Situation: A company has a long-term relationship with a Japanese distributor that is also an investor in the company. Due to time zone differences and language difficulties, communications are very difficult. This leads to significant cost overruns for the company. How do you satisfy a difficult foreign customer?
Advice from the CEOs:
- In working with a difficult partner, it is critical to set expectations, establish ground rules and repeat these at the beginning of each conversation or teleconference until it is clear that both sides understand each other. Even at this point, these should be repeated and reinforced any time a new individual is participating in the conversation.
- Do you want us to give you (a) our honest answer, or (b) do you want us to tell you what we think you want to hear? – They would be foolish to choose (b).
- Preface each critical response with this choice to reinforce the agreement at the beginning of the meeting.
- In a situation where you are losing money under a fixed price contract, you may have to have a “Come to Jesus” meeting. During this conversation, you want to understand and establish:
- Whether this relationship is profitable for both of us, and
- Whether this project is doable by each of us.
- Usually this will result in a radical shift in the model.
- If it does not they it is better for both if you part ways. You are unlikely to reconcile the situation.
- The bottom line is to establish, mutually, whether you can satisfy your partner through your efforts. This is critical to your future with this customer.
- If you cannot find an acceptable solution you must abandon the effort.
- It makes no sense to take on business that is not profitable to you, even if the revenue is important to plan achievement.
- At the current rate, you will not make up the loss in profitability through additional volume.