7. Relationship Management
This quality principle is all about the mutually beneficial relationship between the organisation and its interested parties, which will increase the ability of both to create value.
Relationship Management may involve:
- Recognising and selecting key suppliers
- Initiate supplier relationships that have a balance between short-term gains and long-term considerations for the organisation and society at large
- Be clear and open with communications
- Establish joint development and improvement of products and processes
- Have a joint understanding of customer needs
- Openly share information and plans for the future
Your interested parties - suppliers, contractors, partners, customers, investors, employees or society as a whole - can significantly influence the performance of your business. Ignoring the management of these relationships is a serious and common quality management error.
Poor relationships with your interested parties can significantly harm your profits – this can happen through increased costs, or by a reduction in revenue. Your top and bottom lines are at risk here.
It’s true that relationship management takes time. It takes money. It takes effort. But people typically like to take the shortest path between two points, so for many the easiest way to “do” relationship management is to…not do it. Many compliance professionals instead decide that it’s more important to make their documents look pretty, their priority for the day being to get the conditional formatting right on their spread-sheets.
Actively managing your relationships is a great idea that will pay off. If you even do just that minimum amount, you will be streets ahead of most other organisations. But…if you want go further than the basics and really excel in relationship management (and why wouldn’t you?), there are a couple of things you can do.
First, when there’s a problem, rather than diving headfirst into blame and shame, instead take a moment to step back. Bring the customer into focus. How does the issue affect them? What do you all stand to lose if the customer’s needs aren’t met? Pointing the finger at each other – effectively leaving the customer forgotten in the margins – moves you exactly nowhere. Changing an adversarial customer-supplier relationship into a mutually beneficial partnership will improve quality, reduce costs, and increase market share for both parties.
Second, focus on trust, especially in your supplier relationships. You can come back to what Deming says about suppliers. This is point 4 of his 14 points for management: “End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust”. Relationships are never a one-way street. It’s so easy to blame the other party for any issues that arise. It is much harder – and obviously, much smarter - to work with them to prevent the issue from happening in the first place. Trust can be a long-term game changer.
This isn’t just a fine theory. Take the example of the company Bama, apple pie supplier to McDonalds. The two companies have been working together since 1957, with Bama currently earning $250 million dollars annually in sales from their relationship with the fast-food restaurant. In all of that time Bama has never had a written contract with McDonalds. As Paula Marshall, CEO of Bama says: “McDonald’s in the only one that today, still, does not put any stock in a contract. They put stock in relationships”. You should consider doing the same.
The other Quality management Principles are:
- Customer Focus
- Leadership
- Engagement of people
- Process Approach
- Improvement
- Evidence based decision making
