It Happened Again! Are You Watching Your Customers?

by

Purchasing Training Risk

Eliminate Kickbacks

I have to tell you guys, I was completely out to lunch, asleep at the switch for 20 years as a purchasing professional.

I’m talking about one particular area of course.

There are all these courses on “code of conduct” for purchasing professionals, but whose watching the customer?

Are you familiar with the psychological concept of projection? Since I would never consider pursuing kickbacks from a supplier, it never occurred to me during that span that my customers might be.

It’s only since I left corporate America that I have been shocked at the prevalence of customers receiving bribes from supplier, and more importantly, I have realized that these are almost never initiated by the supplier.

I never saw any of this while I was a purchasing executive. Frankly, I was clueless.

So, it happened again. I got an email today from a customer inside a major company who has been wanting to broker a large consulting contract with me.

Nothing out of the norm, right?

Well, in his last email to me, prior to us getting down to final contract execution, he wrote this:

think of a way you can mabe help with backup support to me .confidentially

I kept all the fonts and formatting exactly the way it was when I received it for effect. I want you to see exactly what I saw. I’m guessing he sent it by cell phone, because it was sent on a Saturday and because of the broken grammar. None of that matters though.

Can you read between the lines? I’m not sure I could have 20 years ago. He is asking me to give him kickbacks. This is how it starts.

I keep racking my brain asking myself who else in my career was possibly receiving kickbacks. All those customers who insisted that the company’s doors would close if we didn’t use a particular supplier.

All those prenegotiated deals by rogue customers. Was this the real motivation that purchasing is a roadblock? Now I’m really wondering if this is just a manufactured cover-up.

Now I personally know of people who are millionaires from kickbacks. You read that right. One of them told me that he would only accept such payments in cash or gold. All non-traceable. You can’t make this stuff up.

And I know sales managers who openly tell me that they bribe their customers. NFL tickets, family tickets to Hawaii to attend a “training” session, trips to Napa Valley, etc. The recipients include people in the most visible of positions, from private to public sector. Nobody is exempt.

What this tells me is that suppliers need to be told early in the discussion process, prior to negotiations, that if they are ever contacted by someone in your organization with request for kickbacks or bribes, that you are to immediately be notified. Or give them a confidential email address to notify.

Also tell them that if they ever participate in such an activity, they will be forever blacklisted from your vendor pool. Remember, suppliers don’t like this any better than you do. They want a way out too.

What really needs to happen is a comprehensive risk assessment process in your department and your end to end purchasing processes, inclusive of the customer piece. I do this regularly for many companies. It’s a huge time saver and a huge results saver.

Plus, internal audits become a no-brainer activity. No rush to clean things up and put processes in place. Everything’s in order already.

What I really want to get across is don’t assume that just because you are well intentioned in your job, that your customers are too. Don’t fool yourself and think this only happens in other companies. It took me 20 years to figure out that’s a complete pile of manure.

Here is all you need to know, and I promise you this is not a scare tactic:

IT IS HAPPENING WHERE YOU WORK, RIGHT NOW, AND RIGHT UNDER YOUR NOSE.

It was for me too. I don’t know how to be any more clear about it. Don’t wait for internal audit to find this stuff, they never do. We are way smarter than they are.

Ask me for training solutions I offer to help you address this and other risks in your purchasing department. You can’t afford to let this stuff keep happening.

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