Loblaw’s announcement of support last week marks a turning point for the Code of Conduct in Canada. Working over the past year with the forward-thinking Canadian suppliers to prepare for winning in a Code environment, I’ve witnessed open concern around Loblaw & Walmart’s lack of support. Now with all the Canadian owned retailers committed, USA’s Walmart (and Costco) will feel extra isolation in their position. If left too long it will be interpreted by customers as an open intention not to play fair. As we now know, shoppers don’t like that.
The Code’s Interim Board, Code Development Group and FHCP have worked hard for this breakthrough. Whether it was government pressure, team negotiation or shopper boycotts that led to the Loblaws support doesn’t really matter, they are in. Concerns around the Code are fast changing into belief and whilst the last remaining retailers are enrolled and recruitment for an Adjudicator begins, suppliers now need to feel a new urgency for getting ready. Understandably some suppliers have kept their head below the parapet on this, even they can now enjoy the fruits of other’s labour but now they need to act to be capable of benefiting.
The Canadian code aims higher than that of the UK or Australia. In common is goal creation of fairness in negotiation, but the Canadian code extends this to promoting collaboration. The existence of the code obviously does neither of these things overnight. In ten years from now there will still be issues encountered however the backdrop of the code creates a positive force and I predict rapid changes will take place initially then gradual and constant improvements ongoing. Both the UK and the Australian code have had their issues. At Sentinel we’ve helped suppliers to work through those and make the fairness more real every year. Canada in my view starts with a better stronger code as a result of learnings from those markets but the code will not catch fire unless it is used by all suppliers. Benefits will not fall into your lap. We saw in the UK that some retailers will stick to the letter of the code rather than the spirit of the code. They can get round the clauses by changing their language, a demand becomes a request for example. In other cases, we saw an adoption of code language and process to acidic letters in attempts legitimise threats. This is a minefield to the uninitiated. Work needs to start now to be truly ready and gain competitive advantage.
Getting ready will involve multiple simultaneous actions. 1) Review and create a plan to renegotiate the weakness out of the current supplier agreements. 2) Adapt internal structure and resource to set and enable a coherent approach 3) Equip the sales teams with the skills to negotiate in this framework. We have found in the UK and Australia that the best leverage of the code is to use expertise to avoid conflict. There is a trainable language of disarming code breaches before they escalate, and transitioning towards better mutually beneficial outcomes. In our methodology at Sentinel, we can show commercial teams how to RECOGNISE a breech, REACT to disarm it, and then RESTORE the mood in such a way as to build collaborative approach.
There’s so much that can be done now to make the collaboration happen, but it requires changes in knowledge and skill which vary by function so with our experience of making it work in the UK and Australia let us make your journey smooth and easy. Please contact us direct, meet us at the FHCP lunch on June 6th or via our partners FHCP to explore how this can be deployed in your business.
Main Image Editorial credit: Elena Berd / Shutterstock.com
