Novinium News, July 2017: “Partnership Principles”
Glen Bertini, CEO, Novinium
Novinium does business with hundreds of firms. We have over 100 customers and over 40 key suppliers. Occasionally we have fired suppliers. Occasionally we have fired customers. Whether supplier or customer we choose not to do business with these entities because they fail to meet the four requirements to be a Novinium business partner. What’s good for the goose is also good for the gander, so we also demand that we treat each of our business partners (customers and supplier alike) with the same four principles.
Enjoying a Novinium Partnership
Principle 1: Both parties benefit from each transaction. If I buy a tennis racket for $100 from a retailer, I expect to get at least $100 of pleasure from striking balls with that racket. I also expect that the retailer bought the racket for less than $100, and after paying for facilities and the labor required to stock shelves and check me out at the cash register, the retailer still made a profit. Everybody involved in the transaction is pleased that they made the transaction. Each party benefited.
Novinium has no interest in concepts like loss-leaders, buy-one-get-one-free, and taking-the-bad- with-the-good. These tactics erode trust and encourage unproductive gaming … the opposite of partnering. Each and every transaction should be designed to be mutually beneficial. Both parties should recognize value from every billing unit, every transaction, every encounter.
Principle 2: Both parties share random risks. Acts of God are random risks. Imagine an earthquake strikes the community of one of our customers. Consequences of the earthquake include widespread power outages. The circuit owner must suspend all cable rejuvenation activity. We will not hold the customer responsible. Likewise, if we have a single team at a customer and the team lead is stricken with an illness, the customer is not going to hold us responsible for the rejuvenation delay. Stuff happens to both parties.
“What makes a principle a principle is our willingness to apply it to our own disadvantage.”
Stephen L. Carter, Professor of law at Yale, “Suing Your Way to the White House”, The Wall Street Journal, November 27, 2000.
Principle 3: Both parties work to eliminate or reduce known risks. There are many things that happen, both good and bad, that are not acts of God, but the specific thing is difficult to foresee with precision. For example, very few circuit owners know how many splices might be on a cable segment and even fewer know where those splices lay, whether or not they might support flow, and how much it might cost to find and replace those that should be replaced. This is a risk we face on almost every cable segment we touch. Our contract provisions should anticipate all of these risks and align our partners’ interests with our own. This is surprisingly easy to accomplish when both parties embrace partnership above one-upsmanship – win-win over a zero-sum mentality.
Principle 4: Both parties are responsible for their own mistakes. This concept is so simple that some Novinium News readers may think this principle need not be stated. If I screw up it’s on me; if you screw up its on you. Unfortunately it’s not unusual for some firms to insist on, “If you screw up it is on you; if I screw up it is on you!” Novinium is not interested in these non- relationships. There are times when we walk away from business opportunities. More often even mammoth-sized firms will adopt our fourth principle, but only after long delays. We’re happy to provide the leadership.
We apply these four principles to each and every business partner. Like the stool nearby, we need all four legs. Three out of four will not do.
Occasionally we are in a position to take advantage of a supplier in a way that, at first glance, might benefit Novinium. Temptation averted, we treat every entity with the same set of four rules. A master applies principles uniformly, even when doing so appears to work against Novinium’s short-term interest. The master applies them, because in the long run, robust partnerships endure and prosper. Benefits accrue to all.