they can’t recruit away other agency staffers to their new place of employment.

Only once in 15 years have I had to ask our corporate counsel to remind a former worker of these obligations. He chose to ignore his commitment. That wasn’t OK.

Starbucks, Corporate Growth Gone Bad

I had a good conversation this morning with a CEO of an emerging software company about managed growth. We agreed that while growth is critical for the health of any company, many executives become too enamored with it.

Starbucks is a good example of growth gone badly. They announced yesterday plans to close 600 underperforming stores across the US at a cost of nearly $350M. More surprising is the fact that nearly 70 percent of these stores have been open for less than two years.

According to Starbucks CEO Howard Schultz this decision will allow the company to focus on “enhancing operational efficiency” and “improving customer satisfaction.” OK…does that mean they are an inefficient company that has lost sight of its most important audience – customers?

At Strategic Communications Group (Strategic), our corporate philosophy is “great work for great clients.” We keep our focus on this principle with the belief that our own growth as a business will result from the ability to deliver on that promise.

At times, we have made decisions that tempered our ability to grow. We’re willing to accept that fate as we strive to always keep the interests of our clients and employees top of mind.


Starbucks to Shutter 600 Stores
http://www.bizjournals.com/baltimore/stories/2008/06/30/daily24.html?f=et52&ana=e_du