Negotiation: Manageing the “Chumpion” Syndrome
Negotiation: Managing the “Chumpion” Syndrome – The vulnerability of a company to this kind of “back door selling” is typically decided by the sophistication level of its procurement function and processes.
Any policies aimed at dealing with “back door selling” must ensure they do not stifle the value created from supplier relationships. To do this procurement itself must be knowledgeable of the business goals of their organization, contribute to developing them, and be organized and skilled to effectively manage their supplier base.
Many procurement professionals will be frustratingly familiar with the feeling that the supplier knows more about their organization and its requirements than the buyer knows about the suppliers. This creates a debilitating sense of dependency and “lock in” to the supplier. This after all is the overarching objective of “back door selling”.
Procurement must ask three key questions to determine the potential for relationship based lock in:
1. Does your current supplier know your company better than its competition does?
2. Do you know your current supplier better than you know its competition?
3. Has your supplier become embedded in your processes?
Procurement must review these aspects when managing supplier relationships to determine both the appropriateness of the relationship and to ensure that the seller does not have an inappropriate advantage, beyond the power of doing great work and providing great service.
Procurement must know its own companies requirements, and the capabilities and resources of its supply base to meet those requirements at least as well if not better than its suppliers. Often they will find a disparity, and this is a clear indicator that there will be “chumpions” in the organization. Procurement must therefore be organized to provide a strategic approach to supplier relationship management and other supply management best practices.
Look for “chumpions” by making a list of those people in your organization that are involved in the purchase decision. These can be stakeholders, team members, managers, sponsors and even company executives in the C suite. Who touches and who’s impacted are the key questions sellers ask when seeking out potential “chumpions”. As for getting to the executive, the seller is likely to reason that if they don’t get there and their competition does, then they are at a severe disadvantage, so it is inevitable they will try. Procurement must therefore influence at the very top to embed its own processes and governance policies supported from the top down in their organization to render “back door selling” not only ineffective but also seen as unethical and unacceptable behaviour.
Supplier neutralized
You may also like:
‘Dealing with back door selling’ which you can read here