How Companies Can Build Human-Oriented Bonds with Their Suppliers and Retailers?

Interview with Dr Bruno Roque Cignacco 

Discover how to transform your business relationships with suppliers and retailers through compassionate practices. In this interview, Dr. Bruno Roque Cignacco, author of “The Art of Compassionate Business,” reveals strategies to develop strong, trust-based bonds that drive mutual success and long-term collaboration. 

In the second edition of your book “The Art of Compassionate Business” you highlighted the importance of building strong long-lasting relationships with suppliers and retailers. How can companies develop robust bonds with these stakeholders?  

This is a very interesting point. Many business people only focus on the achievement of Key Performance Indicators (e.g., profitability, increasing market share, etc.), which is a very significant objective. However, it is important to understand that all companies are interdependent with their stakeholders (e.g., employees, customers, suppliers, etc.) In simple words, companies cannot succeed without the support of these stakeholders.

Therefore, when companies build strong relationships with these stakeholders, based on win-win agreements, these very stakeholders are prone to willingly help these companies achieve these Key Performance Indicators. Because when companies develop strong long-lasting ties with these stakeholders, it makes these stakeholders more prone to act in a cooperative manner with these companies. Companies can strengthen these bonds by regularly catering for these stakeholders’ distinctive needs.

Suppliers are significant stakeholders for most organisations; these stakeholders provide companies with valuable inputs (e.g., raw material, packaging, etc.). Retailers are also important stakeholders for many organisations, as the former sells the products or services offered by the latter to customers. These two stakeholders (suppliers and retailers) directly or indirectly add value to the products and services that companies offer to the marketplace.

All transactions with suppliers and retailers include commercial aspects (e.g., volume, quality, etc.) but also relational aspects (e.g., trust, support, kindness, etc.). These commercial and relational aspects are always interrelated. Consequently, companies should avoid prioritising the commercial aspects of their transactions over the relational ones, as it can damage the relationships with suppliers and retailers.  In other words, both commercial and relational aspects are paramount for the development of long-lasting and mutually beneficial relationships with these stakeholders.

Many companies only contact their suppliers and retailers to discuss specific business conditions of current or past transactions (e.g., orders, quality, price, etc.). This represents a very limited communication approach, which does not help companies strengthen their relationships with their suppliers and retailers significantly. In order to brighten their relationships with its suppliers and retailers. Companies should develop continuous communication with these stakeholders. Oftentimes, this implies contacting these stakeholders for no specific business reason. For example, a company can send a letter to one of its suppliers greeting them for their anniversary. These regular communication flows can bring about stronger trust-based bonds with these stakeholders. 

This is a very important piece of advice for companies. What other ways to build strong relationships with suppliers and retailers do you mention in your book? 

Thank you for this important question. There are some simple suggestions a company can regularly implement to strengthen their relationships with these stakeholders. Many organisations are overly busy, as they undertake various business projects. These projects are often run simultaneously and have tight deadlines, which prompts employees to be overburdened and continually involved in multitasking.

In these cases, some organisations adduce that they do not have time to strengthen their bonds with suppliers and retailers, as they must regularly deal with various urgent business issues. However, even in those situations, people working for an organisation should adopt a kind and supportive attitude towards suppliers and retailers. Oftentimes, the adoption of this attitude simply implies, for instance, returning missed calls to suppliers promptly, or sending the information requested by retailers in a swift manner. These small gestures of care make a big positive difference regarding the company’s relationships with these stakeholders.

A company should also adopt a compassionate attitude towards its suppliers and retailers, especially when these stakeholders have made unintentional mistakes. For example, let’s imagine that a supplier provided an organisation with inputs two days later than the promised delivery date. If this organisation does not act compassionately with this supplier, this company will aim to stick to was legally agreed in the contract with this supplier, which can imply applying a penalty for the late delivery.

In this example, the strict application of the conditions of the contract with this supplier can damage the relationship with this stakeholder. Instead, a company with a compassionate attitude is prone to have a one-to-one conversation with this supplier to know its difficulties with the late delivery and provide some assistance (e.g., setting up flexible delivery dates for future dispatches), whenever possible. When a company adopts a compassionate attitude towards suppliers and retailers, this can help strengthen the bonds with these stakeholders. 

This is very practical advice. According to your research, how can companies develop trust-based bonds with their suppliers and retailers? 

Thank you for your relevant question. There are different ways to develop more trust-based relationships with these stakeholders. I will enumerate a few simple but practical ways to strengthen the bonds with suppliers and retailers:

• Providing accurate information: A company should provide these stakeholders with precise and updated information, whenever possible, especially when this information is relevant for decision-making of these stakeholders. For example, if a company is using retailers to sell its products to customers, this organisation should always provide these retail companies with accurate information about the products offered (e.g., correct ways of storing the products, quality levels, expiry date, etc.). The regular provision of accurate information to these stakeholders helps brighten the relationships with them.
• Ensuring confidentiality: Sometimes, suppliers and retailers can provide a company with sensitive information, which is meant to be kept in a confidential manner. A company that publicises this confidential information without authorisation erodes the trust-based bonds with these stakeholders. Let’s imagine that one of the suppliers of a company is currently undertaking an important Research and Development project to develop a new type of material for the packaging. This innovative material can potentially be more enduring than the material offered by rival organisations. If this supplier confides in a company about this sensitive information and this organisation carelessly publicises this confidential information, the bonds between this company and suppliers are prone to be damaged. 
• Developing mutually beneficial agreements: A company should always aim to develop mutually beneficial agreements with its suppliers and retailers. In this type of agreements, the needs of both parties should be fully met. In other words, no party (e.g., the company) wins at the expense of the other (e.g., the supplier).  A company that negotiates new agreements with suppliers and retailers should avoid adopting a self-centred attitude. This company should not focus only on what can be obtained from these stakeholders. Instead, the negotiation of these agreements should always consider the interests of both parties. In these negotiation processes, people working for a company should ask themselves: “How can we develop an agreement where the needs of both parties are fully satisfied?” 
• Adopting an honest attitude: A company negotiating agreements with its suppliers or retailers should avoid utilising manipulative ploys (exaggerated demands, bluffing, threats, etc.). The use of these stratagems often damages the relationship with the other party. The utilisation of these coercive techniques often prompts the other party to agree to conditions unsuitable for its specific needs. A company that adopts an honest attitude towards its suppliers and retailers aim to develop agreements with them which are based on noble values (e.g., fairness, transparency, integrity, mutual support, etc.).  
• Personalising agreements with stakeholders: Many companies use standardised templates to develop legal agreements with their suppliers and stakeholders. When a company adopts this approach, this organisation is less prone to consider the distinctive needs of each supplier or retailer.  Whenever a company uses standardised agreements, this organisation is unlikely to meet the unique interests of these stakeholders. On the contrary, when a company uses personalised contracts, this organisation tends to duly consider the specific needs of the other party. As a consequence, the development of personalised agreements often brightens the bonds with these stakeholders. 
• Adopting a co-operative approach: A company should aim to support its suppliers and retailers on a regular basis. The adoption of co-operative attitude with these stakeholders contributes to development of strong relationships with them. For example, a company can provide retailers with free samples of the products offered by this organisation. These free samples can be given even when there is no legal obligation to act in this way. A company with a collaborative attitude can also provide these retailers with regular valuable information (e.g., latest market trends, launch of new products, etc.) which can help enhance the performance of these stakeholders.  
• Being kind to stakeholders: Whenever possible, a company should adopt a kind attitude towards its suppliers and retailers. For instance, an organisation can show its appreciation to its suppliers for the high quality of the inputs they have provided. This company can also thank retailers for regularly and overtly showing the company’s products at their premises. A company that treats its suppliers and retailers kindly strengthens the relationships with these stakeholders over time.  
• Solving conflicts amicably: A company should always adopt a supportive attitude towards its suppliers and retailers, even during conflictive situations. The organisation should solve any conflictive issue with these stakeholders in a friendly way, in order to avoid damaging its relationships with them. In disagreements with these stakeholders, people working for the company should act in a calm and co-operative manner. In these situations, the use of friendly ways of solving conflicts (e.g., mediation) should be preferred over the use of adversarial ways (e.g., lawsuits). The use of unfriendly ways of solving conflicts often exacerbates the disagreements between the parties and can even escalate the conflict. 

Thank you for your meaningful suggestions. Lastly, what final advice can you provide to develop more robust relationships with retailers and suppliers, based on your new book? 

Thank you very much for this last question. People working for a company should regularly ask themselves the following questions: 

• How can we adopt a kinder and more co-operative attitude towards suppliers and retailers? 
• How can we develop more supportive relationships with these stakeholders? 
• How can we regularly provide suppliers and retailers with valuable information? 
• How can we develop more personalised agreements which duly consider the specific interests of each party? 
• How can we solve conflictive issues with suppliers and retailers in a friendly manner? 

Executive Profile

Dr Bruno Roque Cignacco (PhD) is an international business consultant, TEDx speaker, and researcher. For over 30 years, he has advised and trained hundreds of companies on international trade activities and international marketing. He also trains companies on topics related to compassionate business and human-oriented leadership. He is a university professor and a senior fellow of the Higher Education Academy (HEA), in the UK. He is also the author of business and personal-development books published in various languages. The second edition of his new book The Art of Compassionate Business is available at  www.routledge.com/9781032445427. His website is www.brunocignacco.com.