Valuing loyal suppliers and subs

Mar 15, 2010

I was recently interviewed for a magazine article about the residential redevelopment projects we do here in Fayetteville. In addition to figuring out why my houses sell either before we start working on them or shortly after gutting, the interviewer was trying to understand how it was that we could build such high-quality projects yet do them so quickly. One of the reasons— I told the interviewer— is that we have longstanding relationships with our subs and materials providers. They are rarely, if ever, working on a hard dollar bid or fixed price. Therefore, they can help each other out and not hurt themselves. And, they know they are going to stay on the team and do more business with us in the future if they do a good job. The obvious relationship between suppliers and subs to quality shouldn’t require any explanation, yet it seems so many firms today forget that the quality of their relationships with each and every provider has a direct influence over the quality of their output. If you believe in the benefits of these long-term relationships but don’t feel that you have formed as many of them as you would like, consider the following advice: Pick the right firms in the first place. Don’t give loyalty where loyalty isn’t deserved. Before you work with any business, check them out. What do their other clients say about them? What does their D&B credit worthiness report say about them? What does your gut instinct tell you about them? Have you met their owners? Are they the kind of people you want to partner-up with? The answers to these questions and more all have to point to this being a good company to do business with. Treat them like valuable employees. Why should a supplier of anything that is crucial to your business not be treated as well as an employee you want to keep working for you? Their egos, their sense of connection with the goals of the enterprise, and their morale all have to be considered every day if you want to keep them on your team. Include them in much, if not all, of your internal communications. Why not make your subs and crucial suppliers feel like real partners and key them in on your business plan, critical strategic direction, and daily happenings in your firm? New project announcements, employee happenings, and more are all pieces of information that could help them feel more like they’re on the inside of your firm, vs. the outside. Invite them to your meetings, parties, and more. Make them part of the family. Bring your best subs and suppliers to the Christmas party. Have them at your client open houses. Have them at your employee birthday parties, even. The idea is to make them feel like they are a part of the company as much as anyone inside the firm does. Plug them on your web site and other external communications pieces. There’s nothing like helping out with the marketing to engender loyalty among your subs and other suppliers. It costs you little or nothing, so why not? Don’t penalize them for every mistake. Things will go wrong. Errors will be made. Not to say you can forgive anything— but don’t sweat the small stuff. Every minor problem should not have to cost your supplier. Sometimes you can afford to eat a few mistakes— at least you can afford to volunteer to (they may not take you up on your offer to be let off the hook)— in the name of team-building. Tell them you care about them— don’t make them figure that out. Just say it. “We care about you;” “We really value our relationship with you;” “We consider you our business partners.” Most importantly, show them loyalty. Pick your subs and suppliers and then try to use them on every job that they can do. Don’t spread the work around unless it is absolutely essential. And if you cannot use them on a job, tell them why! Don’t make them figure out that their capabilities, geographical location, or lack of political influence is why you aren’t using them on the project— tell them that! The rewards in this business are many, but one of those that I have found rewarding and worthwhile over the years is having long-term relationships with every provider to my firm. Originally published 3/15/2010

About Zweig Group

Zweig Group, a four-time Inc. 500/5000 honoree, is the premiere authority in AEC management consulting, the go-to source for industry research, and the leading provider of customized learning and training. Zweig Group specializes in four core consulting areas: Talent, Performance, Growth, and Transition, including innovative solutions in mergers and acquisitions, strategic planning, financial management, ownership transition, executive search, business development, valuation, and more. Zweig Group exists to help AEC firms succeed in a competitive marketplace. The firm has offices in Dallas and Fayetteville, Arkansas.