Supplier Engagement: Do the Exact Opposite of What You Do Now.
July 14, 2016
Jordan Early
3 minutes

Do you, like me, find the material delivered at procurement conference getting a little repetitive?

Do you lie awake at night wondering how you might finally move the conversations you heard at  these events into reality?

You know, the conversations I mean, the ones about delivering value, building procurement’s profile and unlocking the innovation that resides within our supply chain.

Here’s my thought, to achieve something new, you need to try something new. The same approach will yield the same results.

I understand that I’ve opened pandora’s box here, so to reign things in a little lets start with supplier relationships.

In a post earlier this year I outlined that you mustn’t treat your suppliers like rug salesmen. This post will follow a similar vein although I will pull on research and methodology from the University of Tennessee and the Vested rather than my personal experience in a Moroccan souk.

The Definition of Insanity  

We’ve all heard this one before; ‘The definition of insanity is doing to same thing over and over and expecting a different result.’ It’s overused, but it’s true and commercial relationships are no exception. For supplier relationships to deliver to their full potential a departure from traditional corporate engagements must occur.

Militant Buyer Syndrome

In the past supplier relationships have relied on single point accountability. Let’s call this person that holds this responsibility the Sergeant (you might know them as account manager category manager or program manager). The Sergeant would traditionally gather ammunition from his garrison (information from his co-workers) before heading into battle (a face-to-face supplier engagement) with his opposite number, who had undertaken a similar munitions stocking process within her own garrison. This process looked a little like this.

Supplier engagement

Supplier engagement

The ensuing battle did little but build animosity and doubt between the two parties and tended to result in discussions degenerating back to the old arguments around price, delivery time and payment terms.     

It’s clear that a collaborative supplier engagement must take a different approach if it hopes to effect a different outcome (collaboration, idea sharing etc).

What if we did the opposite?

If the approach you are taking is giving you negative results, what is it that you should you do? In this case, I suggest doing the exact opposite. The dysfunctional approach I’ve discussed above is called the ‘bow tie’ approach to engagement. Lets examine what happens if you reverse this process .

The reverse bow tie.

Organisations that develop truly collaborative relationships (the ones that answer those questions we pose at conferences) understand that the casym that has grown between buyers and suppliers doesn’t aid business continuity, rather the opposite, it derails it.

Organisations involved in collaborative supplier partnerships have left their combat gear and are working together towards shared goals (read more about this here). A fast track to these sorts of value driven relationships is to implement a reverse bow tie engagement protocol.

The reverse bow tie puts experts in touch with experts (regardless of which firm or function they sit in) and empowers them to make decisions that will benefit both businesses. Rather than feeding into account managers from each business (the Sergeant) these subject matter experts work together to jointly solve business problems, they are directly responsible for delivering  successful outcomes for both businesses. The reverse bow tie looks like this.
Screen Shot 2016-07-14 at 07.32.41

Creating an environment where team members are empowered to make critical decisions without the need for approval or escalation, removes the combative blame game that poisons so many commercial relationships.

Rather than letting two individuals (most often sales and procurement) manage the relationship for the account of their respective organisations, the reverse bow-tie approach puts the business back in the driving seat. It is with this in mind that relational technologies should be designed, in a way that amplifies communication channels, enables decisions and drives change

These peer-to-peer groups, if correctly established and empowered, will allow an organisation to be more agile and adaptive, while at the same time resolving conflict without the need for management intervention. Ultimately, 99% of all relationship issues should be resolved by those empowered to do so before they get to the stage where escalation is required.

And that is how business change happens!!

If you’d like to learn more about reverse bow ties or governance in supplier relationships you’ll find a wealth of knowledge in our Governance whitepaper which is free to download below.

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