Economic experts at the Bank of England have written to the Queen explaining why the credit crunch had not been predicted, a newspaper reported on Sunday. The reasons given can be a warning for KAMs in recession, and also point a way forward for those prepared to seize the opportunity.
Essentially, the three-page letter explained that apart from how cheap borrowing had encouraged a "feel-good factor", masking a global imbalance in savings and debt, wishful thinking combined with excessive pride had convinced financial wizards they had come up with a way to spread risk throughout financial markets," it added. "Everyone seemed to be doing their own job properly on its own merit. And according to standard measures of success, they were often doing it well," the letter said. "The failure was to see how collectively this added up to a series of interconnected imbalances over which no single authority had jurisdiction."
In other words, all of the colleagues involved in multilevel and multfunctional management of major customers, in a well-organised supplier-company can each be doing an expert job 'proudly' in difficult market circumstances. However, unless a collective view of management of the customer is taken by a respected KAM, a series of collective imbalances and knock-on effects could compromise the bottom line of the customer P&L.
The way forward is to achieve a risk-reward balance between supplier and customer ROCE aspirations, via effective coordination by the KAM.
As finance is the only language-in-common for all functions, it provides a way for a KAM to really take a collective view, and formulate a team-based customer strategy. This can be made more effective in terms of commitment by translating all aspects of the supplier-customer relationship into financial language. It is then essential to relate the conclusions to the needs of multifunctional and multilevel team members, in terms of cost and value, building respect and influence in the process…
Alternatively, why not allow all the 'customer-experts' to excel at their own 'thing', and await a call from the Palace?