Duty of care in the supply chain – who has the need?

Purpose

I do want this blog to stimulate some discussion and I hope legal opinion. Mind you, legality is a much lesser issue than ethics or morality. I simply want to state a case on behalf of SMEs and micro businesses. And it is fundamentally to do with communication.

Honesty and an apology

Do you ever wonder where you sit in a supply chain and why it is that people you would expect would communicate honestly do not? I do, and sometimes feel ashamed of the way in which I treated small companies and individual contractors when I had an Executive role in a big corporate. To all of those to whom I might have shown disrespect in the past I apologise profoundly. I now know what happens and also why – but why is not the subject of this blog.

Treatment of suppliers and CSR

A few years ago a large company to which I am a (very small) supplier insisted that any supplier to them should have a published CSR and Sustainability policy. Although it seemed an onerous expectation of a micro business providing coaching and training services, I did take it seriously and decided to define such a policy for my company. What better than to start with that customer’s own policy statement as a template? I looked at this carefully and decided I could adopt much of it but would go one step better when it came to dealing with my own suppliers and sub-contractors. So, my policy includes this phrase:

“We undertake to offer equivalent or better terms for any sub-contracted resources and we commit to timely payments of their invoices.”

Many of my friends thought that this stance was commercially stupid – I would end up taking the risk on debts from big companies. But I disagreed – and still do. Businesses are ultimately judged in the market by how they treat their suppliers as much as – and I believe ultimately more than – their end customers. This becomes their “ethos”. It reflects what they believe. Simon Sineks’s video about “Starting with Why?” also testifies to the truth of this. “People don’t buy what you do, they buy why you do it. “

Recent context

The recent publicity about Tesco and their alleged poor historical treatment of their suppliers (including delaying payment of invoices) is testimony to this argument. Press coverage in January 2016 suggested that whereas Tesco had improved behaviours in recent months, there were other upmarket high street names (one that has always been my shopping favourite, oh dear) that lagged behind Tesco’s’ recent commitment to 14 days’ payment terms to their small suppliers.

Customer or supplier

There is, though, another piece of argument that I need to probe. It is the concept of “customer”. It strikes me that, when looking at classical retail structures in a competitive market, the customer supplier relationship is clearly demarked. The customer (actually consumer) has a need or want; the supplier provides against that requirement. In other words, the “need” is with the purchaser. And consumer law backs the purchaser – the person with the need.

But in some commercial relationships, the opposite can apply. If the buyer is a big corporate and the supplier is an SME or micro-business, the need, especially when it comes to communication and a fair commercial relationship, is with the supplier of the product or service.

Illustration

Let me illustrate. I run a micro business providing training and coaching services to a big corporate. I need a high level of trusted communication (and relationship) from that customer so that I can plan my business financially and commercially. (Let us ignore the repeated delays in payment of invoices which are an irritation and cost to me.) The key thing is that an unexpected termination of a rolling contract or repeated cancellations or postponements could have a significant damaging impact upon my company. I believe in this instance that the customer owes a duty of care to the supplier – my company. So, timely communication of requirements and forecast is an obligation upon the purchaser of the products or services I provide to them.

But is that the way we are treated? Unfortunately, it is not. Big corporates are the worst. They care enormously about what their customers think of them (of course it has a direct affect upon their trading) but have little regard for the way they treat their suppliers (especially small ones). And, in this instance, if protection in law is needed, it is protection of the supplier as opposed to the customer that matters.

A reflection

Tesco appears to have recognised its supply chain responsibilities and the importance of their reputation in the wider market. The consulting and technology sector (the one I know best) should turn the same mirror upon itself.

The original Duty of Care legal precedent is worthy of a reminder. It referred to “acts or omissions which could reasonably be foreseen could cause injury to their “neighbour “.  “Neighbour” was broadly drawn and I understand that under English law it applies providing there is a contract in place.  So, “neighbour” includes supplier, does it not?  So, please, on behalf of smaller suppliers – let’s have some Duty of Care!

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Golden Circle

Why?

It is not uncommon for insights drawn from one domain to be startlingly relevant to another. Indeed human creativity can be seen to be geared to making connections between otherwise independent and unconnected ideas. It is what we do in our working memory. So I thought to share with you some connections between Simon Sinek’s insights and the subject of this blog – presentation design and delivery. They might just affect the way you tackle your next presentation.

The Golden Circle

A participant on one of my training courses commented about having been inspired by Simon Sinek’s TED video on what he calls the Golden Circle. Co-incidentally I had downloaded this video a few weeks previously because it resonated so much with my work in the field of leadership and communication. The result was that there were many parallels drawn and references made throughout the course to the subject of the TED (the “Why” question).

I do recommend a viewing of his talk. It is inspiring and its simplicity speaks to us all. One of his mantras is that “people don’t buy what you do, they buy why you do it”. He argues that companies and people who understand and communicate in this way tend to be the successful ones.

Observation

It does seem that many companies are almost exclusively focused on the “what we do” rather than “why we do it” and having spent many years in the Consultancy and IT Services sector it is clear to me that this has led to the rather dull sameness of many companies in this sector when viewed from the outside. They espouse (or say they do) much the same values, have tag-lines which are almost identical and use methods and approaches which are pretty much indistinguishable. You see the result in company brochures, fliers, credential statements and written proposals.

This is not to say that, within companies, smaller groups with more visionary leaders do not exist. They do. But I would suggest that often their pursuit of the “why” question is not understood or even tolerated by managers who have been groomed in the “what” and “how” world, so may not always survive the corporate mill. I have though also seen some very successful and highly motivated teams inside companies – and the distinguishing feature is their sense of purpose (“why”).

As an aside, the public sector is, I believe, much more in tune with the “why we do it” way of thinking. I would suggest that there can be, as a result, something of a tension when functions and responsibilities are moved from the public to the private sector, and the “why” element becomes obscured and effectively replaced by the “what and how”.

I remember a senior executive in the Rail industry saying to me that you could create a contract for anything and that therefore any service could be delivered under a contract. I disagreed with him then, and I would still. Contracts are great for “what” and “how”. But even the much vaunted “outcome based” contracts cannot really deal with “why”.

Relevance to message design

In relating the Golden Circle thinking to message design and presentations, there are many intersections. I mention a few here.

Why am I giving it?

The first question to ask before designing a presentation is to ask the question “Why am I giving it?” Many people asked this might offer “to share knowledge or information”. But it rarely is just that. In the vast majority of cases, when you really think it through, the purpose of a presentation is to affect the future actions of an audience. Otherwise, what is the point?

That future behaviour or action is where your presentation must lead, so it is the starting point in design of your message. Presentations of this sort are fundamentally about persuasion. People are persuaded (and make decisions) on an emotional rather than rational basis. As Simon Sinek points out, decisions are made in the limbic part of the brain.

Why should they listen?

In a business setting, turn your ideas into the form where your audience is, as far as possible, the subject of discourse, not yourself or your company. People like to be talked about; they like their issues to be discussed. They do not like to have to endure generic descriptions of methodologies or technical specifications, unless they have specifically asked for that. See my previous posting on “Forensic delivery”.

An audience will be encouraged (or not) to listen and be attentive within the first few seconds of your presentation. So make sure you have a good “Eye” – and make it about them!

Why is it true?

Assertions do not convince on their own; evidence and examples in presentations are about answering the “Why?” questions. Indeed those of you acquainted with the “Kipper” structure for design of presentations created by Willie Macnair of the Rhetorical Company will know that the left hand side of the “middle” is concerned with points, propositions and ideas. They create (or should) in the audience’s minds one of two responses: “Why is that then?” or “OK, but now prove it….” And that is what the right hand side does with evidence and examples.

Why should they care?

If you are going to engage emotionally with your audience, make it about them. The only really important people are the audience. The presenter is there only for them. As Simon Sinek says about Martin Luther King’s “I have a dream” speech, the crowd turning up were not doing it for him – they were doing it for themselves.

Thank you, Simon.