Relationships

Although innovation may seem to be a somewhat solitary undertaking, it is more likely to be a team sport. What’s more, all of those famous “two guys in a garage” notwithstanding, innovation, and more certainly, the subsequent acts of product development, usually involves an array of other individuals. While the initial spark may be, and probably is, struck by a single person, the subsequent activities aren’t performed alone. To paraphrase another line: It takes a supply chain.

One part of that chain is internal to the organization, the people with whom one directly and indirectly works. After all, this is why business organizations exist: to do the things that individuals can’t do themselves. The larger part of the chain is outside the walls of one’s employer: the bona-fide suppliers.

Picture someone who is a petty tyrant, a real S.O.B. This person demands, doesn’t ask. Barks, doesn’t talk. The closest he gets to a smile is something more accurately described as a “scowl” or a “sneer.” How well is this person going to get along with his coworkers, both internal and external? How much cooperation and trust are going to be created? How willing are other people going to be to share something with him that would provide a benefit or other advantage?

Clearly, it is important to get along with others. This, it should be noted, is not to say that sometimes the others aren’t in need of a bit of persuasion  that goes well beyond the “Aw, c’mon.” Sometimes it takes a bit of stern persuasion. But beatings and beratings don’t necessarily work too well—if at all.

John Henke, Jr., is the president and CEO of Planning Perspectives, which conducts annual studies of OEM-supplier relations.  Henke’s firm performs analyses within industries including computers, electronics, pet food, baby food, aircraft engines, airframe manufacturers, and automotive. About the last he says, “We have been tracking supplier relations since 1992, during which time Toyota has been clearly the industry leader in supplier relations.” In fact, for a while, Toyota was better than any company in any industry surveyed.

Recently, Henke and his team completed a survey of how suppliers to the auto industry assess their relationships with the car companies they sell to and, ideally, work with. So for the 2009 OEM-Supplier Working Relation Index, based on 17 variables, and with a numeric score up to 500, the results are: Honda (349), Toyota (339), Nissan (268),  Ford (232), GM (183), Chrysler (162). Consider the top and bottom two. Honda and Toyota are regular top performers in J.D. Power surveys and the like for the quality, reliability and durability of their products, and they are rewarded in the market.  They are also leaders in innovation, such as hybrid technology. Realize that their products are mainly based on parts and components from suppliers. GM and Chrysler both filed for bankruptcy. For years, their products have tended to be also-rans to the top two (with few exceptions).

Henke stresses that the big difference is in the relationships and the behaviors between the parties—regardless of the industry. Which seems to say that if you want to be innovative (to say nothing of being out of the bankruptcy court) focusing on relationships is essential.