Customer Archives - Page 2 of 4 - understand-culture

Balance customer and supplier

Augenhöhe. Literally eye-level. To be at eye-level with each other. Germans reject any form, even the slightest indication, of a one-sided customer-supplier relationship. One-sided in the sense of imbalance, a working relationship in which the one is master, the other slave.

For Germans, implicit in any business relationship is a transaction, an exchange, a trade. A problem is solved. A need is satisfied. A lack of expertise in a particular area, on a specific question, is provided from the outside. Manufacturing needs better technology. The company needs advice concerning tax law. Another company needs help with marketing, logistics, personnel, product packaging, research and development.

The list of possible business transactions is infinite. People, teams, companies collaborate, work together, because one has something the other needs, and will exchange it for something of value.

Germans are very sensitive to maintaining balance in any form of collaboration. The German customer wants in a supplier, service provider or consultant: someone who insists on working with them at eye-level, who is self-confident, knows her own worth, and rejects any working relationship which can lead to an imbalance.

The German customers want the best possible work results, input, support from suppliers, service providers, and consultants. They do not want those who react immediately to each and every desire, idea, or spontaneous thought they might have, as if the client had issued a purchase order.

Often the customer is not in a position to recognize what is best for them. And every customer is, in turn, a supplier, service provider or consultant to another company in another business relationship. That’s what business means. Today customer, tomorrow supplier.

The Germans would far more prefer to consult than to serve. Consulting is knowledge- / expertise-based. To give advice. Two parties standing at eye-level to each other. Balance. Listen, discuss, decide, act. The one side pays for it. Of course. But for the Germans, the customer is never king. And the supplier, service provider, consultant is never slave.

Masters of their work

Germans – both management and employees – strive to work independently, on their own, with as little supervision as possible. Most importantly, Germans expect of themselves and each other a high degree of mitdenken, of thinking with.

Mitdenken not only reduces the need for management oversight – it also means that management need not get too involved in the details of the work on the tactical level, the how. But can German management fully rely on their employees to do their work in the best interest of the company? Germans answer this questions indirectly with a yes.

Whenever cases are uncovered where Germans employers use technology to monitor their employees’ behaviour and/or performance, there is immediate and loud protest not only from those employees, but from the German public in general.

For Germans, to self-manage, to work independently, means a high level of trust between employer and employee, between team lead and team. For Germans, the permission to work in an independent fashion is a sign of recognition, of ability and trustworthiness.

For German employees, it is a clear sign of recognition when they are given a task to complete on their own. They are proud to take on the task, proud of their ability, regardless of whether management voices praise or offers any kind of monetary benefit.

Through the ability to work independently, to need little management supervision, German employees see themselves less as Diener, those who serve, and more as Berater, as collaborating almost as partners with their manager.

Mandate

Mandate. Latin mandatum, task, job, order to do something for another; to represent another legally; an elected office to represent the voters.

A mandate is a broadly defined task where the service provider – consultant, attorney, architect, subject area expert – advises the client. The business relationship is not made up of small, individual tasks.

Instead, the service provider – the person who has been granted the mandate – serves, represents, and advises the client in a complex area involving many different kinds of issues and interactions.

Attorneys represent their clients in legal matters. Political office holders represent their voters. A mandate obligates the adviser to act in the interest of the client even without the client‘s expressed permission.

Germans consult. Americans serve.

A big source of misunderstanding between Americans and Germans, rarely made explicit, is about whether business should inherently be customer-centric, supplier-centric, or somehow balanced, as our fourth column in this series explains.

Germans and Americans alike will of course say they care about their customers. But they associated different meanings with that notion. And that often leads to misunderstandings and frustration. American providers of business services proudly offer exactly that: a service. By contrast, German providers view their proposition less as a service and more as a consultation. The difference is subtle, but consequential.

Public Apologies

In America, celebrities are often considered suppliers, and their fans customers. Anytime celebrities make mistakes or behave in ways which don’t meet their fans’ expectations, they are expected to immediately issue formal apologies. Some of the more recent examples include:

Lance Armstrong – issued a public apology after admitting to using drugs to win the Tour de France seven times. Justin Bieber – issued a public apology after a video surfaced, in which the pop star told a racist joke. Reese Witherspoon – issued a public apology after being arrested for disorderly conduct.

More than just business

A mandate is a serious matter in Germany. The client needs to think through and research carefully, which service providers are not only capable, but more importantly trustworthy.

Even though German law strictly defines the relationship between for example an attorney or tax advisor and the client, the German client seeks a kind of special relationship over the long term, similar to one between a physician and a patient. For the German client its a matter of discretion.

And even when the advisor has significant decision making latitude, there is nonetheless constant dialogue and collaboration between the two parties. This is more than a typical business relationship. It is both business and personal. It is about representing the interests of the client in complex matters.

Both parties need to respect each other at a deeper level. They must be convinced that they can work together. Any kind of misunderstanding can lead to a difference of opinions, which potentially can allow mistrust to seep into the working relationship.

A political mandate is different. Although the office holder focuses on serving the interests of the voters, there is no personal relationship between them. The voters have to demand transparency in order to fully trust their elected office holder.

And because office holders have to represent the interests of many kinds of voters, there is a certain natural level of mistrust over and against her or him. If voters are dissatisfied, or have lost trust in the office holder, the political system enables them to end the relationship.

Taking on a mandate is a complex and delicate matter in Germany. In business as well as in politics.

Supplier as Partner

Customer-supplier relationships make up the web of today‘s modern economy. Globalization is demanding more and more specilization. No company can succeed without trusting relationships with suppliers.

Nonetheless, it is the suppliers who first feel the pain when the economy weakens. German companies, however, do their best to maintain their viability, their strength. They want their suppliers to succeed along with them. Suppliers are viewed as partners in innovation.

Germany‘s largest global companies stress, therefore, time and again the importance of maintaining partnerships with their suppliers, how they together strive to establish ever higher standards of quality.

One of the largest German manufacturers of medical technology stated recently that a supplier‘s size in terms of revenue is far less important than its technical ability and willingness to work together over a long period of time. They see themselves as partners in product development.

Another German supplier operating worldwide has developed into a major customer in its own right, setting up a complex international network of suppliers, integrating its research and development area with a few selected suppliers. Its motto is: Des einen Lücke, ist des anderen Expertise, loosely translated as: The gap in the one company, is the expertise of the other.

Customer is not King

In Germany, at the beginning of the business relationship the responsibility for how the work is done – methods and approaches – is transferred from the customer to the supplier. For the customer has contracted the expert to solve a problem, to complete a task, to manage a project. It is expected that the expert do so with limited involvement of the customer. For the two parties have already discussed and agreed on the details of how the work will be done.

The German client, therefore, wants to know upfront the methods and approaches used by the supplier. At the same time, the customer respects how the supplier works, including adapting customer requirements to supplier methods and approaches. In the end the supplier has the say about her own processes, which produce the results desired by the customer.

Every product and service is a clear indication of how a company works, their methods and approaches. And German customers are deeply interested in how the work is done. They want to understand how the supplier works. They want to be convinced by the supplier‘s expertise. The German customer also knows that the success of the business relationship will depend on close collaboration, on the coordination of work processes from both sides.

Whenever a company as the customer contracts an external supplier, they are implicitly admitting to a gap in their own expertise, implicitly stating that the area of expertise of the supplier is not a part of the their own core expertise. Companies small and large, regional and international, are constantly defining what their core expertise is, what business they are in. Defining that means defining what external suppliers they need to draw on.

This is one reason why for Germans the customer is not king, but instead a partner. German suppliers expect, and in many cases demand, that the customer accept them as partners, accept a partnership of equals, auf Augenhöhe, literally at eye‘s level.

Germans see a customer-supplier relationship as complementary, with each side having its respective strengths and weaknesses, its core and non-core areas. To do business together means to help fill each other‘s gaps in expertise, to complement each other, to serve each other.

On the same page

The first step an American supplier will take is to gain a deep understanding of the customer‘s needs. Because these aren’t always so concrete, they must also try to identify the perceived needs. The relationship with the customer should be highly collaborative on all levels, from the beginning to the end.

The American supplier, vendor, consultant, constantly strives to make sure that they are “on the same page” with the client. In fact, they work literally side-by-side with the client, going to the client’s place of work and completely adjusting their schedule. They maintain continuous dialogue throughout the process so that they always understand the client’s needs and desires, especially as they change.

This includes knowledge-transfer agreements, which detail when the customer will be able to do something on his own, without supplier assistance, so that he begins to take over the process.

Results: Because the customer exerts such a certain level of control over the external expert (the how as well as the what), the expert is held accountable exclusively for the work dictated (ordered) by the customer. How the results might affect related areas within the client company remains the responsibility of the customer. Responsibility cannot exceed scope of work.

Information: For this collaborative effort to function effectively a high level of communication between customer and supplier is necessary. Information flow is guaranteed via short-term feedback between the customer and the supplier during the entire business relationship. This allow customers to modify their requests depending on changing situations.

Fine Line

To serve the customer is to deliver what the customer has ordered. No more, no less. Quickly. Precisely. Fulfilling the order. Full. Filled. Unless asked, a waiter does not discuss with the customers the wisdom of their choice from the menu.

To consult the customer is to enter into the decision making process, to co-discuss, to co-think. To discuss with, think with. Perhaps initially just as a sounding board. Then later as a provider of information, input, advice. At the highest level, acting independently, but in the spirit of the customer’s wishes.

Stages. From order-taker all the way to co-thinker and co-decider. Grades. Gradations. Graduation. Gradual. From serving to partnering with. And there is a fine line between each phase, at each transition.

If the lines are identified, understood and managed (walked carefully), the collaborator is graduated, “makes the grade.” If misidentified, misunderstood, therefore mismanaged, the collaborator is not graduated. The business relationship might be terminated.