How do you pass on entrepreneurship to your suppliers?
For a business to grow in any environment it has to feed on information that it can understand and interpret. For it to thrive, these interpretations have to be original enough to allow it to gain an edge over its competition. These insights however, are irrelevant if the business cannot transform them into the right products, services, or actions.
Now given that some producers are by nature proactive and quite receptive to market dynamics, while others are less commercial but more creative in developing products, we can focus with the particular supplier on the relevant weakness: product / market opportunities, or product development.
And how is this communicated to the producer?
At the very early stages of a relationship, we try to explain to the producer that exploiting and/or creating market opportunities is not a luxury: it is a necessity without which we cannot survive. This approach helps us to attach a sense of urgency and excitement to the relationship, and sets the pace at which we would like to see things develop.
So you sort of set the stage in a way.
Absolutely, what counts here is that we are on the same page:
We have a need for innovative products that can potentially fill gaps in the market and for suppliers who can deliver these products according to certain terms – but we are also there to provide the necessary information and the support that will allow them to supply these products.
Interdependence and entrepreneurship are the underlying theme if you like: cooperating on the interpretation of information and on product development in order to thrive, and share in the success.
And this interdependence requires them to become entrepreneurial.
Sure, and as discussed earlier, this becomes apparent when we focus with them on customer outcomes. In a sense entrepreneurship is learnt as a byproduct of the initiative rather than a prerequisite to it.
What are some of the critical factors in this learning process?
There are two things that we keep an eye on and that are crucial for us as we look at a product’s future potential. Without them the chances for success are greatly diminished, and the risks associated with further investment in the product become more significant.
The first is to make sure that the producer sheds the illusion that we are the market, and this has to happen at the time of the second order. If they cannot do so they are either:
. incapable of interpreting information which is beyond our scope of control, or
. they are focused on short term gain.
In both cases, this diminishes our ability to to exploit or create opportunities with them.
The second is to make sure that the supplier is ‘delivering’ by the time their product has established a presence on shelves. If they have failed to do so they are incapable or unwilling to act on information, and this diminishes our ability to deliver outcomes for our clients.
And what about those insights?
Like the drive to succeed, they are also a byproduct of accomplishments. Our aim here is for our suppliers to accumulate the relevant knowledge in such a way that its interpretation is in line with our own vision. More on this later !