Rules of Business Relationships, Part 6 - Penny Wise, Pound Wise
It’s amazing how often healthy business relationships are destroyed by inconsequential disagreements.
- A good customer leaves because of an unexpected shipping charge which the company refuses to reverse due to “policy”.
- A company misses a chance to purchase from a better supplier because the supplier cannot agree to their demand for 3%-Net 10 billing terms.
One day the owner of a fairly new account called me to complain about a shipment. She said the material was not what she ordered. I could tell by her voice she was bracing for a fight. I wasn’t sure which of us was in the wrong, but I didn’t care. I told her she could return the product for a full refund, no questions asked. I think she was stunned. From that day forward we were collaborators instead of adversaries.
Nine years later, the company was a million dollar customer.
In strong, long lasting business relationships, both parties always take the long view.
Taking the long view isn’t easy. First, it requires both parties have a long view, which only happens when business partners stay committed to frequent, high level conversations. Second, taking the long view sometimes goes against our natural instincts to make money and not be “a sucker”. But it’s the long view that keeps tactical decisions in perspective and sustains the benefits of our business relationships for the greatest length of time. Taking the long view makes us experts in that most valuable of business skills -
Compromise.
“…it requires both parties have a long view…”
Wow! I get all tingly when people start talking strategy instead of tactics. Sadly, it’s so unusual to hear, it sounds like a foreign language!
But I’d watch it if I were you; you’re going to get yourself stoned for talking heresy like this, Brad!
Wonderful points, Brad!
After all, company policy is supposed to be good for the company; yet so often it can have the opposite effect, which is why a little “wiggle room” and a lot of wisdom are almost mandatory when applying it!
Great post!
Jeanne
Robert and Jeanne, looking at your comments together makes me wonder if companies wrap themselves in policy to avoid delving into strategy … could it be?
Brad,
You may very well be right. Policy is so much easier than strategy, isn’t it?
Jeanne
Yes, it is. This is a good topic for a post, Jeanne. Maybe I’ll tackle it.
Brad,
Great idea! Look forward to reading it!
Jeanne
Hi Brad,
On the topic of policy versus strategy, I think Stephen Covey’s book “Principle Centered Leadership” has some sound advice. (at least I think that’s what the book was called)
Mr. Covey talks about a way of management whereby companies do not get bogged down in endless policy detail. Instead, under his model of Principle Centered Leadership, senior management sets a broad set of core fundamental principles, which employees are expected to follow at all times.
Staff can be flexible in applying specific corporate policies provided they are following the principles which have been set.
This model provides for common sense and flexibility. Yet at the same time it ensures that staff are following the bigger picture of what senior management wants for the company.
One more thing - lower level employees should never be blamed for strictly following ‘policy’ set by senior management unless senior management have made it clear that common sense should prevail over technical policy detail.
It is the responsibility of senior management to specifically allow for flexibility and common sense in the application of company policy. If lower level employees are not given this freedom, they cannot be blamed for the consequential adverse results.
Cheers
Andrew
Thanks for your thoughtful comment, Andrew. Those are all superb points. Covey’s model sounds like it is well rooted in common sense, which means it probably works very well. I’m going to have to read that book.