How can I make changes in my family's business?
Dear Someone Else’s Dad,
I work for my family’s company and have been given a lot more responsibility in negotiating contracts. Our industry is facing new competition and other changes, and I want to have an impact on the bottom line. The problem is that my dad has longstanding personal relationships with several vendors, yet I’ve been impressed by the professionalism, customer insight, and proposals from some of their competitors. Is it appropriate for me to sever some of my dad’s relationships in order to get better pricing and service?
Almost Heir Apparent
Thanks for your note, and congratulations on your expanded role. I applaud you for assessing the value of old relationships as your company faces new market conditions, competitive threats, and technological changes. Although you want to make the right decision for your company, you have to look at all factors, not just the bottom line, before breaking old bonds.
Before signing any contract you should make a business case to your father about why a relationship with a new vendor could benefit your company from financial and efficiency perspectives. Keep in mind, however, that a new vendor may offer you a great price and service in the short term, but it may not have the ability to maintain its pricing arrangement nor have the capacity to grow with you in the future.
I’m not necessarily advocating with staying with a legacy vendor, but remember that long-term relationships may still have lasting benefits, especially if the older vendor understands your company’s culture and has demonstrated that it has helped your company solve difficult challenges, including industry disruptions.
Good luck with your decisions.