How do you decide who you work with?
I have been thinking a lot about who Switchfoot works with and who Switchfoot chooses not to work with. I wanted to document the reasons for the choices we make and to make the process more scientific. I believe who we work with, employ and spend our money on reflects back on us and our values as a business.
We risk being accused of greenwashing if we don’t consistently walk the talk and who we choose to support financially is a big part of this.
I don’t want to underplay how difficult this is to do in practice & consistently. Plus every business will draw the red lines in different places and many will have valid arguments for those decisions but the key point is the discussions are happening and we are testing & revisiting the grey areas.
In deciding on your policies – I recommend you develop your policies with your team as it needs to be the values of the whole business and not just the directors. The policies need to be followed & supported by the team.
How is Switchfoot approaching this area with its suppliers?
As part of our new supplier policy, we are looking at the following areas and we take a balanced scorecard approach as there are lots of grey areas. Equally, there are lots of red lines that will deliver an instant no.
- Can they do the job we need them for?
- Can they deliver it in our timescale & price range?
- Do they understand our market?
- Where are they based?
- Are they a B corporation?
- Review their diversity & inclusion policies – Does it tally with the make-up of the team?
- Review their environmental policy – Does it stack up?
- Review their impact statement – Do they have a theory of change?
- Review security & GDPR statements
- Review their policy on payment of their suppliers – Is it reasonable?
- Payment & treatment of employees – Do they offshore?
- Fines & penalties – Review using Violation tracker
- Reputation and reviews.
- Consider who their other customers are.
- Consider their tax-paying records in the UK.
- Consider their effect on the Environment and Biodiversity.
- Consideration is given to whether the service or product is considered business-critical and whether there are better alternatives.
I expect the list of tests will get longer and our checks will become more refined as we do this more often.
Segregation
Once we have reviewed these areas or key questions we segregate the suppliers.
We split our suppliers into 3 categories:
- End
- Engage
- Endorse
End – We will end relationships with suppliers where doing so would not cause significant disruption to our business, where there is a better alternative already available and where we predict that we would be unsuccessful in engaging with the supplier. Examples: web hosting or mobile phone providers
Here we have a simple choice, buy the better product/service or stick with the old one in the hope that we can influence them. In most cases, our influence would be tiny, so changing our spending and supporting the new better alternative is the most effective use of our time and money. Hit them where it hurts…in the pocket. They do not fit into our values or ethics and we will not work with them anymore… its capitalism red in tooth and claw.
Engage – the supplier is business-critical and there are no easy alternatives. The economy is in transition and some problems are hard to solve, we get that. They are not perfect but might be willing to change. We seek to engage with supplier questionnaires and progress reports. Ultimately we will need to decide on a case-by-case basis, what progress we can reasonably expect. We must be prepared to innovate our own business model so that if we choose to end the relationship the supplier is no longer business-critical. Example: professional bodies or insurers.
Endorse – Where we have found suppliers that are doing a great job then we will seek to support their business by sharing that we use their products/services and highlighting them as options for the businesses we work with. Example: Ecologi or Naked Sprout.
We then review at least annually and when we need to take on a new supplier.
We have a similar approach when selecting which clients to work with.
I would really like to know how other businesses are approaching this tricky area and what successes have you found.
Please note: This is not meant to constitute professional advice. It is generic guidance only –please seek specific advice for your circumstances.