Managing Information Flow Essential To Avoiding Adversarial Relationships

Wednesday, November 03, 2010 - Permalink
In a research paper titled "A Blueprint for Success with Suppliers," we summarized our findings about the characteristics of best-in-class customers, those that attracted the best suppliers and motivated their strongest contributions.  One of the attributes of these best-in-class customers was their effectiveness in sharing information with suppliers.

One supplier commented in an interview about a customer where the relationship was strained so that “they keep us in the dark, and then expect us to magically be able to respond to some last-minute need with respect to a new product launch or some change in their product’s technology.”  This supplier went on to say that most of the times where they’ve disappointed this customer could have been avoided had they been given advance information with a reasonable leadtime.

To avoid adversarial relationships, look carefully at the information flow between the companies involved.  Make sure not only that the necessary information is being provided, but also that it’s being done in a timely manner.

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Building Win-Win Relationships

Thursday, October 28, 2010 - Permalink
In our research relating to the relationships between manufacturers and their channel partners, we found that the most significant cause of conflict was a failure to address “margin management” – basically a failure to ensure that the relationship made sound business sense to both parties.  Manufacturers and the distributors, dealers, wholesalers, and the other channel partners through which they go to market are both business organizations.  If the relationship isn’t contributing to their business success, it won’t get attention.

Best practice firms come to a shared understanding of key elements of the business models in place with their partners, and look for actions that create value all around.  Negotiations between the two firms are a fact of life, but avoiding situations in which the outcome of a negotiation makes the relationship unattractive is a mandate.  And, at the same time, firms with strong relationships look for alternatives to zero-sum negotiations, trying instead to find a way to make the relationship a win for both parties.

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Choosing The Right Customers

Thursday, October 21, 2010 - Permalink
One of the insights we’ve learned is that picking your customers is as critical as any other element of strategy.  Not all customers are open to a strategic relationship.

At a Strategic Accounts Management Association meeting recently, I presented a paper titled “How Important Is Your Firm to Your Customer?”  The paper suggested a scoring system to determine whether a supplier was important to their customer’s strategy and operations, and also whether a supplier was important to their customer’s own customers, helping them make sales or giving them a competitive edge.  Not every supplier-customer relationship is important in either respect, and even fewer are important along both dimensions.

Picking out the customers that are going to value the relationship is an important first step in getting beyond adversarial relationships.  With scarce resources a reality, there is no use in fighting too many uphill battles.

-Atlee Valentine Pope

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Keeping Business Relationships On A Positive Track

Friday, October 15, 2010 - Permalink
Several years ago, in an interview with an executive from a packaging firm, we asked “When you think of relationships that have gone in the wrong direction, what could the customer have done to avoid the derailment?”

The answer included the following:  “Not bring in a group of competitors, give them information we weren’t getting, and then put out a request for bids.  Not get caught up in the reverse auction mindset.  Not jettison a ten-year relationship for one-tenth of one percent on price.  All three of those are examples [our firm has experienced].”

CoDestiny relationships require a two-way commitment to success, which takes work from both firms.

Tell us, why are so many business relationships adversarial instead of being focused on ‘win-win’ outcomes?”

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