Well, now we know how bankers control our business lives!

Let’s get right down to it.  Your banking relationship can be like a great marriage or a bad trip to the DMV.  In most cases it is strictly your choice.  But the results of that choice will reverberate for what could be years.

Yes, we will spend a moment reviewing the SVB-Signature Bank crisis that recently left many of us losing sleep. But we will do this in the context of our decision-making and protection of our businesses.

For a start…

Did you even think of spreading your banking risk when receiving your first investment? Only 18% of SVB’s deposits were insured.  Yes, I know much of this excess was from companies with lots more in the bank that we will even have.  So, ask yourself if any of the executives or investors for those companies even considered spreading the cash among several banks just for safety?

We want to impress our bankers.

That’s natural. We may need our bankers when times are tough. Larger deposits now do impress bankers.  But looking back on the SVB crisis, we dodged a bullet.  Would we do it again?

Don’t le banker control our businesses.  Think: protection first. Impressions second.

Now to the reasons to want to impress your banker:

How did you open your first bank account?  Did you just walk into a branch, fill out the forms, take your first ten checks from your newly-opened account and leave?  Do you even remember the name of the bank employee who helped you with that transaction?  Well, that would have been your first mistake.  As I’ve found in numerous companies over the years, the initial visit sets the stage for an entire relationship to follow.

[Email readers, continue here…]   But why bother with a relationship if all you want is a checking account?  Well, it’s time to tell a few true stories to illustrate why you should cultivate a relationship with a banker.  And it is never too late, even if you opened that account years ago.

Here’s an example – an unintentional overdraft in your checking account.  Most of us have suffered this at least once if not more often.  Whether caused by sloppy accounting or bad cash control or by a third-party taking money from your account for a recurring charge – or even by a PayPal purchase not recorded in the books, people or companies with marginal checking balances will someday be hit with an overdraft.  Today, many banks charge $35 or so for each check paid with insufficient funds.  One of my companies was recently hit with ten such charges in a single day before they realized the error, resulting in $350 in overdraft charges in a single day.  So? Here are two alternative responses.

Relationship banking: If the CEO or CFO had no relationship with the banker in charge of the account, there is little chance of receiving a waiver and reversal of the charges, even if your history with the bank is flawless.  On the other hand, a good relationship and established history could and would usually result in a call to the banker, a short and rational explanation, followed by your banker’s immediate promise to reverse the charges.  Yes, if this habit becomes routine, all bets are off, sometimes including whether the bank will keep your account open for you in the future.

And there are more important issues.  Most business banks will grant a $50,000 line of credit through a bank-issued credit card, often requiring a personal guarantee.  That is an expensive alternative, with costs for amounts carried over even for a few days beyond the due date running between 8% and 24% when annualized.   With a good banking relationship, your banker can help with a line of credit at reasonable rates, fitted to your needs, and established in a way that will not drain cash each month affecting business health and growth.  Yes, most banks will require a personal guarantee for such lines of credit, and even for equipment, receivables or other secured loans.

There is usually one exception:  Some banks, especially those known as “venture banks,” will recognize the issue of a company with multiple investors, especially with a venture capital company as one of those.  By substituting a small number of warrants to purchase stock in the company at a reasonable price for what would have been a personal guarantee, those banks will eliminate the need for the founder or CEO to sign such a guarantee, trusting instead the relationship with the VC company as of overriding importance.

Then again, this is how SVB got into trouble.  They cultivated relationships with companies where VCs do their business and suggest this for their portfolio companies. So, remember “protect the business.”

There are many types of bank loans, including those guaranteed by the Small Business Administration (SBA) in which the bank and SBA share the risk for the loan.  It is worth spending time with your relationship banker to discuss cash management, banking needs, and various opportunities.

But what happens when something goes wrong?  Sometimes you get into a cash bind and cannot make a payment or even need to restructure a loan.  This is the time when your personal relationship with your banker makes or breaks a company.  Sounds a bit dramatic.

But think this: It is better to owe the bank than have them owe us!

Ever hear of the “workout” division of your bank?  I hope not. That is the group your banker turns to when your account has shown signs of being too high a risk for the normal banking relationship.  Your banker is removed from the process once that divide is bridged, and you are introduced to a “workout specialist” who dictates your banking future, typically by establishing new rules requiring accelerated repayment, perhaps sale of assets, direct bank collection of receivables to pay down loans, and other mild to draconian efforts to protect the bank and reduce its exposure.

You do not want to be sent to workout. 

The risk is that the workout division will become much more aggressive when the bank is in trouble.  Sound like a possibility here?

On the other hand, if you have been communicating your progress both positive and negative to your banker on a regular basis, that person can mitigate the more draconian moves if she or he understands the reasons for a temporary setback, having history and confidence in your abilities to work through the problem.

So, it is all about the relationship you establish when first walking in the door of your bank.  And it is not too late if you failed to do this back then.  You may not know who to call, and a cold call or visit to the local branch is a good start to establish that relationship and begin or reinforce the positive aspects of the banking experience.

This, along with thinking of protecting the business, It is just one more of the things a good manager does to ensure the ultimate success of an enterprise.

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How will you ride the next wave?

“Re-imagining” our lives

The world is experiencing a new era of re-imagination, in which virtually all our old ways of doing things are being uprooted by new, more efficient and more widely available methods of accomplishing old tasks.

We collaborate using Zoom, Teams, Salesforce, Yammer, Skype, GoToMeeting, Fuze and hundreds of other tools not available to the last generation of whiteboard, personal meeting or teleconference users.  We read increasingly using our digital devices.  We compute using our smartphones and tablets.  We use gestures or our voice to control our engagement with our technology.  We take courses on-line.  We bypass the middle person for services and information.

We are learning to use new tools.

ChatGBT and Bing AI are just two of the new tools that are already changing our lives.  It won’t be long before another round of layoffs comes, and these new tools will create new jobs to fill the gap.

We watch our news and entertainment anywhere we want to on any kind of device we choose.  We move boarding passes, coupons and more off paper and into the digital world.  Many of us now never physically touch our music.   We recruit and hire using LinkedIn or other resources, replacing job fairs, campus events and paper resumes. We use QR codes to simplify the process.

Examples of re-imagining the business.

There are hundreds of other examples of re-imagination everywhere we look, making our lives easier and our reach greater than ever before.

The principal drivers of this re-imagination are the hyper-growth of the mobile Internet, consumer-controlled commerce, the rise of big data, and “globality.”  Let’s explore examples of these and more.

The mobile Internet – The latest major computing cycle

[Email readers, continue here…]   Over the last fifty years, the world transitioned from mainframe computing to mini-computers to PCs to the desktop Internet.  And now we have made the largest cycle of all – the move to mobile Internet computing.   With 7 billion people on the planet today, there are more than 6 billion mobile subscriptions, up from just 720 million in 2000.  Mobile workers are quickly overtaking the fixed desk worker and long-distance traveler.  Mobile commerce is up 552% in one year (measuring cyber-Mondays).  The mobile web will become what desktop Internet became in the 1990’s – the standard platform for anyone doing business.

In three years, as web browsing and TV watching minutes per day remained constant, mobile consumption rose by double to over two hours per day.   Fifty-seven percent of teenagers say that their mobile device is the “center of their universe.”   We are entering the smartphone era, where 65% of time on our mobile devices is spent in non-communicating activities.  We are treating these more as computers and less as phones. And almost half of all homes have at least one tablet device, replacing traditional computers for most tasks.  And we carry access to our entertainment with us, bypassing the need to be entertained by others while away from home.

Big Data – threading the needle while still in the haystack

By 2024, there will be an estimated 8,200 gigabytes of stored data for every person on earth.  That adds up to 80 with 21 trailing zeros.  In my country, USA, there are three million data centers in all, accounting for 2.2% of our nation’s use of electricity.  Examples of this massive accumulation of data abound. We could store all the world’s music on just three four-terabyte disc drives. There are thirty billion pieces of content shared on Facebook each month.   If we analyze the potential value of that data to various industries, we can imagine a 60% increase in retailers’ operating margins, or $600 billion in value to various enterprises from mining personal location data.  An estimated $180 billion will be invested in data analytics by 2024.  This is big business.

How do we use big data? 

We will enable segmentation of the population to produce customized messages and actions.  We will replace or support human decision-making with automated algorithms. We will enable a generation of experimentation with innovative business models, in our industry making today’s form of revenue management look like a primitive art.

The true value to us will be in analyzing unstructured data, estimated to be 80% of all data stored, from blogs, social media, pictures and video.  None of this could be mined successfully in the past generation of technology.  Think of 6 million automobile comments, or 30 million political comments, 200 million travel comments, or 150 million consumer electronic comments posted each month.

Retailers such as Staples and Home Depot are already charging shoppers different prices based upon where they live, income levels and proximity to a competitor’s store, among other mined attributes.  Will hotels be next?

We are in the “age of recommendation”

Already, 69% of consumers research their product, service and guest stay decisions online.  62% look at online peer reviews.  And 39% compare prices across alternatives.  This cat is out of the bag, driving prices down, democratizing search and supply between branded chains and independent properties.

With this little space and time, it is not possible to expand upon other macro-trends, such as socializing commerce, increased trust in the cloud for storage and transactions, exponential growth in computing power, green technologies, and the continued amazing growth of the Internet in Asia, Latin America and now in  Africa.

But it is certain that being informed and planning well for that future will give you a competitive advantage over those who do not.   An African proverb states “Tomorrow belongs to the people who prepare for it today.”

Posted in Finding your ideal niche, Growth!, Positioning | Leave a comment

Are you still flexible enough to be coached?

Why should we ask this question?

As an early-stage investor, the first test for me is whether “my” entrepreneur is flexible in both the plan and execution of their vision (since from experience almost everything about a business plan changes over time), and whether that person, no matter what age or experience, is coachable.

Doctoral theses have been written on this subject. 

Early-stage investor groups often list these traits at or near the top of their list when filtering opportunities for investment.  And I have numerous stories from personal experience that reinforce these two traits as the most positive indicators of future success in business.

Teaching about the five types of resources

In my book, “Extending the Runway” (Second Edition, Berkus Press 2014), I explore the thesis that there are five basic types of resources an entrepreneur must exploit in growing a successful business: time, money, process, relationships and context.  Understanding the effects of each upon an entrepreneur and early-stage business plan is critical.  Being able to adapt to the realities and changes in the fast-moving environment is essential.

Let’s test your flexibility.

Flexibility: the context in which a business plan envisions the enterprise in its marketplace is constantly changing as new products and services challenge competitors to innovate and adapt.  A plan written last month may easily need tweaking this month to recognize changes in the marketplace, the central context of the plan itself.  Are you tuned in to those changes, no matter how small?

Speed of change is inevitable.

[Email readers, continue here…]    Everything happens faster these days than even a few years ago, especially in the arena of technology, where many new businesses are developed each month to solve problems or take advantage of opportunities that existed at the moment of an entrepreneur’s vision for the future.

A recent example:

The advent of ChatGBT and other artificial intelligent applications took us by surprise but changed the rules for many managers and workers in numerous fields.  Did you take the time to study then discuss these implications with your staff or leaders?

Using our relationships to speed adaption

One of the best indicators of future success for an entrepreneur and an early-stage idea is the quality and depth of great relationships with industry veterans or technology gurus, or experienced successful business leaders.  Those relationships would be impressive but worthless if the entrepreneur was not coachable, open to suggestion and criticism from those who have experience enough to surface the issues unspoken but obvious to the coach.

Coaches have seen your movie before.

And finally, there are always ways to improve the process of design, testing, roll-out and marketing a new idea.  And many potential coaches out there have made mistakes in these processes at the expense of their employers or even their personal savings.  Since we all learn from our mistakes, it seems reasonable that we should learn from the mistakes of others, particularly those who freely offer their experiences as lessons for our enterprise.

It’s true: Many of us will ignore the advice.

I’ve seen entrepreneurs go through the complete process of raising money for a business from investors, many of whom were experienced and well beyond just friends and family, only to ignore all advice and execute a flawed business plan to death, ignoring the pleas and attempts at coaching by others including those investors.

Don’t be one of those.  Be flexible and be coachable.

Posted in Surrounding yourself with talent | Leave a comment

Where is your personal finish line?  

Here is one very personal question.  

“Have you figured out what you want to have, or to be, when you reach the end of your personal run in this business life?”

It is a fair question to ask.

Most of us work in our businesses, either as managers or owners, and rarely step outside

to think about how this will end in a perfect world.

Investors call this discussion “exit planning” and of course they include themselves in the discussion.

But this is more personal, isn’t it? 

If you are relatively young, you probably think of this question as too distant to consider seriously.  Of course, you’ll find another exciting venture and start again.

But for most of us, this question is or should be real and very personal.  And obviously, the answer depends upon the circumstances of our lives, our age, and our health among other factors.

The truth behind the question:

[Email readers, continue here…]    And the truth is that sometimes our business runs end badly, not with a crazy–large wire transfer or retirement bonus, but with a quick goodbye or a failed enterprise.

But this question begs for a positive answer. 

How would you like to see your finish line?  If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event?  Or do you plan to pass control to the next generation if appropriate?

Considering the alternatives early in the timeline helps you to monitor growth in terms of valuation, weigh the value of continued investment, bring family members into the discussion, and picture the end game in your mind.

Over the recent weeks in this blog, we have examined issues related to all phases of business management, including a piece on “evergreen companies,” where your picture of success is one involving the next generation continuing your good work, and not a sale of the company.

 But we have saved this question for last. 

Where we have examined your management style and given insights into your business life, now we ask you to consider – even if just for a few minutes – that next or last stage.

Perhaps for the first time, this is a question to share with family.  From considering retirement to plowing right back into another run, family is deeply involved in this, and should be.

So here is my wish for you.  Consider what you want in the end from your years of work, often years of sacrifice between business and family, with business often winning more of the time battles.  And picture how this should finish.  Make that picture vivid and actionable.

Then work toward and enjoy someday crossing that finish line just the way you envisioned.

Posted in The liquidity event and beyond | 1 Comment

Things going right? Control your euphoria!

One thing a senior manager can count on is that someday, something will go right, very right.  Well, after all the disappointments, pressure and outright failures, this is NEWS.

So, we tend to go overboard a bit. 

As a member of the board, I’ve received calls on weekends, at night and texts at hours I didn’t even think existed – from CEOs who couldn’t control the euphoria.  A successful test.  Completion of a software project by the remote workers in (Philippines, Brazil, Armenia, fill in the blank… Just name a country whose daytime is our nighttime.)  You get the idea.

Now, even those late-night awakenings don’t bother me.

I can get behind the excitement as well as anyone, especially when my money is riding on the outcome.

The problem sometimes comes shortly thereafter. 

Guided by the enthusiasm of the moment, management orders (fill in the blank from your own experience here) an early release, increased spend for marketing, hiring more people to handle expected demand or early manufacture, or maybe just feeling so optimistic – that the conservative approval of spending is suspended in anticipation.

A moment, please… 

[Email readers, continue here…]    Remember to think of the many steps in the supply chain.  That success is – by definition – just one of many such steps, and others will be affected almost always in negative ways not yet considered.  Early release?  What happened to the careful rollout plan?  The capacity analysis? The cash requirements forecast?  Product reliability in the field?

                But no–one is immune to this disease.  

It isn’t hard to be optimistic, and it is a joy to see others be euphoric, or to be so yourself.  And yet, I’ve seen and heard stories of companies that ramped prematurely directly as a result of management euphoria, especially in the software and medical device niches.

Feeling a bit euphoric?  Congratulations. Now calmly analyze the next steps to success before placing your foot on accelerator…

Posted in Depending upon others, Protecting the business | 1 Comment

Sell at the top? Avoid the race to zero!

When do you sell your company? 

Obviously, we all want to sell at the top.  And there is the problem.  How do you know when you are at or near that right point to sell for maximum value?  Those of us in the business of calculating (guessing) this mythical peak in value often make the same mistake as our entrepreneurs.  We hang on just a little bit longer, expecting continued or accelerating growth and value as in previous periods of the same.

But there are wolves in the woods.

Yes, there are – when it comes to entrepreneurial growth.  Companies sometime run out of cash in the midst of their increasing success, and often find that sources of loans or investment are not freely flowing at the moment of need.

Growth brings financial issues.

Young companies have been known to outgrow the abilities of management to focus and direct them, failing to make the transition to organized, stable growth.  Competitors, seeing a successful development of a niche, flock into the competitive void with products or services built with a fresh view of the current environment.

[Email readers, continue here…]   Think of major companies, public and private, that have lost their shiny appeal over time, including Zinga, LivingSocial and Fisker in this generation – and Alta Vista in the last.

So, the question: load up with more equity and dilution? Or sell now?

For young companies, often the question is whether to suffer a new round of dilution to stimulate growth, or to sell earlier and not share the (presumably) increased proceeds with additional investors.  Not so long ago, Basil Peters wrote his book, “Early Exits,” after analyzing 150 young companies and their exits.  He concluded that the sweet spot for valuation was in the $20–30 million sales price range, and that many, many times more deals were completed in that range than above $100 million in valuation at exit.  Adjusting these numbers to fit your circumstance, the conclusion is that waiting for higher value after sustained growth becomes more and more of a risk in the majority of early stage cases.

What about those unicorns?

There are only a few Uber or AirBnB investments to point to – where the street value of the company may ultimately validate that amount of investment.  LivingSocial took in $583 million in capital in 2010 and 2011 with little left in time to show for the investment and tremendous dilution to the founders.

And some of us know from experience that, in a retrospective view, some of our entrepreneurs and their boards of directors pay the ultimate price of erasing all economic value by waiting too long.  In such instances, the phrase, “race to zero,” perfectly describes the result of a miscalculation in the name of either optimism or greed.


Posted in Finding your ideal niche, Growth!, Hedging against downturns, The liquidity event and beyond | Leave a comment

About personal use of corporate assets

Here’s the IRS take on the issue:

It is no secret that the IRS carefully looks below the surface for personal use of company assets (including cash) in its corporate income tax audits.  This insight addresses more the impact of such behavior upon the actions of employees and others who observe that behavior from a senior manager or owner of a business – and know that they cannot say anything about it without jeopardizing their jobs.

Is this just an earned perk?

Use of a corporation as a personal piggy bank seems to be an earned perk in the mind of some entrepreneurs and some CEOs, reasoning that the only harm in doing so is in taxes never paid to the IRS.  The truth is that there is a much deeper degree of damage done to the moral and ethical fiber of the company itself, and certainly to the credibility of the executive or entrepreneur with employees.

Addressing company culture with negative actions

[Email readers, continue here…]     The culture of a company is created from the sum of many parts, most all coming from the top.  One of the most toxic shocks to good culture comes when a promise of ethical decency and mutually fair behavior is breached by a senior manager, observed by others.   Think of the effect of locking the supply cabinet only to take from it whatever the person controlling the security of the cabinet wishes for personal use.  Or of the reaction of your accounting person when asked to book obvious personal uses of the corporate credit card as company expense.  Or flaunting the privilege of that corporate card by charging expensive meals with high priced wines when not entertaining outside guests.

The most damaging effect of all…

And there is another degree of damage to measure in more extreme cases – the robbing of the entity’s ability to finance its own growth, sometimes causing reliance upon bank loans or other sources of capital.

Those in charge, even if one hundred percent owners of the business, have a special obligation to be open, lawful, and ethical in the use of those assets upon which others depend for their continued jobs and living wage.

Posted in General, Hedging against downturns, Protecting the business, Surrounding yourself with talent | 1 Comment

You name the price; I’ll name the terms.

I admit that my dad taught me this when I was just a fifteen–year old kid starting a business and negotiating with suppliers for the first time.  But I learned it again and again in my various business lives.

Here’s a striking example.

The most striking example was the one hundred million–dollar purchase of one of my companies by a New York private equity investor using only five million of its cash.  The rest of the purchase price was concocted from a brew of zero-coupon bonds (where the face value is many times the invested amount until the reduced cost bonds mature thirty years later), and borrowing using the target company’s accounts receivable and other assets as collateral for a loan to purchase the company.

Offering too little in an acquisition to satisfy the seller? 

Satisfy the seller’s need to claim a higher sales price victory by moving a substantial part of the price into a future earn–out or using the target company’s own cash to pay part of the price, or asking the seller to finance a significant piece of the sale.  With the latter, you can make the price seem higher just by calculating the full amount of interest to be earned by the seller over time, adding that to the stated purchase price, and announcing a price much higher than the present value of the purchase.

Be aware of the seller’s ego and play to it…

[Email readers, continue here…]    There are so many ways to satisfy a seller, sometimes a seller’s ego, by making a price seem higher than the reality of the purchase.  In the investment world, if we are unable to come to terms over the valuation of a company, we sometimes add penny warrants to sweeten the deal, allowing the investors to own a larger stake in the company at any time merely by exercising the warrants.  If there are enough of these, the CEO or founder can announce a valuation as high as double the actual negotiated enterprise value of the company.

Using this technique with a supplier

And how about a product purchase where you cannot come to a successfully negotiated price with your supplier?  Ask for extended terms well beyond sixty or ninety days.  Not only do you save the value of imputed interest, but you most likely will use, resell, collect from your customer, and even earn on the excess sales revenues deposited in your bank before you ever have to pay the supplier.   Almost always, such an arrangement is more favorable than factoring or private asset lending, does not take away from your ability to borrow from other sources, and allows you to make customer promises and profits you could not have made otherwise.

The lesson: There are many ways to bridge a gap.

Don’t rule a too–high negotiated price out until you think carefully about the terms of purchase as a tool for leverage.  Sometimes, the person on the other side must keep to a minimum price you cannot understand or afford.  Just think of the second tool, terms, you can use creatively to bridge that gap, whether driven by seller’s ego or competitive necessity.

It’s an easy rule to remember.  You name the price; I’ll name the terms.  What power!


Posted in General, Positioning | 1 Comment

Is your strategic partnership just a glorified press release?

Celebrating that strategic partnership

Many of us make it a priority to find and partner with companies that can add to our offering or extend our reach.  And we rightly celebrate each such pairing, often with a mutual press release.

And sometimes that’s all we end up doing. 

Call it a “press release partnership.”  Or an opportunity missed.  Or a relationship not nurtured.  Finding a supplier, distributor or other partner is the easiest part.  Carefully planning the mutual activities to move toward a stated goal is something else.   It takes real effort and planning on both sides of a partnership between companies to make it work.

But wait! Is it that simple?

Depending upon the size of the companies and complexity of the products or services involved, it is fair to assume that you’ll need to dedicate a resource to this effort, sometimes a full-time resource at that.  Consider a sales relationship where your product will be in the bag of salespeople from the partner company.  After an initial focus, perhaps during an introductory meeting or training session, the salespeople hit the road.

Why it often fails:

[Email readers, continue here…]   And that’s the last you often hear about their promotion of your product – because they are commissioned upon their own company’s products and measured by the success of those sales, not yours.  Yet, the partnership was intended to help their people sell their products by enhancing or completing their line.  Why would this partnership – one that benefits both companies – fail to succeed?

Who is responsible for strategic partnership success?

In spite of the best efforts of senior management in creating such a partnership, the success always lies in the hands of those closest to the end customer.  The only way to assure continued success in such a relationship is to permit those in sales to be in direct contact with their counterparts in the other company, something often discouraged by sales management from the selling organization as a distraction from achievement of quota for both the salesperson and manager.

And back full circle

Which brings us back to senior management and the original reason such a partnership was created in the first place.  Such a partnership requires much more than a general agreement at top levels.  Consideration of pricing strategy, mutual compensation, training of salespersons, creation of custom collateral material, availability of technical sales support, continued contact between sales counterparts, access to those who act as technical liaisons to sales, and updates to the field of changes and enhancements are all components of a successful partnership.

None of those components are easy or cheap.  Without a plan, these partnerships usually end up merely as press release partnerships, fading into the sunset shortly after announcement.   Do you recognize the symptoms?

Posted in Depending upon others, Surrounding yourself with talent | 1 Comment

Can you get to the right person when you need to?

Can your contact solve real-world issues?

I recently experienced an amazing effort of outreach by a vice president of a large national customer asking for a meeting with the product development team of a critical supplier, one of “my” companies.  The goal, the VP stated, was to “see if these guys are battle hardened veterans that have dealt with the real-world product and delivery problems” of a nationally important customer.

All I could say was “wow.”

The VP apparently has done this often enough to create real relationships with supplier teams, not just senior management.  And according to his staff, the result is a cementing of relationships in which all members of the development team of the supplier feel a personal obligation to make efforts to meet the needs and satisfy not just the customer but the VP personally as well.

The executive “pass the potato” game

[Email readers, continue here…]    Usually, executives meet with executives and promises are made then passed down through the ranks.  But in this unusual case, the customer made a real effort to break through the usual chain and be comfortable with the full team in a critical supply chain environment.

How the right contacts can do more than solve problems

What could be construed as a threat to management of the supplier turned out to be a cementing of relationships between the two organizations.  The worrisome risk that opening the meeting to those subordinate employees not prepared for such an encounter was never realized.   Problems that might have later created stress between the companies became mutual challenges worked on by the whole team – not just because they were directed to overcome a problem but because team members felt a personal obligation to the customer’s VP.

Have you experienced this frustration?

How often have you worried over having to be the protector of your team, the intentional barrier between team and customer?  Most of us would be motivated to do so to promote team efficiency and to filter messages into a form all could understand and follow.  Yet here is an example of personal outreach by a major customer that resulted in better outcomes for all.

Sometime management must let its guard down to promote communication between those actually performing the daily work.  In this case, the risk paid off.  Would you have taken that chance?

Posted in Depending upon others, Surrounding yourself with talent | Leave a comment