Reflections on corporate life
by Jim Frankley
"Too many overheads" were the words I heard whispered sotto voce by the grumpy-looking character behind me as the final presentation drew to a close. Yes, it's conference season again. No, not the political sort, but the annual gatherings we hold for suppliers to come and hear our latest plans and challenges; something along the lines of "Here's what we want to do this year, and here's how much we'd like you to stump up to pay for it".
As I walked to the podium to deliver my piece, I found myself fulminating in anger. I didn't recognise him personally, and I suppose he was not aware of who I was, but it seemed disingenuous for him to damn all the hard work we put into these events with such a throwaway line. Presuming him to be the Director of Sales Prevention for one of our vendors, I plotted my revenge. Act in haste and repent at leisure? Not this time, I thought, with 20 yards to go.
We've worked hard to refine our supplier conferences. What started out many years ago as somewhat gawky events, attended primarily by local vendors receiving a clear but blunt "We want X per cent reduction in Y years" have matured into quite a show - a kind of son et lumire of purchasing.
We now group suppliers by category, meaning we run several such events annually, after realising we were diluting their competitive effect. Having all the makers of the same product in close proximity to each other makes it rather like a trade show, but on our terms. We are always careful to invite new suppliers from around the world to stir up competition even further. No booths, no cosy chats, no "executive club passes" - just raw competition.
Failing suppliers have, on occasion, been left off the list, leading to urgent calls starting "Er, we've heard you're running a conference and were just wondering whether our invitation...". It never ceases to amaze me what suckers for punishment some vendors are, actually wanting to come along to hear how much less we're going to pay them.
Interestingly, we also find that our stakeholders are keen to attend. So much so that in the morning we hold a colleague-only pre-conference. Vendors walk into a "meeting in progress" environment and the effect is palpable. It also means that as the final "X per cent price reduction challenge" is delivered at the end of the day, only half the attendees feel like all the air has been sucked out of the room. It's amazing how, in the right circumstances, sales folks can look like goldfish - mouths open, eyes bulging. It reminds me of the old joke "How can you tell when a salesman is lying?" Answer: his lips are moving! The exception that proves the rule is the climax of a supplier conference.
Some stakeholders are even keen to present. We routinely have one of our marketing types take the stage, ego freshly massaged, to tell our vendors (and us) how critical the supply side of the business is to their plans. Strange that, because afterwards they disappear for a whole year and try hard to ignore us. It must be a seasonal thing, or maybe it's the free lunch, but I can't help thinking it's the thespian in them that makes them want to bask in the limelight. Every time I see them I marvel at how they just come across as, wellÉ salespeople. Even they gasp for air as we issue our latest price reduction targets.
One of our newly arrived marketers commented recently how he hated everything we did in purchasing. I was about to respond when he finished his sentence with "... so please keep on doing it!"
But it's my commercial colleagues from purchasing that I am happiest to watch. They demonstrate such mastery of their categories as they weave the spell of "un-marketing". We used to buy "products", or "services", or even "product/service packages". Now vendors want to sell us "solutions". Watching a buyer reduce a category down to its bare essentials along the lines of "No, it's not a total packaging solution, it's a cardboard box" is a rare treat indeed.
Arriving at the lectern, I found myself saying: "Thank you for sitting through all our presentations this afternoon. I gather that some of you feel that there may be too many overheads involved." That got his attention - if looks could kill. I continued: "I couldn't agree more. We are certain most of your businesses have far too many overheads!"
Jim Frankley (not his real name) leads a purchasing function in a Fortune Global 500 company. He can be contacted at frankleyspeaking@cpoagenda.com
