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Relationship Tip: Focus on Factors You Can Control
Saturday, July 14th, 2007

Suppliers try to force customers to change.  Customers try to force suppliers to change.  

Trying to change someone else leads to:

Conflict 

Frustration for the parties

Backlash from the party pressured to change

Resentment and abandonment of the relationship

Instead of trying to change someone else, focus on factors that are within your control.  This can be done by:

Changing perspectives

Accepting the other party’s right to control itself

Exploring the issues that led the other party to take the action it can

Asking the other party to take specific action and explaining why you are asking

Talking about the issue and seeking options that address all parties’ concerns and needs

Agreeing to disagree on the issue and, then, making the best decision you can based on the facts as they currently exist

Finding and implementing workarounds that do not require change by the other parties to the relationship

What results can these approaches generate for you?  

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Posted in Business Tips, Negotiations, Solving Problems | 1 Comment »



Value: What matters to your customer?
Friday, July 13th, 2007

One of the buzz words in business is “value proposition.”  How many times do people ask, “what is your value proposition?” 

Before defining a value proposition, it is very helpful to think about what your customers value.  In other words, what matters and has value to customers?

Typically, customers find value in having the solutions to their actual problem provided in a way that makes sense at a reasonable price.  Speaking from a procurement perspective, customers often value: 

Tailoring of the solution to their environment so that customers can roll the solution out and, like a piece in a jigsaw puzzle, it just fits snuggly into place without gaps or overlaps.

Quality of the processes and deliverable solution so that the project is relatively painless - the process is smooth, conflict is minimal and quickly resolved, administration of the contract is easy for the parties to do, and the results meet the business needs. 

Responsiveness to the customer’s needs is often valued.  From project to project and customer to customer, the responsiveness that the customer needs can vary a great deal.

Some people try to sell customers on a solution to a situation that the customers do not perceive as a problem.  This involves multiple layers of selling.  Customers have to be sold on the idea that they have a problem.  Then, customers have to be sold on the importance of resolving that problem.  The third thing that customers have to be sold on is that the specific problem is more important than whatever the funding would have otherwise been used to correct.  Finally, after all that, customers have to be sold on a supplier’s suitability.  Wouldn’t it make more sense to find out what the customer perceives as the problem, understand why the customer needs to resolve it, explore the customer’s budget, and save the selling for the end when it is necessary to help the customer understand the supplier’s qualifications?

Reasonable prices.  Price is a double-edged sword.  If a supplier is perceived to undercharge on price, the supplier is likely to be eliminated based on quality concerns.  In other words, the customer is uncertain if the supplier can meet the customer’s needs.  In contrast, if the supplier is perceived to overcharge on price, the customer tries to negotiate price (often with inadequate information) or walks away because the price is too high.

By understanding what matters to customers, suppliers can tailor their offering to reflect what customers value.  At the end of the day, this is the most compelling value proposition of all.  How do you get there from here? 

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Politics: What are five cases in which politics impacted business?
Friday, July 13th, 2007

There are many different opinions about the suitability of politics in business discussions.  Some urge that politics be separated because people have strong views about the issue. 

Business occurs in a context.  The political envirionment shapes that context.  As a result, political issues are often appropriate topics for discussion.

Think about some of the topics that have made the news in recent weeks and months.  Five of these cases are: 

China’s ownership of dollars, and ability to dump dollars,

Deployment of owner or employee’s deployment to Iraq

China’s relaxed stance on environmental and food safety,

War in Iraq on oil prices, job market, and inflation, and 

Politics on governmental  contracting decisions.

How do these political issues impact business?  

What do they mean for your business?  Often, they may change the opportunities that are available to people. 

If the situation were changed overnight, what would be the costs and benefits to your busienss of these changes? 

 

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Following up on TEA and Robert Scott
Thursday, July 12th, 2007

A couple weeks ago, an investigation revealed some questions about how the Texas Education Agency handles contracts and Robert Scott, the agency’s second in command, was alleged to have engaged in some violations of contracting policies.

Over the last couple of weeks, the details have become even more interesting. 

It was alleged that there was a case of mistaken identity.  Rather than the violations occurring by Robert Scott, they were committed by a Rob Scott (who also is in education).  Rob Scott denies the allegations.

Yesterday, the Dallas Morning News’s online site reported that the Texas State Auditor is looking into the situation to determine what has occurred and whether any rules were broken.

Is anyone benefiting from this debacle?  TEA, Rob Scott, Robert Scott, and the investigators are not doing anyone any favors here.  It is a bit like having functional areas in a company pointing fingers at each other…  The more finger pointing each one does, the worse everyone looks. 

It is time to get beyond this issue.  TEA representatives need to work and play well together.  Here is one way for our public servants to fulfill their obligation to the residents of Texas and their children… 

First, help us understand what has occurred.

Second, accept responsibility for your roles in the situation and the resulting media feeding frenzy.

Third, implement the punishment that is associated with the actions that are involved under agency rules.

Fourth, the state employees who are throwing out the red herrings, if any, should reimburse the state for the costs they have caused.

Fifth, a plan should be developed to ensure this issue does not arise again.

Sixth, TEA needs to move on with the business of educating children.   

Is there anyone who would be harmed by this plan?  Is this plan anything other than what is in the best interest of all parties, as well as the children of Texas? 

 

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Negotiation Scenarios: Disparity of Bargaining Power
Thursday, July 12th, 2007

Suppose that Sam Supplier is with a small firm that is providing products and services to a large customer.  In this situation, Sam’s firm and the large customer are likely to have differences in their relative bargaining power.

Often, small firms are so anxious to win business, especially from large companies that they are likely to agree to provisions that can cause challenges for them. At times, the customers pressure the small firms to do more. In many cases though, the small firms pressure themselves to do so.

Whenever there is a difference in bargaining power, it is a good idea to talk about the small firm’s ability to meet the big customer’s needs. 

Think about what this scenario means for your business.  Specifically, consider questions like:

How could disparity of bargaining power arise for your business?

Are there certain signs that would lead you to think there is a disparity in bargaining power?

If the parties have disparity in bargaining power, what are some steps that you might take to deal with the issues?

What are some communication techniques that might help you identify and deal with disparity in the parties’ bargaining power?

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What should we do now where Iraq is concerned?
Thursday, July 12th, 2007

Many people - including those in the US - had strong misgivings about the wisdom of invading Iraq.  The planning was grossly inadequate.  The US appetite for sustained conflict was questionable.  But, our president made the decision to invade Iraq and our representaties supported that decision.

That is old news.  Fast forward to today.  Regrettably, the technology for uninvading Iraq does not exist.  We have to live with our actions up to this point.  And, we are responsible for the consequences of our decisions.  

In our government by pollster, we have seen a lot of polls about our support for the war in Iraq.  Americans oppose the war and are tired of seeing Americans killed and maimed.  We would rather see the money spent elsewhere.  We are concerned with the lack of progress.

All that said, what options exist for us today?  We could leave Iraq.  We might stay the course.  We might invite dialogue with countries in the region.  We might even engage in dialogue with terrorists.  Maybe, there are options for growing our influence quickly.  Potentially, there are other options that I don’t see. 

What other options exist?

Which options are best for Iraq, the US, other countries, and the world?

Once these options are identified, let’s come up with a plan that is based on factors within our control, rather than expecting Iraq or other countries to act in a certain manner.

Food for thought:

What is going to happen if we withdraw from Iraq today, as many are asking the government to do? 

Do you see it as realistic to expect the fledgling government of Iraq to solve the problem? 

 What strategy is going to leave us better off tomorrow than we are today as it relates to Iraq and international politics? 

Think about what can be learned from this situation for future decisions to intervene in or invade other countries.  What does this mean for our business decisions? 

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Where does one buy steelhead salmon?
Wednesday, July 11th, 2007

Reading the food section of today’s Dallas Morning News, I had a WTF moment when I read Tina Danze’s article about fish. 

One of the recipes is called Evita’s Dilled Steelhead Salmon.  Sure enough, the recipe calls for six one-inch thick steelhead salmon fillets with skin on.

I dare Ms. Danze to find a steelhead salmon.  Is that like a turducken?   

Steelhead and salmon are different fish.  Steelhead is a type of trout that goes into the ocean, but reproduces in fresh water.  It has a light flavor.  In contrast, salmon has a rich, full-bodied flavor. 

Have Ms. Danze or the editors ever eaten real steelhead or real salmon?  Stores usually sell farm raised varieties and that is what most restaurants serve.  It is about as much like the real thing as “pinks” are like real tomatoes. 

Sadly, people don’t realize though that there is a difference.  That is one of the problems with modern life.  If customers don’t know what the real thing tastes like, they have no way of evaluating what suppliers provide.  This is why it is so important to do what we know and to share what we know with others. 

 

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