THE IMPORTANCE OF CULTURE
Lora Ellis asks what is culture? Why is it important? And how do you measure it in sourcing your TMC?
WHAT IS CULTURE?
Here at FESTIVE ROAD, we advocate that a strong, flourishing partnership should be based on a balance between 3 critical components:
- Culture – aligned company values, strategy, engagement model and ways of working
- Capability – the service capabilities of the appointed TMC to meet the demand needs of the client
- Commercials – a contract and commercial structure that drives value for both parties
As you’re probably aware, we are big proponents of cultural alignment within a partnership here at FESTIVE ROAD. We believe in this so much that we lead with Culture in our sourcing engagements. It seems we’re not alone. Our recent TMC Sourcing Research showed that 70% of buyers want to know more about their suppliers’ culture & values and 90% want to hear more from specialists vs. senior executives. But…culture can be a bit elusive, so what IS culture? Why is it important? And, importantly, how do you measure it in sourcing?
Culture is essentially the “personality” of the company: behaviors, beliefs, values. It involves many different components that can impact the partnership, however I’ve outlined a few here:
- Mission & Vision – a company’s formal statement is a minimum expectation, but do their people actually “live and breathe” it? What are their goals and priorities? Where are they investing?
- Leadership & Governance – an org chart and level of escalation document is a great start, but how are decisions made within the company? How empowered are their people?
- Communication & Engagement – the marketing description of their products and services is essential, but are they listening to your requirements and incorporating those into the solution they are building for you? Are they bringing the right experts to the table to truly understand your needs and translating those into a future roadmap?
While we typically start off with cultural alignment during sourcing engagements (mission / vision / company strategy / investment priorities), we actually measure it throughout the entire process. In every interaction with the supplier, the following components are evaluated:
- How are the supplier teams interacting with each other?
- Did they bring the right people to the meeting?
- Were they able to effectively address challenging questions / situations?
- Were decisions made during the call or were there many follow up items for them to check prior to making a commitment?
- Do they understand your need and are they bringing a solution to solve the need?
THE DATING GAME
We often joke that sourcing is like dating. The initial phase is about a personality (culture) match. Do you actually enjoy being with them and do you want to spend more time with them? Are your goals and values compatible?
Only then do you take a step deeper (capabilities) … do they understand you and do you understand them? Will the partnership push each of you toward your goals? Do their skill sets complement yours? Does their technical proposition meet the needs of your programme?
And then the final step (commercials) is the contractual agreement to all that has come previously within the process and the price associated with it that will drive value for both parties, i.e., the “prenup” before walking down the aisle!
Sourcing and appointing a TMC partner is one of the most critical activities that a travel manager will conduct. And Culture is now more important than ever. As business travel volumes start to grow to whatever the new normal will be, TMCs are rebuilding their operations and there will be lots of new staff entering the cultural workplace.
So, it’s vitally important to have a methodology to be confident that your partner has a well-defined, representative and engaging culture. Because making sure that you’ve found ‘the one’ is the first step to a blossoming relationship!
Lora Ellis, FESTIVE ROAD, USA