Management Unleashed – Treasuring your suppliers

Management Unleashed – Treasuring your suppliers

Management Unleashed – Treasuring your suppliers
This article was first published in Business Times on 30 March 2019
By John Bittleston

Suppliers and competitors are two vital parts of your business. Most organisations regard them as potential antagonists, ready to create costs or impel narrowed margins in a battle that could only be described as exhausting, or even terminal. These are quite the wrong ways to run relationships that will substantially determine your success, even possibly your health. I’ll start with suppliers.

In two weeks’ time I will look at the opportunities with competitors.

Have you ever thought about who were the suppliers in your life? I don’t mean business or work, I mean right from the start when you were a baby. And I don’t mean the chemist who sold your mother the medicines to ward off childhood diseases. I mean your real suppliers. Your parents, your grandparents, family, helpers, teachers, friends. Perhaps you didn’t think of them as suppliers but they were. Because they supplied you with education, with standards, with information, with support when you were down, with congratulations when you triumphed.

So how does this relate to business suppliers?

Now think of your suppliers in business. You probably see them as a very different bunch. Tough negotiators – but so were your parents and teachers. Ruthless exploiters of your hard-earned money – but so, in their own way, were your friends. You make no progress in this world without relationships that involve both give and take. That is true of business and career.

The synergistic relationship between supplier and customer is too often underestimated, if, indeed, it is recognised at all. Just as in other aspects of life, people who had to deal with you for various reasons were potential allies and helpers so, too, suppliers in your career world are a truly valuable source of learning and earning. Think of your boss as a supplier? I don’t suppose you do but s/he not only pays you – quite a big supply chain there – but teaches and corrects you when they can.

What constitutes a supplier?

Suppliers are a much bigger group than you imagine. The caterer who brings your sandwiches for lunch is a supplier. The taxi driver who takes you home late at night is a supplier. The minister who takes the service at your local place of worship is a supplier – you pay them, they help you. Many people who you don’t even look in the eye are supplying you with what you need to make life tolerable and fun. Think hard about your suppliers. They are how life works for you.

In their early days, Marks & Spencer recognised the potential of supplier knowledge and loyalty. They paid for it, not in a direct way but by always paying their suppliers’ bills immediately. This meant that small, up-and-coming suppliers, who were the hungriest and most eager to develop, paid more attention to this unusual customer who was only too anxious to pay on sight of invoice.

But the relationship went beyond service and payment and socialising. It extended to information about the market, to technical developments that M&S could acquire ahead of others, to advance notice of competitive activity likely to impinge on the business, to tariffs and taxes being discussed by the Customs authorities. If a University or College were experimenting with a new approach to managing materials – they got to know first. Farmers in a remote part of the world setting up a collective to negotiate higher prices? – the information was to hand immediately.

A customer who pays immediately and only queries the invoice later if it is wrong is a prize indeed. ‘Better demonstrate our own efficiency if we are to keep him happy.’ Paradoxically, it made suppliers extra careful to check their invoices, too. So how do you treasure your suppliers in a way that what is clearly transactional becomes more than tit for tat? The answer is simple.

You are not only a customer, you are a supplier, too.

Recognise that even though you are a customer, you are also a supplier to them. Your businesses are quite separate, financially speaking. You don’t sit on their board and they don’t sit on yours. But that’s where the difference should end. In your day to day dealings you should be as close to them as you are to your colleagues and your customers. Invite them to your social events, not just as sponsors but as guests in their own right. When they have problems, help; that way they will help you in a time of need.

When building Peter Lehmann’s winery business in the Barossa Valley in the mid-1970s he suggested to me that we do a ‘handshake deal’ with growers such that in years that were good for them, they would help us and in years that were good for us, we would help them. I was very skeptical about it – no legal documents, no detailed definition of what ‘help’ meant, just a raised glass to confirm the deal. Throughout the time we worked together we never had an argument with a grower, nor they with us. If you operated in the Barossa you honoured such things.

My best ‘supplier’.

The best supplier I had in my early years was one of my Creative Directors. He realised that I was quite young and, well, perhaps not exactly innocent, but untutored in the ways of creating compelling messages. He devoted time to explaining things to me, helped me to understand what creativity is and how it is stimulated. His judgment has resonated with me all my later life. What exactly did he do to win this glowing appraisal?

First, he paid attention to what my capabilities and shortcomings were. Second, he was honest with me – encouraging when it would help, critical when I was a bit over-confident. Third, he cared about my success as much as about his. Fourth, he let me do my job even when it irked him a little to do so. What a marvellous summary of how to treat a supplier.

But surely he wasn’t a supplier, was he? It seems like he was just a colleague.

Wrong, He was very much a supplier because I was his boss. And he was my teacher.

Great synergy? Indeed.

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