From payment terms to flexible leave, many companies create policies and procedures designed to protect their employees, their vendors, and the bottom line. Most times, these policies are sound and sensible. But other times, they create major roadblocks to building cooperative partnerships, fostering healthy work environments and getting things done quickly.
When you put a policy in place that serves one objective without considering the broader impact, you suffer from axis displacement disorder: That's when you believe the axis of the earth has shifted and now the world revolves around you. When a company's policies hurt business in unintended ways, it's time to re-evaluate those policies. Here are 3 ways to make sure your company is the kind of company employees and vendors seek as partners.
1. Getting Paid Should Be Easy
Accounting departments look for ways to positively impact the bottom line of the organization. But, if the policies are too Draconian, then you can force unintended consequences.
Recently, I received a contract with a company that was bringing me in to facilitate a meeting with dozens of its top-level executives. The payment terms spelled out in the company's contract were -- to put it mildly -- less than ideal. The company has a practice of paying its vendors 90 days after services have been rendered. However, I'm not in the business of financing their operations. As I was about to walk away from the engagement, one of their executives intervened and figured out a way to pay in advance.
However, the finance department is not aware of how often they lose their preferred vendor, or how much time other executives have to spend to resolve issues with their vendors. As unemployment falls and more companies have their pick of jobs, they are less likely to do business with companies who don't pay them fairly.
Similarly, if your employees have to jump through hoops to get reimbursed for expenses or to take advantage of a benefit or perk, then you are costing the organization goodwill that could lead to an unexpected departure. When someone shows how much money you might capture in interest, ask how much that might cost you in other areas.
As you review your company's policies, ask yourself: do your policies and practices attract or repel the most desirable vendors and employees? If they turn folks away, it's time to update your terms.
2. Avoid Adversarial Structures
There are two approaches to a negotiation: You can either start with a reasonable position and stand firm, or start with an extreme position and hope that you compromise near the middle (or on your side of the middle). This second approach is quite adversarial.
If you simply focus on the immediate, you might get better terms with an adversarial stance. However, when you create an adversarial setting, the other party might feel like they need to get even. No one wants to do business with a company mired in bureaucracy. Why start with an unreasonable position?
Unless you want the reputation of a government entity, you shouldn't have a complicated or harsh system for doing business. If your approach is challenging, then when vendors and employees have a choice, they might just avoid your company altogether. You'll be left with the people who don't have a choice. And they don't have a choice for a reason.
Word travels fast in certain circles, and if you're part of a tight-knit industry where your reputation matters, establishing efficient systems of working with vendors and employees will go a long way in creating goodwill.
3. Create Policies That Value Employees
Vendors aren't the only ones who contribute to a company's success. Employees are the engine that keep businesses moving. When employees feel valued and cared for, companies thrive.
Creating policies that value employees is not only the right thing to do, it's also good for business. Does your company offer flexible leave benefits, for instance, that allow workers to care for sick children, a spouse or aging parents? In my prior business, we had amazing retention. Our employees were not necessarily paid above market, but they were empowered, felt valued, and had the autonomy to grow personally and professionally. Does your company foster a creative work environment and promote problem solving? It might help you stand out from the competition.
In a thriving economy with record-low unemployment, smart companies will do what they can to attract and keep top talent -- not only among their workforce but also among their business partners. Creating unnecessary obstacles that get in the way of doing business actually hurts, not helps, the bottom line.