Pressure or partnership with your suppliers?
All too often, we hear of companies pressuring their suppliers and partners to perform. However, as we are all human beings, what would work better?
In today's world, human dignity is important, and mutual respect is often the hallmark of successful business relationships. While some companies and even management thinkers have pushed for ideas such as "key performance indicators" (KPIs), we have progressively seen how such ideas and measurements often work against them in the long run.
In recent history, the collapse and restructuring of various industries, including the once untouchable financial industry, is a nice and grim reminder that behind pressuring for performance, comes a heavy price. Look way back at successful companies, and you can easily find a different mindset altogether - sustainability.
Look around the world, whether the West, or the East, which today is fast becoming the cornerstone of success, there are large, and small companies, that are not only successful, but have been sustainable over a long period of time. These companies are not shooting stars of brilliant but transient prominence, but the result of a very slow, steady and painful ascension to what they are today.
What are some of the reasons of these sustainable successes, especially in Asia? At least two things - (1) sheer hard work with no shortcuts, and (2) mutual respect for others.
From where I came from, business relationships are built slowly and steadily. People are at the minimum, courteous, and respect is the key to forging sustainable and favorable business relationships. This is perhaps a hint of the Confucian lineage we subconsciously live by.
And unlike the idea that one can create a "hot" product or service and make a quick profitable exit, hard work, instead, is the hallmark of slowly and steadily inching towards something you can call your own. The "dotcom" idea is not something that many of us believe in, and we don't believe there is a quick road to success. At most, it is a nice flash.
Therefore, in the same light of hard work and mutual respect, how should we see our suppliers?
Do we simply imagine that pushing them ever towards performance and results will be to our benefit? Are our imagined goals even realizable or realistic, or just figures we pluck out of thin air? Does pressure create any sense of partnership with our suppliers?
Conversely, a true partnership is a sharing of journeys, a convergence of goals, and at the end of the day, an enjoyable path together. You cannot call a business relationship a "partnership" if you insist only upon the performance of your suppliers, without putting an equitable amount of commitment into the relationship to secure your supplier's success and performance.
In short, if you are selling some products, you would have to have a sizable marketing campaign to help your retailers perform up to your sales targets. And if you are working with suppliers requesting products or services quickly, you are expected to pay your suppliers promptly on time as well. If you expect sizable media coverage from your brands, you would have to commit sizable dollars to not just fees, but advertising dollars and campaigns that can truthfully create an impression that you are as big as you claim you are.
Respect begets respect, and your partners will feel like true partners, and not imagine themselves to be slaves without recognition. Likewise, true respect is about understanding the realities of the world, the challenges your partners face, and how to collectively and collegially cooperate together to reach mutually beneficial goals. You might be pleasantly surprised how easy it is for your partners to perform well, not under duress, but under mutual respect.
Pressure is something you do to cook a dish (in a pressure cooker). Leave it there, and nowhere near a human relationship. Life is not just about numbers. Life is about living, with human beings, and having a smile to go to bed with.