Leadership in a crisis

Zen aligns itself to three fundamental objectives, happy staff, happy customers and happy suppliers. We’ve already talked about ‘happy staff’ and ‘happy customers’ and now we turn to the theme of ‘happy suppliers’. In this ‘Paul Talks’ feature we heard from Paul Stobart, CEO, Zen about what ‘happy suppliers’ means to him. He explains how you can achieve a good relationship with your suppliers and be a good supplier yourself.

Happy suppliers

Why is it so important to you to have a good relationship with suppliers?

“Some of you will know that Zen prides itself on having the ultimate proof of its success summed up in what we call the Happiness Objectives – ‘happy staff, happy customers, and happy suppliers’. In my first webinar I talked about leadership – finding ways in which to inspire your people to get them engaged, and happy in what they do. Then I talked about the power of your installed base, looking after existing customers to the very best of your ability and making them happy with the service and experience they receive. Now it’s the turn of suppliers.

Now talking about ‘happy suppliers’ knowing that our customers will be reading this is a little awkward, for obvious reasons. What I don’t want to do is drone on to you about how marvellous we are as your suppliers; it’s up to you as individual businesses to make your own minds up about that! But we are all suppliers – we supply you, you supply your customers, so it’s important we learn what we can from each other in our quest to be the best we can possibly be.”

What sort of supplier relationship would you say constitutes a happy one?

“You want a strategic relationship with your suppliers. Relying on short-term transactional engagements is risky; it’s far better to build longer-term, trusted relationships which will give you real benefits. I have worked with good suppliers and indifferent suppliers in many different industries, and I’ll share a great example with you of how this works. One business had two main suppliers, both owned by the same parent company, but you could not imagine two more different approaches:

Supplier A talks a lot about partnership but at its heart, it seems to me, is more interested in the commercial transactional than the longer-term relationship.
Contrast this approach with the Supplier B. Completely different. It is clear here that relationship is more important than the transaction. Their approach seems to be ‘if the relationship is right, then the transactions will follow’. And I totally buy into that philosophy. They are trustworthy, open, honest, transparent, supportive, and work with us as partners. They are a giant in terms of their scale and size, but it doesn’t feel like that. For example, I have an escalation point, and a good relationship, with the CEO. Everyone throughout the organisation behaves in the same way; culture as ever comes from the top. They are a pleasure to work with.

This last few weeks has been a massive test of the quality of all of our supplier relationships. In our case several have been found wanting, and others have gone the extra mile for us. No surprise, but it’s those who have stood by us throughout this crisis, the Supplier B’s, that will get repeat business.”

How would you advise a business to achieve that relationship?

“I would argue that there are three principles at play:

Trust – the aim has to be to create a sense of trust and partnership with an important supplier. You need to be able to trust a supplier when times get tough, and know that your interests as a customer are going to be well looked after. Being legged over by a supplier is one of the worst feelings imaginable. It’s happened to me, as I am sure it has happened to many of you, and I have never forgiven any supplier that has done that to me. By contrast those suppliers that have stood by me in the tough times have been rewarded multiple times as I have moved on through my career!
Openness – I have always respected suppliers who have given me the truth, even when I don’t want to hear it. I recall a marketing agency telling me that my ideas for an installed base strategy at Sage were plainly daft – this was a dangerous tack to take as I was new to Sage and they could have rubbed me up the wrong way entirely. However, the way they did it was very well argued; they were right, I was wrong, and I was grateful they had put me right. I have never forgotten their candour (which frankly saved me a lot of embarrassment with my new colleagues, because my idea was, on reflection, truly awful), and have used them at least five times since in different businesses. There’s a reward for being open and honest! As suppliers to our customers we should always tell it how it is, phrasing the message carefully of course!
Relationship management – one of the things I hate about some suppliers is the way that you see the top team at the pitch and never see them again thereafter. It’s so disrespectful. And I never forget it. Having breadth of contact within a supplier is really important. If as a customer, you need to escalate, you can. If you need specialist help, you can get it. There’s a relationship there, built on trust and openness, as we have seen, and if that’s working then the relationship will flourish.”

How would you summarise a happy supplier?

I suppose the summary is that the best suppliers are not suppliers at all, but partners. And that’s how we like to style ourselves.
Paul Stobart (CEO, Zen)