The Principles of Partnering

The four principles of partnering

  • Mutuality: A common purpose with mutual benefit.
  • Commitment: Parties are prepared to commit resources to the mutual endeavor
  • Clarity: Each party is clear about who is doing what.
  • Openness: Both parties are prepared to raise issues concerning the quality of the working relationship.

Once I asked a supplier of a large retail chain” “What is the state of partnering in the food sector today?” Here is his answer.

“Where do I start?

The retailers are all using the term but few, if any, show any understanding of how to make it work. In truth there is no partnership – the term is no more than a commercial convenience for the stronger ‘partner’, the retailer, to prey upon the weaker partner, the supplier. I think I know how it feels to be raped. I would put it that strongly; it is a mental raping.

I find myself licking my wounds from each of their successive actions. For example, I can no longer be confident that the products I supply won’t be put out to tender – they could and do seek alternative suppliers at the drop of a hat, I’m sure they see this as a normal part of their job. I can no longer be confident about what will be going on next. There is no trust in the relationship with retailers.

In fact you can hardly call it a relationship, in today’s world relationships count for little. What counts is short term, the bottom line. In short, the accountants rule”. “Last month, without any warning, one of the retailers invoiced and asked me to pay $ 20,000 per line in order to secure the retailer’s commitment to giving ‘priority treatment’ to the lines.”

This is not the only example of financial coercion in this sector. Another retailer sought a ‘refund’ of monies paid as the retailer’s shareholders were not impressed with the bottom line. It is as though the idea of partnership translates into demands for help from the strong to the weak during hard times, but no more than a slogan for normal times.

The problem comes down to lack of method. My informant gave an example: “One retailer adopted the ‘partnering’ slogan about five years ago. They decided we should all work on an integrated transport system. Clearly this is important; transport is a major cost. But what they did is ask for our views and then they just set up a system and told all suppliers to use it. We all needed to work on how to make it work, but that wasn’t done. The result was not good; their planners had failed to understand the logistics. Very quickly we found that things were not working well and costs were rising.

Then they made things worse. Instead of scrapping it, they sub-contracted the work to a haulier, assuming they’d know this business better. They maintained their insistence that suppliers should use this transport and as a consequence suppliers had to pay more than the market norm. To make things worse, the suppliers discovered that the retailer was also taking a payment for the volume of transport provided.

As suppliers became aware of how they had been duped, there began an attitude of ‘we’ll remember this and we’ll get one over on you next time’, and so the adversarial spiral was set. As my informant said “This is not partnership, it is selfishness” and selfishness breeds mistrust.”

Despite his experience, my informant remains philosophical; he can see that it is the systems that are at fault, not the players. He observes that today’s buyers are only doing their job, and that job is all about meeting targets. “The analysts have become too powerful in driving “short-termism” in our organizations, the buyers and suppliers are merely pawns in the game. But the net effect is we all lose.

He, like me, sees the irony that by their methods, they fail to achieve what could be done – they could out-achieve their targets by substantial amounts if only they changed their attitude.

He puts it this way: “If only they realized that partnering is not about ‘being nice’ instead of being nasty. It is about working hard together to achieve a common objective. It is not a soft option, but it is a smart option”.

By: Robert Sarwono – International Business Consultant at Trimitra Consultants

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