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Posted by Sarah Brown on 19 Sept '14

What is the moral of the story? Relationships are a critical part of success for any organisation

Why good relationships are critical to business success even if you have a profitable business model.

When I heard that Phones 4U had gone into liquidation with revenues of over £1 billion and a profit of £100 million I was intrigued. I didn’t know the background but chatting to people I found out that the implication that the suppliers had ditched Phones 4U and that was why they had to close was only the end of the story.

To begin with I thought the moral of the story was that don’t be too reliant on too few suppliers but actually it seems it is more complex than that as it has failed to treat its suppliers fairly – you can read more here in a good article in Retail Week.

Actually the moral is that it is certainly worth identifying alternative suppliers if you can, but it is even more critical to treat existing suppliers fairly and then they are more likely to be loyal to you and keep with you even when circumstances change – it’s just one of the 15 aspects of creating a 21st Century Business that I am including in my book, but a related one is being a good citizen – also about relationships particularly buying local. Bad enough to treat a supplier unfairly if they are a national company, imagine if they are your neighbour or will be asked for a reference as part of the Public Services (Social Value) Act .

And the dreadful thing about Phones 4U is the impact on the nearly 6,000 staff who thought they were working for a profitable and successful and safe business and now they and their families have been thrown into turmoil.

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Tags: success relationships