The after-effects of COVID-19 for business operations are far-fetching. Without discipline, you’ll have to deal with massive breakdowns. Brian Power’s guest in this episode is Colin Clayton, Business Development Executive at Staples Advantage. Colin talks with Michael about how you can’t rely on one employee or supplier to run your processes. Otherwise, if that one employee or supplier fails, the entire chain of dependables collapses. Join in to find out how you can prevent this from happening. Don’t miss this episode!
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Business Operations: How To Prevent Breakdowns From Happening With Colin Clayton
Welcome, Colin Clayton. It’s great to have you here, friend and business networker as well. Tell us more about you and what you do.
I’m with Staples. I’ve been around the business world since 1987. It’s funny as so much has changed. It boils down to basics, blocking and tackling discipline of business. I’m talking more as Colin Clayton incorporated now about what I’ve seen over my lifetime, what I see shifting and changing, and how people can help themselves with maintaining discipline, control and an open mind.
We’ve spoken before. The business world is changing, especially when it comes to traditional commercial space and office space. Let’s talk about what you see and some suggestions.
You mentioned that things are changing and sometimes things are painful. A wise man says, “Pain is inevitable but suffering is optional.” The biggest issue we faced was COVID in 2020. I’ve got the luxury of being in sales so I need a lot of people in different worlds and different levels in the organizations. At first, it was like a stun gun to the environment. No matter who I was talking to, what industry or level, it was a stun gun. Some people said, “Let’s deny it and hope it goes away.” Others took extreme measures and pulled their horns in.
What I saw as the most impactful thing that hurt the organizations was either a lack of discipline or too much dependence on either one employee or one supplier. When those things broke down, it caused mass hysteria. What I mean by that is where people had a procurement program. Suddenly, Joe from procurement was no longer there, or the company that they were buying from downsized and they lost their contact. What happened is people started reaching out to where everybody goes, which is Amazon. Everyone says, “Let’s freak out and go to Amazon.”
The minute that happens and it’s successful, what I mean by successful is let’s take something that you find here in the Hudson Valley, a small business of 100 people or less. You’ve got 30 people that are putting in requisitions. Now, there’s no one to requisition to but they need something. They go out to Walmart.com, Staples or wherever they go. Once they’ve had success finding an item, they’re going to go back there. What happens then is that you’ve got this rogue spend going on and then you also have a lack of reporting. You’ve also got an influx of invoices that somebody in accounts payable that may not be familiar with what an invoice looks like has to now match up to a PO that may be non-existent. You’ve got a data breakdown. With a data breakdown, you’ve got a budgeting breakdown and this can easily spiral out of control.Pain is inevitable, but suffering is optional. Click To Tweet
The other issue that you’ve got is thinking about the pandemic. People were no longer in the office. Everybody is working from home. If you had purchased products from any supplier, that product list might have changed. You may now be buying another list of products but you have not negotiated the price on your new core list of products. You’ve got an antiquated core list that you’re not buying and a higher-priced core list that you’re not negotiating and managing. I say that because some people look at it and say, “This guy is from Staples. I’m talking about office supplies. It’s a paperclip.” I’m not just talking about office supplies. I’m talking about anything that you purchase out there. You’ve got that issue going on.
You’ve got the forward look as to, “We’re going to come back to this office at some point.” Some people are starting to hybrid and morph back in. They start buying whatever they need to work from home off-budget. They’ve got an office space that they have to reconfigure to be safe and COVID-compliant. Some people, especially on the white-collar side of it, don’t need to be back in an office to be successful because we’ve got all these tools. If you’re in a touch industry like healthcare or something where clients have to be seen, you have to now understand how to manage that and be compliant with all the rules. There’s a lot going on. The one recommendation I’ll make is understanding who you can trust and knowing to have the people that can manage the change internally. When I look at internal change, there are a few things I see that are problems.
One of the biggest problems I find is that the decision to change gets isolated to the upper floor of the building without any real questioning of the technical and user needs. It becomes a price and financial decision, not so much a, “How is this going to affect our business from the day-to-day user? Does this fit our needs?” You’ve got that issue of a push down from the top change. You’ve got the converse problem where you’ve got leadership that wants to hear from their people, but the people don’t want to change, even though it might be good for them because they’ve always done it this way. It takes a very strong leadership to understand both sides of that and how to manage it.
We’re headed into a landscape that we have never been in before. Heading back, I think of hybrid or how people are doing it from home. It leaves an opportunity for wrongdoing or fraud. Sometimes, that is one of the main reasons why some of these systems are set up. I feel like we’re headed into another phase of this. There are a lot of things to watch out for.
The long-term look is, “How are you going to run your business when you get back? How are you going to do that?” What you’re going to be doing is you’re going to have a lot of corrupt data if you’ve let this thing get out of control. The good news is it doesn’t have to happen. You can always look in the rearview mirror and say, “I did this and here’s why I did it,” but you can never go back and redo it. I do believe that human nature, I don’t know if there’s any abuse going on out there, but I think it gets out of control. To rein it back in can be a bit of a chore.
You sent me a good blog article from you guys out like central procurement. Even if you’re not in a huge company, you can still have a consolidated spend.
Yes, you can. Let’s take a look at a company that has got 4 or 5 locations, but each location does its own thing. There’s no central purchasing agent. There’s autonomy there. Where you can take advantage of that is people get together. Hopefully, they talk to each other. Any major corporation can link locations together for pricing as long as the people inside agree on what they want to purchase as a core item list. To your point with the technology, each building could have its own administrator or there could be one administrator for the company. Without centralized purchasing, you’re still going to be okay. There are ways to do it.
I could see there’s an opportunity for waste there. If you have Joe in office one that likes a certain product over Bob in office two, it’s like, “Why are we coming together and seeing what’s the most efficient for the company?”
The way to tackle that and the way we tackle it here is through quarterly business reviews. We’ll get together with each location and show them if they were more synergistic in their purchasing. They could save some money. We call it SKU rationalization. Even with centralized purchasing, you get a usage report from someone every quarter and see where they keep ordering all these different types of pens. I’m using pens as a very simple item but then you’ve got 50 boxes of them laying around, and that adds up.
I’ve got four kids. The little things that we teach them when they’re little like, “Pick up your toys.” This is the whole same thing in the adult world of business. Be disciplined because if you’re not disciplined in something as simple as office supplies, you can see that blossoming into no discipline elsewhere. I’ve owned my businesses in the past. People say, “You owned your own business. You must be rich.” There are a lot of expenses that come from owning a business. You never know when you’re going to have your last penny. We shouldn’t treat our employers any differently. You want to get in early, get yourself set up, get organized and have some discipline.
It’s that rule I like to follow. Treat the businesses that you work for as your own.
For some people, that scares me.Get organized and instill discipline in your business. Click To Tweet
I mean in a good way. You guys cover a five-step process. The first step is explaining to everybody why we’re doing this.
Let’s walk through it. The name of the article is No Central Procurement? You Can Still Consolidate Spend — Here’s How. Part of getting people to agree to do something is explaining the why. That speaks back to the top-down push thing, “This is the way we’re going to do it.” That says, “We’re doing it this way.” To your point before, it doesn’t make sense to pay several prices for the same product from plant B to plant C. That is dependent on the vendor. You have to push your vendor and I’ll tell customers, “Push your vendor for business reviews.” People can get sloppy with that. Make that a top priority. Internally, you want to get your leadership to appeal to the desire to make things more efficient. By having multiple items, it can get confusing and people pick the one that pops up first.
Step two is do your homework. You got to figure out the current buying landscape and you have to understand why people buy what they buy. This is not just for office supplies. If you’re a leader of a company and you don’t understand the technical needs of a product and you’re looking at something cheaper, you could have a breakdown in the service to your clients. Let’s remember one thing. We’re talking about procurement here, but what we’re really talking about is the health of a company because every company, no matter what they’re doing, is getting revenue from a buying public. If your internal process breaks down because you bought something like cheap copy paper to send out a report on or cheap parts for a motor you’re building and the motor breaks, you’re in trouble. You want to understand what’s the reason why these people are buying so many different things.
From there, deciding on suppliers. There have been a lot of talks both ways on consolidating down to a single supplier for internal soft dollar cost reasons like having one invoice with all of the different categories that supplier can manage or getting one big delivery versus 50 UPS deliveries or fleet deliveries. Also, I find the most valuable piece of this thing. It’s not about the products. It’s about the questions I asked, how do you use the products? Instead of working in a silo, having six salespeople and their product experts coming in, and trying to sell you widgets, this, that and the other thing. If you can find a supplier or two or top three that can do all the above, you’ll leverage their internal resources and your buying power. You’ll also insulate yourself against that rogue spend if you can get people to purchase from those suppliers.
The reason I pointed to this piece is it gives a nice outline of the step-by-step process and even if you’re not a large business, you can still run.
When I started my wholesale knitwear business, I was a mill agent. I was the salesperson, accountant, delivery guy and everything. I have to tell you that I learned very quickly that I just needed 1 or 2 phone numbers to get the answers to expand my business. That’s important now to build. You’ve got to have a trust factor. Many times, the problem you’ll find is that the representative from the supplier is either new and doesn’t know what they’re doing or is not interested in your needs. They’re interested in what they can sell you.
That has been the way over my entire lifetime where I found what the big differentiation is. What customers are looking for is help. They want to be experts in what they do. They need to be somewhat expert in what you do so that they don’t get hurt. That’s where I say, “If you’re not happy with the rep that you’re talking to, no matter what industry it is, ask for a manager to come in on the next business review.” You put a lot of time and effort into getting that supplier. Maybe that supplier is the right supplier, you just get the wrong person.
If you go back to the final two steps, we’re looking at step four, which is to get buy-in.
We’ve already hit it. Don’t assume that people are buying individually because they want to be different and we all have met that person in our office. We get a new whatever system. Without even looking, there’s always one person who is going to say, “The old system was better.” You’ve got to understand as a leader why that person is buying individually. Employees have a lot more freedom now than they did when I started. When I started many years ago, they were smoking cigars in the office. When I asked them why are we having a 9:00 PM meeting and they said, “Because,” I said, “Yes, absolutely.”
Nowadays, it’s different. It’s a mixed bag but it’s better because you want to get everybody’s input. You’re hiring people to get their input. Understand what their needs are and why they’re concerned about the change. They may have a great idea or they might be difficult but you can work through it. As a leader, don’t be afraid to say, “This is beneficial to the company because it’s an improvement X, Y, Z. What do you think?” Tell them how it can benefit them in the long run, “If we want to grow this company, we have to make changes. Change does happen.”
We said it before. We want people with an entrepreneurial spirit that treat the work and the business as if it’s their own. We also want people that are on the bus with everybody else moving forward.
It took me a long time to say it. I liked the way you said it.If we want to grow, change needs to happen. Click To Tweet
I always say that like, “If they’re not on the bus with us, why are they here?” It’s crazy. It sometimes shows itself just with this, “I don’t want to do it that way. I want to do it my way,” and then that can often unravel.
For instance, you’re a senior executive of a company. You got this new project on your radar screen. You’re bringing in a new supplier and you’re onto the next thing. You’re not managing this. You’re on to running the company but in 3, 4, 5 or 6 months. You’re asking the people below you, “Are we saving like we thought? Do we get any productivity improvements from it?” If nobody has bought into it, they say, “Absolutely not,” and they go back to the supplier they were using. That’s threefold, on the management, employee, and our number five in step, track progress.
Internally, it’s also on the supplier to make sure that you’re bringing the information to the client and saying, “We put this in. It hasn’t been embraced,” but it also goes to a proper onboarding process. When I had my wholesale business, I had to buy some new software and the onboarding process was horrible. I have to say that I did resort back to my Excel spreadsheet and notebook for about three months until they got it together. Track your progress and make sure that you’re pushing your vendors to give you updated information, and be open to what they’re sharing as well. The biggest challenge as a salesperson is getting people in companies to open up and accept some help.
Look at best practices that the vendor may be sharing. It’s ultimately embracing change. Now, it has changed as we’ve never seen it before. There’s always more than one way to look at things and be open to that.
If we’ve weathered this so far, hopefully, it doesn’t get any worse. We’ve weathered a lot of it. Companies, unfortunately, have not all made it. Those that did are going to come out stronger. I appreciate the opportunity to talk to you.
I know you said you didn’t want it to be all about Staples. Tell us how Staples can help.
When you think about Staples, most people think about the store. I tell people I’m at Staples and they say, “Are you in the Middletown store?” I say, “No, I’m in corporate business development.” One thing we look at is changing that opinion or perception of Staples just has paper. It’s interesting to note that Staples is one of the largest suppliers of janitorial and facility supplies to clean the entire building, including air filters as well as technology. A lot of large corporations will purchase technology from us. We had a massive furniture program at Vassar Hospital. It’s gigantic. We’ll go into a business on a Friday night and they call it decommissioning. We’ll remove all the old furniture, bring all the new furniture in, and break the room supplies. We are one of the largest sellers of coffee in the United States. If it’s something you find in an office, you’ll find it at Staples.
That’s something I did not know until we reconnected in your new position. A lot of people who check out our webinars series are going to be surprised that they can turn to Staples for help with a lot of their business needs.
Everything is online. We talk about centralizing and making things easy. It’s all a click away. We’re the third-largest retailer on the internet behind Amazon and Apple, which blew my mind when I got hired. I did not know that.
It’s an interesting fact about Staples.
Things you never knew but wanted to ask. It all boils down to that one-on-one conversation like I did when I started many years ago. What do you need? How can we help? What’s wrong? That’s life 101.
Colin, thank you very much. We appreciate the time and I look forward to talking again soon.
Thanks, Brian. I appreciate it. Take care.
- Colin Clayton
- No Central Procurement? You Can Still Consolidate Spend – Heres How
About Colin Clayton
I am a straightforward, experienced sales and management professional with over 30 years of experience in helping clients improve and perfect their businesses.
A customer-first attitude coupled with unmatched integrity and a solution-based approach to problem-solving has contributed to my success and excellent reputation in the industry.
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