Do You Have Vendors or Partners?
How do you treat your vendors? Are they partners that are interested and engaged in your success or just a resource you use as needed? Many companies are too focused on having the upper hand and squeezing every last dollar out of vendor relationships. Both customers and vendors are guilty of this. When a relationship is focused on money and status, the rules change. If vendors gave their best price on the first quote and companies didn’t try to squeeze them, they could get money out of the way and focus on results.
People, as well as companies, have relationships with two general focuses, social and financial. Social relationships display the social rules of the culture they are in. Transactional relationships exhibit a more self-centered, win-or-lose focus. We know from empirical research in Psychology and Behavioral Economics that the further a transactional transaction is from a social one, the more likely social rules will apply.
Companies and vendors should have social relationships so that both parties are interested in and invested in each other’s success. Many companies don’t trust their vendors and vice versa. Why would anyone do business with a vendor or company they don’t trust? There are situations when a company or vendor is the only game in town, and if that’s the case and they’re not trustworthy, then you can put them in the financial relationship category. Other than that, it doesn’t make sense to do business with people you don’t trust.
If companies and vendors form social relationships, it’s more likely that both companies will be more successful. Look at Zappos and Semco. They treat their vendors like partners, invite them to company meetings and outings, and are dedicated to mutual success. In times of economic downturn, Semco has helped employees that they needed to lay off to start their own businesses that supply Semco or any other company they want to do business with. Talk about building loyalty!
Engagement, loyalty, and satisfaction are not just good metrics for employees and customers. They are essential in all your company’s relationships.
I Heart Zappos!
I just spent 4 hours watching a Zappos All Hands meeting. They started streaming these meetings last quarter, and there were over 1500 total views with steady participation of 165 people. What does it say about a company that 1500 non-employees would tune in to watch a business meeting?
I’ve worked in the Fortune 100, the military, state and federal government as well as educational institutions and small businesses. This was, without question, the best all-hands meeting I’ve seen. No surprise, really, but still impressive as hell.
They opened with an ad-libbed 1 minute “tour” of Zappos, followed by a couple of great musical performances, then financials. Then updates on various projects. A great questions and answers session followed this. They brought in two outside speakers that were inspirational and entirely unrelated for Zappos. Let’s not forget the wacky and original Zapponian entertainment! And so it went and went and stayed engaging.
The most impressive thing is that there was none of the bullshit content typical in such meetings. The signal-to-noise ratio was all signal. All the content was relevant or engaging. If your business has All Hands meetings, you need to watch how Zappos does it. Luckily they started recording the meetings in the second quarter, and you can find them at www.ustream.tv/zapposinsights . It’s all part of Zappos Insights, which helps companies find their culture and deliver outstanding customer service. The Zappos HR slogan: “Wellness is hot, benefits are cool.”
Zappos: Happy People, Delivering Happiness and Shoes.
Tony Sheih, CEO of Zappos, has just written his first book,‘Delivering Happiness, a Path to Profits, Passion and Happiness.’ It chronicles Tony’s life, from childhood entrepreneurial efforts to college and his time at LinkExchange. In some ways, it reads like Ricardo Semler’s‘Maverick, The Success Story Behind the World’s Most Unusual Workplace,’ Both books talk about lessons learned, mistakes made, and happy coincidences that lead them to success.
What is Zappos? It’s not a ROWE (Results Only Work Environment). It’s not democratically run, like Semco. Zappos does manage to keep its employees very engaged. Engaged employees result in growth and profits by way of creativity and innovation. The management, led by Tony Sheih focuses on the company culture and delivering happiness.
Zappos has a Culture Book it publishes every year. Everyone who works with or for Zappos is encouraged to contribute to the book describing Zappos culture. They publish all comments and only edit for typos, so the good, the bad, everything gets published.
Zappos does use carrots and sticks, though in a way that employees can control. You can take classes that will bring you to the next career level, and after taking them, you get a small raise. You can take them at whatever speed you like or not at all. Employees are empowered to do their jobs in whatever way works best. There does seem to be a large amount of autonomy. If you look at the Zappos Core Value Document, it’s obvious that they focus on mastery as well:
Create a fun, creative work environment where people are largely self-directed, are encouraged to get better at what they do, and acquire new skills, combined with being a part of something larger than themselves and the result is growth and profit. While Zappos may not be a new business model like ROWE, Results Only Work Environment, it is game-changing.
Their purpose is their culture and delivering happiness. They’ve put most, if not all, of their marketing dollars into customer service, letting their customers be Zappos marketers. This approach is one of the cornerstones of Zappos’ success sounds like it came out of Seth Godin’s playbook. Check out www.deliveringhappinessbook.com. Tony is trying to start a movement.
