EOW Reflections 10/11/2023

Maybe I’m just going through a ‘blue’ phase, but it seems to me behaviour is deteriorating. I wrote last week about my team being shouted at for their inability to help people where there are no rules in place governing the issues they’re grappling with. This week it’s some of the bigger firms that are causing me angst.

Why does any big company think that it’s OK to ask their suppliers to take a reduction in income, while continuing to supply the same quality goods, in an environment where all costs have increased? Why is it OK for a big firm to hold their profits at the same level as last year, so that they can win new contracts while expecting the smaller suppliers to bankroll that? What kind of a world have we created where it’s considered acceptable for a big firm to use its smaller suppliers as banks?

I do get that you have to keep your shareholders and customers happy and that you do need to be competitive to get new contracts and that way everyone will have future work. I do understand. But squeezing the small firms eventually doesn’t pay the dividends because they can’t make any money, they’re operating at a loss, and then they go under. Where do you get your quality supplies from then? Would those same big firms tell their employees to take a 10% pay cut as of December and would the Board allow them to do so?

Why does any bigger company think that it’s OK to hold onto my money, without notification and explanation, for as long as it likes, before it eventually hands it over? Would you tell your employees on Monday that you were holding onto their November salaries until the beginning of January 2024? What would happen if you did?

Why does a bigger company think it’s OK to change the terms of doing business with me without any consultation or notice? Would you tell your employees that they would no longer be entitled to their paid leave beyond the statutory minimum for tomorrow?

Some behaviour towards smaller business seems to be deteriorating. Payment terms are being extended on a take it or leave it basis. Clauses allowing for changes to terms of doing business are being abused. Some firms are looking for ways to make more money or preserve their own financial positions at the expense of the suppliers who should be their partners. It’s next to impossible to find anyone to talk to about these issues at some firms according to small traders. And there are then the ripple effects where because it’s being done to you, you have no choice but to do it to your own suppliers.

Where does this race to the bottom end? As one contractor in the construction sector said to me this morning: “When investment is made off short term decisions that ignore the damage caused to the eco-system we are scuppered.” Frankly ‘scuppered’ is a much more polite word than the one I was thinking of, but Dominic Cummings seems to have made that one his own, so scuppered it is.

If we don’t accept the need to work together to get through the tough times there won’t be the skilled and experienced people working in smaller firms to produce the quality goods, products and services the bigger firms have been used to procuring, when times get better and orders start coming in.

We’re in an era where it’s harder to find skilled people and keep them, and older people shut up shop rather than accept bad behaviour from customers. Boards and investors need to get their heads around that and ask their executive teams to wise up, nurture suppliers and the eco-system, and treat everyone in the supply chain with respect and as if they were part of the internal team. If everyone gets a fair bite of the cherry, we can all get through the next year in much better shape.