Category Archives: Business

On Bids

bidEvery so often a bid lands on my desk. It’s either a current customer seeking lower prices or a prospect looking to see if we’ll compete for their business. Whatever the case, it usually means someone asking for bottom dollar, or close. No other qualifications matter. Such exercises drive me nuts.  Any company can find someone desperate or dumb enough to buy business.  Even we’ve been guilty of such stupidity, always discovering it doesn’t pay.  Some customers can’t help themselves.  Supplier madness is just too tempting.

Sometimes we run into a company that takes an entirely different approach. They work to find a way to create a win-win. I know that sounds cliched,  but it does happen. It requires hard work on both sides, a willingness to find creative ways to cut costs or limit price increases.  The process works because it cements partnerships that lead us to bring new ideas to them first and help them through hard times when needed.

Two or three times this year customers took this approach. They stated up front that they value what we bring to them, usually quality and new technology. Another appreciated our willingness to extend terms when they ran into a financial blip. Each wanted to trim cost, but they wanted to understand what we needed as well.  They didn’t want to disrupt a supplier relationship that worked, and valued that over the lowest price.

The approaches varied. One customer sat down with us and reviewed their packaging cost drivers. Plastic resin is one, but they understand we have little control over price movements pounded through by oligopolists like  Dow Chemical and Exxon Mobil.  However, this customer had an obvious way to reduce their prices. They used several different packaging sizes for the same item, an old practice that wasn’t required anymore.  Multiple bags meant we had to run smaller batches, which lead to higher prices. Together we worked to rationalize their bag sizes, taking four down to two, which allowed us to produce larger orders and reduce their prices.

Another customer took an entirely different approach. When they did their biannual bid we sat down and talked over their current prices. We contended they needed to go up, thanks to low prices exacted on prior bids and our need to cover cost increases in other parts of our business, like health care. We’ve done business with this company for many years and they appreciate the new ideas we bring to the table, and the consistency with which we meet their specifications. So they listened. In the end we compromised. We still provided highly competitive pricing, but we got enough bump to help. We kept most of our business.

On the opposite end of the spectrum there’s a company that bids their business every two years. They send a multi-page questionnaire asking about our technical ability, financial stability and willingness to help them develop new products. I spend hours answering the questions believing for some reason that even if we are not the lowest price, our service orientation and our engineering prowess will win the day. It never does.  The buyer awards the business to the lowest price, and my impassioned pitch goes to waste. Someday I won’t accept their invitation to bid.

Our company takes a holistic approach.  We do check resin prices rigorously, but award most of our business to the company that has delivered consistently good product. We work with our ink company to find ways to reduce cost, but we don’t toss them if someone shoots in a lower price trying to buy our business.  That doesn’t mean we never cut lose a supplier. Currently we have one on the way out. They didn’t deliver, rarely reduced cost and never brought new ideas.  So why be loyal?

Bid can cut prices. But they guarantee nothing when it comes to quality or service or willingness to work with a customer to reduce total cost.  Bids won’t reveal if a supplier will work with you when you run into trouble, as most companies do at some point. I know those companies that have gotten us where we are remain the ones which will drive us into the future. We hitch our wagon to them. We appreciate and value and help those customers that do the same.

Careless Email, Destructive Words

imagesMost of us have vented frustration in an email.  Some rant at the recipient like they’d never do in person.  A smaller subset stumble badly.  We hit “Reply All” when we don’t intend to, write a nastygram or some other uncomplimentary email about a person and hit “Send” only to  realize that the person who we are complaining about got the email.  Fevered attempts to recall it usually prove fruitless.  The unintended recipient either ends up embarrassed or offended.  Explanations may or may not salve wounds.  But damage lingers.

As a principle I don’t write nasty notes because they might get forwarded.  If I have criticism, I make sure I say it in person.  However I have hit the “Reply All” button and unintentionally sent an email asking another manager why one of his direct reports doesn’t understand his directions, only to realize too late that the message went to the direct report.

Recently something worse happened.  One of my colleagues had to deliver some bad news to an important supplier.   My colleague had done everything they could to ensure a good outcome.  But it just didn’t work out.  The email my colleague sent had several recipients on it.  One obviously unintentionally hit “Reply All” and sent an email questioning my colleague’s competence and even their motivations.  The result? Just like that our relationship, central to a new project, deflated.

The invective dripping from his email indicated feeling that went beyond this one issue.  But when he recognized what he had done — even before we had seen the email — he left a message on my colleague’s cellphone backpedaling.  “I shouldn’t have sent that email,” he said. “I’m sorry.  I was frustrated about something unrelated to you.”  That didn’t pass the smell test.  I immediately began asking myself why he had written it.  What frustration did he harbor that lead him to say what he did?  We must have done something wrong.

He compounded his error by making the lame excuse. The sender should have spelt out his frustrations.  Failing to do so chipped away his integrity.  He could have used his mistake to speak frankly about what we had done to upset him and in doing so strengthened the relationship.  Actually I think it best in these situations to go a step further and address the issues in person.  That tells someone you value the relationship.  Voicemail doesn’t.

One of his superiors called to fix the damage.  Doing so upset me further. Why couldn’t he call to talk in person?  Unfortunately the partner used the word “if”, as in “I am sorry if you were offended,” or something like that. The British writer George Orwell recognized the word’s power half a century ago in his wonderful essay “Politics of the English Language.”  Want to deflect responsibility?   Deploy “if”.  “I’m sorry if you were offended” shifts blame from the speaker and places it on the victim.  “If” distances the transgressor from their transgression.   The correct usage?  “I’m sorry he offended you.”

We did not hear from the writer for two weeks. That meant the wound festered for days.  “What had we done? What had we done?” droned on in my head.   Obviously not good for any relationship, personal or business.

When we finally talked he confessed that a series of frustrations unrelated to us caused him to crack when we delivered the bad news.  Plausible?  Maybe. But the length of time it took to call left too many questions unanswered.  His in effect uttering the hollow words of the protagonist in poet T.S. Eliot’s “Love Song of J. Alfred Prufrock: “That is not what I meant at all;/that is not it/at all.” didn’t really satisfy.  However it was time to move on.  The relationship mattered too much to allow an email to destroy it.  Ultimately I hope the lack of respect embedded in it doesn’t portend a sad end to it.

Whatever the case, the writer provided a reminder that “Reply All” has destructive power.  At least I can thank him for that.

 

Turning Disaster into Freeze-Dried Blueberries

dried-blueberry-productRecently I had the wonderful opportunity to dine with the executive team of Homegrown Organic Farms, which operates one of the largest organic blueberry operations in the country.  I’ve rarely met a more open, honest and intelligent group — and I am not saying that just because they are customers — so passionate about their product.  It being our first meal together we spent time swapping stories family and corporate histories.  My team, lead by local Xpedx technical sales representative Chris Kampsen then had a chance to learn about the range of new products they hoped to introduce.  They asked our help to develop the necessary packaging.

If you had told me I would be sitting at this table over steaks and Italian food nine months ago I would laughed in disbelief.  Back then we had nearly destroyed the retail launch of their freeze-dried blueberries thanks to pouches that failed during packing.  Quite simply the seals at the bottom of the bag which enable it to stand-up did not exist. You couldn’t tell from the outside of the pouch.  The impression left by the seal bar was there, so the bags slipped past quality control.  If we had stuck our hands in we would have noticed the problem.  But that wasn’t part of our quality control protocol back then.

We had been so proud of the pouch.  The life-like printing made the blueberries on the front come to life.  Pitch perfect blue.  The bag looked majestic, tall with silver edges, likely to catch the consumer’s eye.  Our company knew that Homegrown had taken a big risk being first to market with freeze-dried blueberries.  So we thought we had taken extra care with the printing and pouchmaking.  The project was also our first with the Fresno branch of Xpedx and we wanted to shine.

Trouble arrived on a Saturday morning around 6:30 a.m.  I happened to look at emails while driving my daughter to a track meet in the Central Valley.  I know you shouldn’t read emails while driving but the story was so compelling that once I started I couldn’t stop. Our salesperson Barbara Gaitan and chief operating officer Pallavi Joyappa and Chris were trading notes about a potential pouch failure.  And as the day wore on the news got worse and worse.  The 4 oz. pouches did not work.  If something wasn’t done fast the company would not meet its roll out.  We had no choice but to get good pouches out pronto.

Pallavi guided the rescue effort.  We sorted bags in inventory at our facility and shipped them.  That bought us a few days. Then we went back into production to make new pouches.  That meant finding a way to break into the schedule — a task that fell to my sister Maura — print and make bags.  Later we dispatched a crew to their packing facility to sort through the bags on the floor. It took two days in near freezing conditions but they culled out the failed pouches.

Homegrown made its first shipment thanks to the crisis management.  But we had left them with a hefty bill for ruined product.  Xpedx told me the not insignificant number and my head hit the desk.  It did not occur to me for a moment not to pick up the bill.  We run a company imbued with family values.  One of those is integrity.  We don’t stick others for problems obviously of our own making.

I didn’t expect Homegrown  to keep us as a supplier.  We had failed to deliver what they needed most — quality pouches.  But this company proved different.  They admired the lengths we had gone to address the issue and profoundly appreciated the efforts made by our staffers who sorted the pouches in frostbite conditions. The fact that we paid the bill without hesitation told them we stood by our customers.  To my great shock came the phone call that they planned to keep doing business with us.

Owner Karen Avinelis spoke plainly.  They liked our character so much they wanted to partner with us, provided (of course) that the problem did not recur.  I think I had not been so humbled in my life, and rarely so touched by a businessperson.  She not only taught me that doing the right thing sometimes pays, but that telling a person how much you appreciate their company’s efforts can touch the heart.  Her willingness to give us a second chance made me look at how we treated our own suppliers.  Today I’m prouder than ever of that pouch.  Not because of what’s on the outside but what’s on the inside.  The soul of a family, the Homegrown Organics family, and the best freeze-dried fruit I’ve ever tasted.

 

Emails, Texting and Business

iphone_addiction_798185Recently I banished iPhones and PDA’s from company meetings.  Over time it had become increasingly common to see staff checking their phones while a colleague tried to bring their attention to an issue. Or worse, they’d begin texting.  Not only is such behavior rude, study after study has shown that you cannot divide your attention between your phone and a conversation and do justice to either.  “Not unless you are negotiating Middle East peace,” went the one caveat I offered for getting on the phone during a meeting.  Our confabs aren’t very long, and if someone is expecting a call they can always bow out or reschedule it.

I became alert to the issue when I noticed people glancing at their phones during customer visits. Doing so just communicates exactly what you don’t want in the first place.  If I’m the customer I take away that we aren’t terribly important.  It doesn’t matter if you check by looking down at a phone slightly obscured by a table.  You can’t hide downcast eyes, nor fingers working quickly on a message.  Everyone present knows exactly what’s going on.  More importantly, the customer knows we’re not paying attention.

I don’t think anyone at our company means to be rude.  We’re just part of a culture that has become addicted to our phones.  Surveys show, for instance, that over 50% of Stanford University students believe they’ve developed an iPhone “habit”.  An unbelievable 8% report feeling that their iPad is jealous of their iPhone (these kids are smart?).  Businesspeople obviously aren’t immune.  We’ve become accustomed to putting our phones in our pockets and on our desks or on conference tables just waiting for that tweet, text, email or call to come through that requires  seemingly immediate attention.  Meanwhile those around us suffer from the attention deficit of others.

Worse yet, I think, people generally, especially younger employees, refuse to phone about an issue.  Instead they’d rather email or text.  When they email the cc line gets so crammed full of names it seems like a birthday invitation.  Then everyone kicks back their comments with those on the cc line getting whipped through circuits of information they often don’t need.  A wonderful rule I heard one company adopt states that after the third round emailing about an issue employees had to pick up the phone. Hearing a voice also helps develop a personal relationship in a way a message does not.

Some object to calling because they desire a paper trail.  They want proof a supplier or customer agreed to something.  The alternative? Summarize the phone call in an email, or better yet, trust that an understanding has been reached like we did in days of old.  Where agreement needs documentation, say like on pricing or scheduling, a quick note following a conversation should suffice.  If we are so suspicious of each other that we need documentation of every exchange, then other problems exist, trust being the most obvious.

Digital communications can present other tripwires.  Even in my wise old age I misunderstand tone in emails.  I don’t know how many times I’ve taken umbrage at something written only to find out I got it wrong.  On the equal and opposite side I’ve seen emails from normally balanced individuals that libel the recipient.  If the person had walked down the hall to work through the dispute, or picked up the phone, they wouldn’t have raised their blood pressure and that of others.  Instead, whatever caused the issue to devolve would have gotten solved.

I know I am no saint when it comes to iPhone abuse.  Too often I forget to turn it off when I get to the office. Then it rings during a meeting.  I’ve written angry emails when I should have picked up the phone.  I’ve disciplined myself over the last year to put those aside to decide once I’ve calmed down whether to hit “Send”.  Usually I end up spiking them.  My one exception: Complaint emails to airlines.  I figure venting can’t hurt because no one reads them anyway.

The final frontier remains internet use.  Games, shopping, stock trading, and so on also clog working hours, often leading to longer less productive days.  My first boss in journalism was an exceptionally disciplined man.  He came at 9, left at 5, and  wrote more stories in a year than just about anyone else.  Our chief operating officer Pallavi Joyappa is much the same.  I’m not there yet, but I’ve started to wean from Google.

I hope our iPhone policy helps us have more productive meetings.  Undoubtedly the messages will wait for us. Unless its President Obama texting for advice on Syria.  Then company policy says make excuses, quickly step outside and answer.

Follow

Get every new post delivered to your Inbox

Join other followers: