Getting it right in international B2B relationships

When in Rome, do as the Romans: simple enough a motto when travelling, but what about business relationships which cross borders? How can cooperation between supplier and client run smoothly when one works with one set of standards, and the other with a different set?

Reporting is essential and should be carried out with surgical precision and military rigor. Distance between a client and his supplier creates two problems within the B2B relationship: loss of information and a feeling of lack of control. Within B2B relationships where client and supplier are in the same geographic area, more information travels to and from than what is actually said, as both parties in the relationship draw information from the same environment. They can therefore be on the same page, even if one party forgets to mention certain information to the other. Carefully designed and rigorous reporting is therefore essential, because it is the only channel for information exchange.

And while all important information may effectively be communicated to and from the client, he may still have a feeling of loose control over his supplier, or vice-versa. Bubbles will form in the information flow, with likely appearance of grievances ping-ponged between client and supplier. DashThis, a sales-specialized blog, recommends (1): “reports are also a great opportunity for you to educate your client on your work. Many clients don’t necessarily know the difference between one KPI or another – and most importantly, why each KPI should matter to them.”

Regular reporting ensures the client knows what has been done on your side, and what hasn’t. When only one environment is shared, the information which is sent will be confirmed when the sender will witness the consequences of that information in the environment, giving the sender a sense of control. However, in two different environments, the message is sent and … nothing. Nothing but the hope that things are moving on the other side. Reporting regularly and thoroughly will fix that nicely.

Attention should also be paid to certifications and standards, and they are not necessarily equivalent in the client’s country. Some of these complications are being slowly absorbed by the growth of international norms, such as European ones. The European Committee for Standardization states: ”All CEN members are obliged to implement ENs as national standards without any modification and to withdraw any conflicting national standards.” (2) However, many countries are left out of the “standardization of standards” process, which opens the door to confusion and production mishaps. Metric and imperial systems are the easiest norm gaps to fill, but things can get very dicey when dealing with more technical standards, such as aviation.

On July 31st, Russia and China announced a strategic aviation partnership, as Paul Sillers covered (3), namely a ”major strategic co-operation program against the background of further developing the comprehensive strategic partnership between China and Russia”. Despite assuring that “it’s on a quest to procure international partners to ensure that what is brought to market is compliant with global industry norms”, what is at stake is control of the global market: Russians and Chinese wish to impose their norms, and ensure American ones are contained. Clients and suppliers will get caught in the middle of the struggle. Should standards be different, they should be explained to the client, so that he doesn’t get a “no-man’s land” impression of confusion. The odds are, if your standards are not exactly the same, they are relatively comparable. A simple list of the main differences will give the client a feeling of control and comprehension which will reinforce the relationship. A more comprehensive description of norms is needed if your company has its own (example below).

The temptation of “closing the kitchen door” can be great. In other words, using the distance to keep the client off your back. But in many cases, the client will get the feeling of being shut out, and the feeling will be amplified by the distance. Oberthur Fiduciaire, the French banknote printer, recently decided to include one of its clients into its highly-sensitive production process, as it opened a joint venture with the Bulgarian central bank – where the company applies its own set of high quality and security standards. The Sofia Globe reported (4): “The Bulgarian National Bank (BNB) has put in an order for 60 million new banknotes with the Bulgarian subsidiary of French secure printing firm Oberthur Fiduciaire, according to paperwork filed by the central bank with Bulgaria’s public procurement agency.” The business of printing currency is so critical for a government, that Oberthur Fiduciaire chose to open its production system, so as to reinforce trust with its client and push the deal through, something it wouldn’t normally do. The risk, when being too secretive about technological know-how, is to inadvertently make the client feel that he has lost control of the process, which could prove devastating to the relationship. By filling the trust gap, Oberthur Fiduciaire has secured a strong foothold in the growing banknote market of central Europe.

The main challenge in an international B2B is to level the field: re-creating what the international nature of the relationship had initially prevented. When dealing with a foreign supplier, a customer will have very little visibility on what his supplier is doing, which can produce tensions. Though full disclosure, transparency and even sometimes, when possible, including the client in the production process.






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