Helen Green

Leading Supplier Culture

One of the perennial pitfalls of business leadership is that of maintaining too narrow a focus; concentrating solely on ‘the business of business’ to the exclusion of all else. But every business sits in the middle of a web of connectivity, with the actions of one influencing and affecting not just immediate suppliers but also businesses on other strands of the web.

Pay your supplier late and they may be forced to do the same to their supplier, with the ripple effects moving ever outwards. The news therefore that a recent survey by Tungsten concluded that the average SME in the UK is owed more than £40,000, with some half of that being overdue, is disquieting not just in the effect on immediate cash flow but also in the effect on businesses across the business spectrum.

It may be time to remember one of the golden rules of good business leadership, namely that you should act towards others as you would hope they would act towards you. Taking a more inclusive viewpoint, being aware of the effect of late payments on the wider supply chain and working towards a prompt payment culture not only demonstrate strong leadership but also positions your business as one  which is prepared to act with care and concern for others.