In the business world, trust can often feel intangible and hard to define. Even so, that instinctive sense of trust – or distrust – can still exert a huge influence on corporate decision-making, especially when it comes to determining which firms to partner with and which to keep at a distance.
In turbulent times, we naturally gravitate towards those we deem most trustworthy. Given the sheer scale of disruption that global supply chains have endured since early 2020, it’s understandable that trust has become a high priority in supplier relationships.
A survey of supply chain executives by Deloitte in late 2022 found that 44% were anticipating another big shock to the system within two years. With this risk in mind, 61% of respondents said that their firms had made improving trust levels among their key stakeholders a priority.
If mutual trust is indeed an effective factor in managing the risk of disruption, how can businesses and their suppliers go about building stronger, healthier relationships?
Be open from the outset
No matter how you define trust, it is something that can be actively cultivated in business-to-business relationships. So says Jess Baker, a chartered business psychologist and leadership coach.
She explains that transparency is a key ingredient that goes into building trust. When establishing a relationship with a potential new partner, an honest conversation about your respective businesses’ core identities, priorities and communication preferences is vital if you’re to form a clear understanding of each other.
“I encourage clients to ensure that any supplier is a ‘values match’. If your business aligns strongly with a certain value, such as sustainability or collaboration, then ascertain that any new supplier is agreeable to this,” Baker advises. “In contrast, if your firm is purely target-driven, you can say: ‘We’re not expecting to have a personal relationship. We just want you to deliver on time all the time.’ That creates a different type of contract, but it’s no less transparent and authentic.”
Share the appropriate information, not all of it
Baker is quick to stress that being transparent is not the same as being reckless with information.
“Building trust and providing transparency does not necessarily mean revealing everything,” she says. “It can be about agreeing in advance what you will divulge, and what you will talk about, when in a contract.”
Kaye Sotomi is the co-founder and director of Chop Chop London, a chain of gender-neutral hair salons with branches across the capital. He agrees that spilling all the details about your company’s inner workings unnecessary in a healthy supplier relationship. That said, he encourages sharing some of your company’s aspirations and plans in order to strengthen ties with its partners and motivate them.
“Help your suppliers to see where you’re trying to go,” Sotomi suggests. “If your goal is to open 50 stores in 10 years, for instance, tell them. With that information, a supplier knows that it could eventually be servicing all 50, growing with your business as it scales up.”
Make trust management a C-suite position
The concept of using trust as a bulwark against instability and business disruption is increasingly being reflected in the world of senior recruitment: chief trust officers are emerging in corporate boardrooms.
A small but not insignificant proportion (6.1%) of organisations have appointed a chief trust officer or are planning to do so before next year, according to research by Deloitte.
Carry on refreshing the value exchange
Building trust via clear contracts, flexible payment terms and strong communication should be straightforward when there’s no precedent. For existing business-supplier relationships, a string of price increases or an unexpected change in trading terms after many years of collaboration can quickly sour relations and/or weaken trust.
Jim Rowan is managing director of Dunns Food and Drinks, a 148-year-old wholesaler to firms operating throughout Scotland’s hospitality industry. He says that, with inflation running at about 18% in his sector, maintaining trust with long-standing customers and suppliers has become a high priority.
This challenge has been made even tougher by the fact that, when you’re dealing with conglomerates and household-name suppliers, “there is often no negotiation” when price increases are afoot, Rowan reports.
But smaller suppliers can be collaborated with in other ways, as he explains: “You could give a supplier more space in your marketing material. Or you might offer them more time with your salespeople. You can take them out to see customers too. This offers them valuable opportunities for relationship-building and market research.”
If a supplier can’t move on price, it is still possible to safeguard trust. Sotomi advises asking the supplier to provide value in other ways.
“If your tech provider is charging more, say, can it improve your booking system, processes or devices? Can it talk to your team about AI and its benefits to the business? Does it have data available that will help to improve your offering? These are all ways for your business to make incremental gains and for the supplier to retain your custom.”
Set the right tone internally first
Baker’s advice for any firm seeking to build a more trusting relationship with its suppliers would be to start from within. This involves addressing some key questions.
“How are you managing your own time and relationships? And how can you improve the quality of those within your team?” she says. “From there, you can look at how that translates into the functions within departments and then externally towards the supply chain.”
Sotomi adds that it’s all about setting a direction of travel. He stresses that positive action taken now will lead the way to more transparent and efficient supply chains in the future.
“The way in which successful businesses approach relationships with their suppliers is changing,” Sotomi says. “We are shifting from a transactional approach towards more strategic partnerships.”
Baker agrees. “The shift I sense is that we all want to work in collaboration. We know we can achieve better results for both ourselves and the end customer if we do that.”
In the business world, trust can often feel intangible and hard to define. Even so, that instinctive sense of trust – or distrust – can still exert a huge influence on corporate decision-making, especially when it comes to determining which firms to partner with and which to keep at a distance.
In turbulent times, we naturally gravitate towards those we deem most trustworthy. Given the sheer scale of disruption that global supply chains have endured since early 2020, it’s understandable that trust has become a high priority in supplier relationships.
A survey of supply chain executives by Deloitte in late 2022 found that 44% were anticipating another big shock to the system within two years. With this risk in mind, 61% of respondents said that their firms had made improving trust levels among their key stakeholders a priority.
