This blog is based on my experience as the P&L head of a CPG business that I established and scaled up over a period of 5 years.
Since I was involved in projects that involved negotiating with capital equipment suppliers, raw material supplier from local markets as well as overseas, this role as a purchase lead for the business gave me unique insights on how to strategically manage the buying in a B2B environment.
According to me the following 7 laws are immutable when essaying the role as the purchase manager
- LAW #1: DON’T hire a vendor just because they give good presentations. It’s a myth that a vendor’s ability to help you can be gauged by how well the firm can sell. Unless you’re planning to learn from their style, a vendor’s ability to sell is completely irrelevant.
- LAW #2. DON’T hire a vendor just because they’ve helped you in the past. It’s a mistake to choose based purely upon a positive experience in the past. While the vendor’s products may have been useful once, they’re not necessarily the products that will serve you best today.
- LAW #3. DON’T hire a vendor just because you’re impressed by their CEO. CEOs are often dynamic, charismatic individuals that can wow a crowd at a conference or webinar. However, that doesn’t mean that the vendor has a product that’s useful for your company.
- LAW #4. DON’T hire a vendor because they’ve worked with your competition. If the vendor is responsible for your competitor being successful, then there’s a good chance they’ll try to clone what they did before. Imitating competitors is a go-out-of-business strategy.
- LAW #5. DON’T hire a vendor because they’ve got “best practices.” “Best practices” inside one industry may be nonsensical inside another. Even within one industry, the “best practices” that work for one firm may not work for a firm with a different strategy.
- LAW #6. DON’T hire a vendor just because they’ve got a good brand name. Going with a top vendor just because of their reputation is like buying a car just because it has a familiar name. Common sense says to decide what you really need before you pull out your checkbook.
- LAW #7. DON’T EVER hire a vendor who exaggerates or misrepresents. If your drill-down reveals that the vendor is not being entirely straightforward, remove that vendor from the short list. This is one case where “zero-tolerance” must always be the rule.
One of the TV channels just announced through a politician that the name of the rape victim who has galvanized the soul of an entire generation is , Jyoti.
Jyoti, ( for my American and English speaking friends) means light and the irony of the tragedy is not lost one me when I realize that it took her life to wake up the sleeping masses, who have meekly endured the tyranny of our rulers (please note- they are NOT our leaders) for over 65 years!!
If it takes a Jyoti to light the fire of revolution , then so be it!
If it takes a Jyoti, to wake up a sleeping giant, a slumbering leviathan, then so be it!
If it takes a Jyoti, to awaken the collective consciousness of a nation in stasis for over 65 years, then so be it!!
But as a practicing strategist, I have but a few points to make for those on the streets and fighting for a just cause against the neo- colonialists , our venerated politicians and their cronies ( bureaucrats and police officials)-
- Please understand that those of us , agitating in urban centers across the country, against an entire political class , constitute only 20% of the votes.
- Majority of the voting ( 80%) happens in the semi-urban and rural centers- these areas constitute the MAJOR VOTE BANKS for the politicians.
- If this revolution (pink revolution as per our intelligent, venerated President’s son, Abhijeet Mukherjee!) is to make serious inroads, gain traction , and shake up the rotten foundations of our pathetic excuse for a democracy, then the masses in the semi-urban an rural centers of India have to be roused from their deep sleep.
- It is not as difficult as you imagine- thankfully, due to the poor development of urban centers, all it takes is a drive of 2 hours away from urban centers, and voila , you are in rural India!
- Target those who have armed forces background, explain you cause in their local language, provide the context for them to comprehend issues beyond, caste , creed, and certainly beyond sex, and convert them to your cause.
- These converts, from armed forces background, are most likely to spread the REAL ISSUES of this mass initiative, and shake the foundations of our pathetic political class and their cronies!!
Give me a shout out if you need free consultation on how to drive this strategy!!
This blog is not about sales, which is my first love and my strongest suite, NOR is it about marketing, which is another of my contemporary strong suites, and an ever evolving skill set, BUT its about a far more serious subject- managing board members and their expectations ( hopefully with some level of expertise, borne out of confidence and a balanced EQ)
Think it’s “no big deal.” The CEO walks into your office and nonchalantly says, “You’ve got 20 minutes to pitch your business unit’s plan at tomorrow’s board meeting.” Your near-panic is visible, so he adds, “Don’t sweat it; it’s no big deal.” Just because he says or acts as if it’s no big deal doesn’t mean it’s no big deal. I’m sure his first time was a big deal. Prepare. Know your material cold and be ready for a healthy amount of Q&A.
My personal experience– as I have progressed , professionally over the last 18 years, leading to my role as the P&L head for a CPG business in Africa, I was actively involved in making business presentations to the board. I had the good fortune to have wonderful mentors, who provided me with their insights on how to manage C-Level executives and powerful board members. So when ever the CEO says ” its no big deal”, he actually means THATS the deal!! Saying “its no big deal” is like a mere formality, more like office speak; so keep that in mind…ALWAYS!!
Walk in with a half-baked plan. Boards are typically comprised of smart, opinionated people who are also former or current executives. If you pitch a half-baked plan, it may get twisted, debated, and mutated to the point where you end up getting a green light to do something that bears little or no resemblance to your original plan. And if it fails, it’s still your plan … and your fault.
My personal experience- I never, never , never ever under-estimated the people who sat in the board- my logic is simple; you may believe ( and rightly so) that your smarts are contemporary, and therefore you have been called to make THAT important presentation to the board, BUT you have to be mindful of the fact that stares you in your face- the board members are THERE because they have skill sets that you currently dont possess – it may be subject matter expertise ( of a level that is not yet within your grasp), business connections across the globe ( which you in all likelihood dont have ) or loads of cash ( which you most probably dont have in your meager bank account!). So in order to make a great first impression to this august assembly, ensure that you burn the midnight oil and go for the kill!
Try to out-maneuver a founder. Don’t underestimate the loyalty, power, and sway even a dysfunctional founder may still have with a board that owes its existence – and perhaps riches – to him. Even if you’re the CEO, you can do irreparable damage to your standing or even get fired – which I’ve seen happen. Exercise extreme caution.
My personal experience- In my opinion, this is like committing political and professional hara kiri…this may be a publicly traded enterprise, BUT make no mistake, the clout of the founder still resonates in the board!!
Expect the board to actually do something. Never forget that it’s the job of company executives to manage, plan, strategize, make decisions, and of course, execute. The board’s job is to provide oversight, advice, and sometimes, connections. If you need something from them, be clear and upfront about it, but don’t expect much more than feedback.
My personal experience- Its best that you know your place in the business eco-system. The board is there to listen to your business plan, to watch your performance, to put you through your paces with some tough questions, to play the devils advocate and IF they like what they hear and see, they will simply RUBBER STAMP your plan ….thats that ! YOU have to finally get the job done!!
Pitch a controversial plan without support. I watched a president get shot down by the chairman (who incidentally was right) after pitching a controversial acquisition. It was embarrassing in front of all the officers and directors, but it didn’t have to happen. They had a good relationship; the president should have sought one-on-one feedback prior to the meeting. Rally some support before the meeting for hot or controversial ideas.
My personal experience- Develop some level of political savvy ( even if you hate politics!!). Politics is a reality of all organizations, including families, homes, friend circles etc…so get over your apathy and cultivate this skill. AND know the business eco-system, know the decision makers and the key influence’s in the board. Use political savvy to cultivate “friends” and “supporters” in the team that will be with you in the board room when you make your pitch…if you can cosy up to some key board members at a personal level…great!!
I have often used this insight to train my sales reps to understand their business eco-system and to take corrective measures before its too late for them and the business as a whole.
Time to share my insights with you all.
- Changing payment patterns. If the customer asks to delay payments from 30 to 45 or 60 days, be wary.
- Shifty buying habits. Customers may be paying on time, but are they still buying?
- Constant nitpicking. Normally quiet customers suddenly come in with a flock of demands.
- Watch cash flow. If you have access to your customers financial statements, watch the cash.
- Large accruals. Distressed firms tend to have more on their balance sheets.
- Tight lips. A normally-open firm suddenly clams up.
- High Day Sales Outstanding. Watch if your customer suddenly has trouble collecting his receivables.
- Managerial shuffling. Watch out if you see C-Suite musical chairs.
- Persistent rumors. Too often they are true.
- Tax liens. If a customer starts racking up tax liens, it’s a clear sign he’s going under