Companies adopting an account-based growth strategy prioritise customers representing the best opportunity for long-term growth. Meanwhile, those customers are going through a similar exercise to rank their suppliers, deciding which of them will help them build sustainable success. Ninian Wilson, Group Procurement Director and CEO of Vodafone Procurement Company, offers his thoughts on how strategic suppliers are selected, and what is expected of them.
Identifying strategic suppliers
Strategic suppliers are those with whom you are spending a lot and whose services are business critical. Tools such as a Boston Matrix are useful for reviewing suppliers, mapping annual spend versus the impact they can have on future business. It’s also interesting to map each supplier’s view of your business. If the supplier sees you as strategic, but you do not see them the same way, this needs to be worked through.
Establishing success criteria
What you want and need from your strategic suppliers may vary, but here are six key things I expect:
- A dedicated account team
- An unfair share of the R&D budget for innovation
- First access to new products and services, and first amongst equals commercially
- Connections at all levels including an executive sponsor
- Structured governance including performance reviews and a look at future opportunities
- A highly experienced, senior executive as the main point of contact
Demonstrating shared values
Aligned values are becoming more critical. Customers are more interested in how our business is run and how our position on environment, sustainability, and governance (ESG) can impact our access to capital. Supplier selection is based on weighted scores, so the weightings and scores achieved for ESG can make all the difference.
Facing into challenges
The best supplier’s account executives are open communicators and deliver excellent service, great product quality, and all at the right price. However, they inevitably face challenges: perhaps unresolved issues or a lack of commerciality or professionalism. If suppliers make a mistake, I want them to hold their hands up and learn from it.
I don’t want to see arrogance, even from a global strategic supplier.
Thinking long-term
The best strategic suppliers are those that stay the course, over the long term, even if the nature of the business changes and the level of the business fluctuates. It’s important to see these as long-term plays. When it works, you have relationships that span decades benefitting both businesses and their wider stakeholder communities.
Read Ninian Wilson’s full Viewpoint in Account-Based Growth by Bev Burgess and Tim Shercliff, published by Kogan Page
