By Bill O’Connor, President and CEO, OC Reilly Inc.

(June 12, 2017)—Two schools of thought prevail in business. One is management by fear and intimidation. The other relies more on building relationships, engaging partners, building trust. Both can work. But do both lead to long-term success?

Certain business texts, when analyzing business strategies, place trust as the very bedrock of high-performance teams. Without it, problem-solving, accepting personal accountability, and establishing a shared approach to commonly held goals can be made enormously more difficult.

In the world of supply chain, this style of management is coming on strong, according to an article in the May 3, 2017, edition of Supply Chain Management Review. 

“Trust hasn’t always been an element in supplier relationships; all too often buyers have been encouraged to carry a big stick and get tough with suppliers to get the best price – no matter the cost,” the story reads.

“That approach to procurement is beginning to change. Manufacturers like GM are leaning that in today’s environment, developing a trusting, culturally aligned relationship with suppliers is crucial to gaining access to the new technologies and innovations that win in the marketplace before the competition.

“Those close-knit relationships can also lead to better financial performance,” the article states.

In our work to achieve peak efficiencies for clients across the health care marketplace, we know that there are times to be tough negotiators and enforcers, but those moments achieve better results when they occur within a working relationship where all parties understand, respect, and trust each other first

The hardline approach can get you a better price, no doubting that fact. The real underlying question, however, is: What cost are you truly paying, in terms of lost business, suspicion, and negative perceptions, for that lower price.

It all begins with establishing a level of trust.

Copyright 2017 OC Reilly Inc.