12/30/2019 | 4 MINUTE READ

Wake-Up Calls Become Catalyst for Improvement

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We were a much stronger and sustainable company after this wake-up call.

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In this day and age of mobile phones that double as a huge number of other useful gadgets, it’s curious that most hotels still offer wake-up call services.

As much as I despise the wake-up call and the startling commencement to the day they offer I still use them often. They provide the perfect insurance policy should I incorrectly set the alarm on my phone or forget to turn on the buzzer.

Hotel room alarms are not the only kinds of wake-up calls. Running a process manufacturing company a couple of decades ago I was called into a meeting with our largest customer. This client, that accounted for almost three quarters of our annual revenue, had some bad news to share. They had decided to move a significant amount of their manufacturing operations outside our region—most of it outside the country—which would take the need for our services along with it.

During the ensuing 18 months, they moved away more than half of the work they had previously outsourced to our company. Now that was a wake-up call.

Another one came when we received a call from the purchasing manager of a major OEM. We had been working with his team for over a year to win a huge contract manufacturing project, one that would mean 20% growth for our business. We had invested tremendous resources in pursuing the project; traveling to their facility month after month, upgrading our processes to accommodate the work, devising a capacity plan that demonstrated that we could handle the increased volume, and enduring quality audits and financial reviews. Then came the call: “We’re sorry to inform you that our company has put a focus on working with Disadvantaged Business Enterprises. That means another bidder who meets that criteria can be up to 5% higher in price but we still have to award the work to them. Can you say wake-up call?

On another occasion I came to the realization that the operations team of a new customer was literally sabotaging our work out of resentment that their purchasing department had moved the contract from their previous supplier. They were losing paperwork, mixing parts on the receiving dock and even damaging our products after they were delivered. Mind you, I’m a strong non-believer in conspiracies so I fought the theories of our own team members who insisted this preposterous activity was taking place. Only after seeing it for myself, personally auditing an order as it left our dock and then, unbeknownst to the perpetrators, doing the same a couple days after it arrived at the customer, did I have to acknowledge that we were indeed being sabotaged. Wake-up call!

Then there was this. Several years back, while sitting in a meeting and scrolling through Twitter, I came across a post from a company we considered a competitor. The photo stopped me dead in my tracks. There for the world to see was the competitor’s president and business development team, huge smiles on their faces, standing with the executive team of one of our top five customers. In 144 characters or less, the Twitter poster announced in all her glory the major relationship their team had just forged with our customer. The exodus of almost all of this company’s work followed shortly thereafter. How is that for a blaring phone blasting off next to your head at 4 a.m.?

Were these wake-up calls bad news? Of course they were. But bad news can also be a wake-up call.

In the case of the 75% of customers whose work moved offshore, their announcement was the catalyst for our company to launch our acquisition strategy and build out our business development efforts. Three years later, we had become bigger than we were before the large customer’s work departed, and we had no customer that accounted for more that 25% of our business. We were a much stronger and sustainable company after this wake-up call.

The Disadvantaged Business Enterprise instance put us on notice that large companies were changing their purchasing criteria. We stepped up our messaging about our environmental compliance and philanthropy to adjust and other customers became interested. 

The sabotage episode was a reminder that we can elate the procurement department, but if the operations team of the customer isn’t on our side, we should run for the hills rather than having them be forced to work with us.

The Great Twitter Debacle was the result of our company not having a close enough relationship with the customer’s true decision makers, so we worked harder to build such relationships. Oh, and as it turned out the Twitter poster’s company screwed up the transition of the contract so badly that we had the work back six months later. Winner!

 

About the Author

Matt Kirchner

Matt Kirchner is managing director of Profit360, LLC, a Wisconsin-based strategic advisor to U.S. manufacturers and is CEO of American Finishing Resources, LLC. 

 

 


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