Saving money and a “collegiate” approach don’t go together – will it work for Telkom’s CPO?

Ian Russell, CPO at South African telecoms firm Telkom was quoted recently on the Supply Management website here. (I remember him as a very smart young manager at Barclays some years ago, and it was clear even then he would go on to CPO level roles).  Anyway, the headline of the Supply Management article is this.

Telkom takes 'collegiate' approach with top suppliers to save 'as much as possible'

This is apparently what Russell told the esteemed periodical. So let’s deconstruct that for a moment. “Collegiate” strictly means belonging or relating to a college or its students. But we tend to use it more generally in business terms to mean togetherness, closeness, collaboration, friendship and shared purpose. But what does “saving as much as possible” say?

To a supplier, I can guarantee it means revenue reduction, margin cuts, tough negotiation, competition, I win you lose. So “collegiate” and “savings” just don’t go together, at least not in an obvious, headline manner. It’s a bit like this scenario.

“I want to be your friend”.

“That’s nice. Is that because of my charm , sense of humour and because we both support West Ham”?

“No, I just want you to give me some of your money to buy beer”.

Now reading on in the article, Russell says this:

“A technology company desperately needs the oxygen that comes from research and development and collaborative working with suppliers. Because of Telkom’s previous approach it probably hasn’t accessed that. I’m talking about developing longer term, more structured relationships with the big suppliers so we get quicker access to the right innovation and some of the lower cost ways of doing business.”

Now that’s really, really good stuff. Spot on. But if Russell’s starting point for these discussions is about cost savings, then the supplier will immediately be on the defensive. He’s after our margin, they will think. By the time the discussion turns to innovation, it is too late.

So let’s be presumptuous enough to offer a suggestion. Don’t talk about savings at all. Ban that word from the discussions. Talk about value, in all its forms. And yes, that includes “Do we schedule and plan well? Are we specifying well? Do we have too many competing technologies in our environment”?

They are all good value-related questions. And of course the value generated may turn out in part to come from cost savings. Just don’t go straight in using that “savings” word, at least not as your headline. And let’s hope for Russell’s sake that Telkom’s suppliers don’t read Supply Management.

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First Voice

  1. Bitter and twisted:

    What use is the phrase “cost ” at all?

    I contend it can always be substituted by one of 3 more accurate terms

    1. “Value”

    2. “Waste”

    3. “Expenditure”

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