Do you know how to dance with an elephant? The elephant can crush you, either by attacking you out of anger or by accidentally stomping on you because it likes you so much. The trick is to get an elephant to like you with out accidentally crushing your business. And run for life if you hear that trumpeting noise.
When my company was a supplier to Boeing, I was of course happy to have landed them as a customer. Our relationship was excellent and added value to both parties.
Boeing took a chance with my company, an emerging technology business. And the initial bureaucracy that we had to go through to become a supplier to such a large company was challenging beyond even their expectations. But on the other hand, there was a lot in it for them. The value that we added was clear: a solution that worked and provide ROI, thought leadership, alignment with and accommodation of their needs, excellent service, and a supplier who would always “go the extra mile” for them. And for us, their use of our product and the benefits they derived helped affirm our value as an emerging company. Together we created synergies and value that we would not have been able to create alone, in spite of our disparate sizes. Clear value is a key ingredient for success in creating mutually beneficial relationships between customers and suppliers of unequal sizes and clout. The value that a small customer or supplier brings to the relationship can help equalize the relationship’s balance.
This takes me to the point that I was making in my previous post, “When your supplier is bigger than you are”. A smaller company, whether in a supplier or customer role, can develop a mutually beneficial and cooperative relationship with a bigger organization.
To do so requires developing and fostering good working relationships among the people at both companies. While companies do business with each other, it’s really the people who do business with other people. Of course, you need to choose wisely when developing relationships, as doing so requires resources. Not every customer or supplier merits the resources required to develop deeper and trusting relationships.
Relationships can and should be built at different levels of the organization.
When the time comes for getting a larger company to cooperate with a smaller one, several things may happen. Your contacts are more likely to go to bat for you when needed or break through big-company bureaucracy. When senior management can develop relationships with counterparts at the larger company, it becomes much easier to make the business case for positive change, such as improving business processes and practices. However, if the relationship is purely transactional and arms-length, then introducing new processes, business ideas, opportunities, etc. will taken longer (best case) or won’t happen at all (likely case). Transactional relationships are less personal and do not require high levels of interaction and trust — important ingredients for getting a bigger company to work cooperatively with a smaller one.
Sometimes the elephant is too large and too uncooperative, and the resources required to develop a collaborative relationship aren’t worth it. Developing a good business relationship with and gaining cooperation from a larger supplier can be challenging, but in the end, the call must be made as to which elephants are worth pursuing.
Understanding supplier performance is vital to ensuring a well-functioning supply network. This how-to book will help you develop and implement an evaluation process to help you reduce costs, lower risk, and improve both the performance of your company and your suppliers.