Lessons From The Bailout - A Teachable Moment?

It might be difficult, the first time through, to get one's head around the notion that business relationships are assets.  I believe that they are, and, when done right, are built on investments of time, money, and reputation.  This is especially true in the host of relationships that makeup a functioning supply chain.

Our friend Wayne Bourne, in a recent column, Rounding Third And Heading For Home, pointed out the stress that a difficult economy can put on working relationships.  He suggested that supply chain partners who have learned how to weather the storm together will be strong partners when economic recovery is a reality.  Wayne was dealing immediately with shipper/carrier linkages, but the core issues transcend specific supply chain roles.  What he didn't say is what happens to partners who haven't kept their bonds strong during the tough times.  Or to those who have abandoned underlying principles and values in order to take advantage of a partner's economic vulnerability.

He didn't have to.  We can all probably figure out what happens to relationships that have become toxic.  The only real questions are "When?" and "How hard?"

There are few options in dealing with toxic assets (relationships, in this case).  Underperforming at best, and risk-the-business at worst, one could turn a blind eye to them, and let the bad apples poison the rest of the barrel.  Or, the losers might be cut loose, resuming business as usual with the "A-Team" relationship partners.

My own inclination would be to perform a form of triage, focusing on, and investing in, rescue and recovery of those relationship assets that can deliver a reasonable "bang for the buck," and have promise for the long term.  That might leave awkward questions of a degree of risk in allowing some relationships to recover - or not - on their own, and of figuring out how to proactively jettison those that might be beyond hope.

Realistically, it's easier to contemplate making those who have to go walk the plank when seas aren't quite so rough.  At the moment, it's unlikely that many will cut precious revenue from the top line.  So, we're back to "When?" and "How hard?"

What do you think?  Are you ready to treat key supply chain relationships as assets?  Can some assets become so toxic that dramatic action is the practical approach?  What has worked - or not worked - for you?