Culture is not a ping pong table - #1 Extend Culture down your Supply Chain

When an Operator is building a new growth consumer products business or making radical changes to an existing stagnant business, there is a proven path a company must travel.

The path starts with a handful of Operating Disciplines that every great company has mastered.

Culture is not a ping pong table

There are hundreds of articles talking about the power of Culture. Essentially all the articles come down to this: When it sucks, everything sucks. When it works, you do your best work and you wear your company’s T-shirt. True.

The thing I am most proud of in my career was the Culture we built in my last 2 companies. It was amazing. Ask anyone who worked with me. It was magic. 

First – let me describe what culture is to me. As one of the company leaders, Culture is you (so yes, I am amazing and magical...). It’s your morality, it’s your experiences, it’s your risk tolerance, it's your speed and urgency, it's how you treat your spouse and friends, it’s your sense of humor, it’s your priority system. It's organic.

Culture is not

1.      Ping pong tables

2.      Forced volunteerism

3.      Forced exercise events

4.      Forced rah rah

5.      A ‘cool’ office

I put together 11 culture topics that, together, makes an environment/culture where people did their best work. (I am going to spread these over a few articles). Now, these are my levers. If you aren’t like me, these may not work for you. And if you don’t like these, you shouldn’t work for me.

1.    Culture: I will be your best Customer Philosophy

Growing up in big companies, every single one of them beat the shit out of their vendors. Winning was a fraction of a reduction on price. The relationship was horrible. I win, you lose was a win. The customer was arrogant, the vendor was pissed. I wanted to change that. I believed that our vendors, providing product and services, needed to part of our culture. I win, you win.

I believed that if you are keeping your vendors honest by occasionally bidding out the goods and services (and we were transparent about this), expanding our culture down the supply chain created the momentum a growing business needed.

The first time we met with a new vendor we would say “I am going to be your favorite customer. You are going to love us”. They normally laughed. We said it every time we interacted. And then we acted on it.

A.     Pricing is a ticket to play. Pricing is not our relationship.

I am going to know the market rate of the vendors’ service’s by bidding the best providers and negotiating to find the bottom. I’m going to have a solid price where we both will be profitable. I am going to know your assumptions on my business parameters and how it drives your pricing. We are not going to talk pricing until the next pricing cycle. We are going to talk your business parameters and your cost drivers (typically labor and process efficiency’s) from now on. It feels nice to get pricing out of the way.

B.     Your business, like mine, must be Profitable - we will ask you quarterly.

If you are not making the profit you expected, I want to know, and I will change my behavior (systemically and processes) to make you profitable. For example, if you are my third-party warehouse and you are not making profit, I will know. I will bring down my business to allow you to re-slot (change layout) of your product. I will change how I release orders to you. I will change how we label master cartons, etc. You will fix your processes.

C.      Constant two-way Customer and Vendor Feedback

We built a robust vendor score carding system. We would rate the vendors on a myriad of important factors to our business. The score card are action based and occur at a predictable cadence. The difference was, with the score card, we made our vendors rate us. “how are we doing as your customer? What can we do better”? We would do this anonymously if our vendors didn’t feel like they could give us honest feedback (only in the beginning). And then we actioned their feedback. Vendors minds were blown. 

D.     You and your team will use our Products.

One of the cool things about a consumer product business is that we actually build something. Tangible. All workers at the factories and services got our employee pricing and the day we launched a new relationship, the employees where given our product. Surprisingly, for vendors, this rarely happened.

E.      Vendor leadership will have access to Me and highest levels of my company.

You have my cell and my email address. You have a problem with anyone on my team or how we are doing business, call me.

F.      The Daylen Bushman Factor - you will eat with my family in my house (well probably not mine).

I have worked with Daylen for years. He taught me this – he will invite key vendors to his house to meet his family and to have dinner. He is creating a career-spanning relationship by being genuinely interested in you. Friendship matters. Daylen is a master.

G.     My Brand is hot. We will Cross Brand with you. I will be you advocate to win more business.

If you want to cross brand your service with my hot brand, done. Here is the first cross brand with SAP (https://www.youtube.com/watch?v=kzW8cRjhnnQ) in the early days of Skullcandy. Also, beyond the normal reference calls, if you want to bring a potential new client to my cool offices and have me pitch for you, done. Anytime.

H.     We are Transparent to a fault with our vendors. We are driven by data. We share our forecast. We will show you all our risk and opportunities.

Its shocking how much information customers keep from their vendors. We don’t. We show all our risk and our opportunities. We show our product road map. We show how we performed in previous quarters and where we made mistakes. Transparency and data are our lifeblood.

It fascinating to start a new relationship with new vendors with the line ““I am going to be your favorite customer. You are going to love being my vendor”. You can see the skepticism on their face. Month by month, as you prove they are truly your partners and that you are serious, the change in performance is astounding. Extend your culture through your supply chain.