The Connected Corporation by Jordan D. Lewis

Author:Jordan D. Lewis
Language: eng
Format: epub
Tags: SOC035000
Publisher: THE FREE PRESS

Constant Communications Avoid Trouble

Most companies have clear reporting patterns to keep people informed on routine activities. In alliances, where so much is nonroutine and the risks from misunderstandings can be high, an extra investment in communications helps ward off problems. As a general rule, each firm should take the initiative to keep its partner informed on all matters and to surface issues as soon as they are evident.

Listen to PPG vice president Bob Becknell, who was at the center of Motorola’s transition to supply alliances: “Many firms believe they can talk to a supplier about process issues once or twice a month. In practice, you have to discuss these things daily, if not more. The importance of ongoing communications should not be understated. We tend to put off minor issues, but then small problems grow into big ones. To reinforce trust and enhance mutual understanding, frequent visits and an open discussion are very important. Face-to-face is better than telephone, and frequent telephone contact should be the minimum baseline. Some firms try to reduce the number of interactions with their suppliers by communicating only in infrequent large packages. But those are more difficult to absorb and miss many emerging issues.”

To illustrate the result of poor communications, the CEO of a supplier to the chemical industry (here called SupCo) describes a painful experience that he does not intend to repeat. Recently, a buyer at a major customer told SupCo that it had won the business it had sought, and he instructed it to purchase the needed equipment. At the last minute, however, the customer gave the business to another firm. That left SupCo in a bad position: Wanting to help the customer reduce cycle time, it had quickly made the investment, hired personnel, and was already making some of the product.

In exploring what had gone wrong, SupCo’s CEO learned that the customer had weak internal communications, and others there had not supported the purchase from his firm. A related problem was that a new SupCo sales executive, who was handling the account, was not scanning for issues in the relationship. Neither was the CEO, who maintained contacts there himself. In fact, although the customer had been unhappy with SupCo’s service support, it had failed to tell the firm. The customer also had perceived a weakness in SupCo’s technology base. While the defect had been fixed, the customer had not been told. Compounding the problem, the customer believed it was SupCo’s responsibility to spot issues in the relationship, whereas SupCo’s CEO had thought the customer would let him know if there were problems. SupCo was aware that a rival supplier had been approached, but due to weak communications the CEO thought it was only for a “sanity check” on prices. When that firm won the order, SupCo suffered a substantial loss.

Experience conforms that face-to-face meetings often have a clear advantage over the telephone. Even at Motorola, a world leader in telecommunications products, people prefer direct contacts. John Ihle, the PPG product design manager,

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.