Situation: A company’s top customer has approached one of the company’s suppliers with a request that the supplier sell directly to them rather than through the company. The supplier normally does not sell directly to OEMs, and has neither the sales force nor the customer service capacity to work with these companies. Nevertheless, following the customer’s request, the supplier has asked the company’s CEO for a meeting. How should the CEO plan for this meeting? How do you address a customer-supplier end run?
Advice from the CEOs:
You need well-placed advocates both within the customer company and your supplier company. These advocates can help you to better understand what is behind the customers approach to your supplier, and what the true issues are. You will also better understand how the supplier is reacting to this request.
Talk to the boss of the purchasing manager who initiated this and let him know how this will impact your ability to supply other critical parts for their operation.
Ask for fast track approval as a preferred supplier.
Try to cut this off before the supplier representative arrives for your meeting.
You know from your history with this customer that you have had to make frequent delivery adjustments to meet their needs. Further, as a value add you make modifications to the parts supplied to meet the customer’s engineering specs. This level of flexibility is not part of your supplier’s business model. When you meet with the supplier, paint a picture of the downside of working directly with this customer to convince them that they don’t want to take this business direct.
Situation: A company has goals and objectives in place for the whole company. The challenge is that they need to focus top managers on effective processes and not just on their team’s objectives. In particular they want to increase focus on cross-functional processes. How do you focus managers on process?
Advice from the CEOs:
Start by identifying all critical processes. Once this is done, build an in-house system to track these.
Make contingency decisions dependent upon sticking with the processes.
Consistent follow-through is essential – talk through the blocks as they arise.
Don’t become a slave to your own system. Stay flexible and allow appropriate non-prescriptive behavior/solutions where it makes sense. This helps to feed creativity in the organization.
Be an advocate/cheerleader for the new culture. Employees need ongoing encouragement as they shift focus to the new regime.
Build an underlying culture to support your processes. This takes time and persistence.
If you are growing, as you hire new people, select new employees who fit the new culture. This helps to create lead models for the rest of the group.
By definition, growth means increasing infrastructure, which in turn means more restrictions and rules. Keep it fun. For example, create a wine penalty for missing deadlines.
If you’re late on your deliverable you have to contribute a good bottle of wine, with your name and the month that you were late on a tag attached to the bottle.
Contributed bottles of wine are shared at the company Christmas or holiday party.