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Trust: the key to success for manufacturers and their agents.

Military leaders know the difference trust makes in combat. Politicians, corporate managers and many others can attest to the value of trust in their day-to-day relations with others - and so can agents and their principals.

There are times when the manufacturer/agent relationship is stretched so that only trust continues to hold it together. And there are times when trust doesn't exist and people do things they regret. But the real value of trust is the bond it builds between agents and manufacturers so both can grow and prosper.

When I talk about trust, I'm not implying that it is the opposite of lying or out-and-out deceitful behavior. I am talking about the kind of trust that develops when people accept each other on an equal footing. A manufacturer who constantly checks up on an agent doesn't trust that agent. An agent who constantly checks on the delivery order, even though he knows it's on schedule, doesn't trust his principal. In both cases, there will be trouble sooner or later.

So far, I have discussed trust in a negative way. Trust, however, is a positive force. It's the energy that permits manufacturers and their agencies to work effectively as a team. It's the glue that keeps them together amidst trouble.

Agents and manufacturers build mutual trust when they know and understand each other's goals. When there is a hidden agenda, there is no trust. One party may be able to deceive the other for a while. Sooner or later, though, the truth will come out and the relationship will collapse.

I have talked with several agents and manufacturers about mutual trust. Almost without exception, all mentioned similar aspects of their relationships that they felt contributed strongly to their sense of trust.

"When an agent and a manufacturer are both committed to the successes of their individual businesses, there is solid ground for trust," an astute manufacturer told me.

By this, he meant that each was committed not only to his or her own business, but the success of the other's business as well.

Another factor often cited was the integrity of each organization. Integrity, in this sense, is the measure of overall concern an organization has for the other. Is the entire agency staff as interested in selling a principal's products as the agency's owner? Is the president of the manufacturing firm as committed to helping agents as the sales manager? Sadly, many relationships fall apart when an organization fails to back the person on whom others have built trust.

Common Goals

Agents are at their best when they know the manufacturing executives they work with are headed in the same direction that they are. But this isn't always the case. For example, an agent told me recently that after working his tail off for a new principal for about three years, he was starting to see some decent commissions.

"I was willing to invest the time and effort in the early years," he said, "because the president had told me his goal was to build a strong company with longevity. This may have been his initial goal, but after three years of hard work, this guy sold the company to a giant. The giant had its own sales force and dropped all the agents immediately.

"Building a company may have been the president's original intention, and he may have changed his mind along the way, but I was deceived ... It turned out he wasn't building the business for the long pull; his goal was to build something he could sell to someone else."

Although agents' and manufacturers' successes are intertwined, it's seldom possible for either party to be thoroughly objective in every situation. Self-interest is always present. But when you recognize this and understand the effect it can have, you've gone a long way toward building a trusting relationship.

A manufacturer told me what happened when he placed self-interest ahead of objectivity. "One of my agencies had grown rapidly and was doing an excellent job with my line," he said. "However, there was still a lot of room for growth of the line in the agency's territory. Naturally, I was anxious to see this growth as quickly as possible. And, like all manufacturers, I wanted more of that agency's time.

"I knew the growth had come from considerable personal sacrifice on the part of the owner. He had borrowed a lot of money personally to support the additional people he had hired. Nevertheless, I pushed him to expand further so that I could get that share of his territory I knew was there. He did expand, but in doing so he backed himself against the financial wall and nearly failed.

"Yes, I was anxious to get the additional business quickly, but it wasn't critical for my company's survival. So you could say that I wasn't exactly objective when I continued pushing the agent to expand when I knew he was overextended."

This manufacturer exhibited rare insight. He is also a person who is very close to his agents. And he is now fully aware of the need for real objectivity.

Most good business is run democratically, but you can't call the workings of the business world a democracy. Good executives make decisions based on their knowledge and experience. They seldom put things to a vote.

However, good executives usually seek input from those who will be affected by their decisions. They recognize the value of consultation. When they make an unpopular decision, they usually share their reasons with all those who will be involved. It's those who do things unilaterally who are not trusted.

Trust is a fragile commodity not easily established. Unfortunately, it's often lost when it's most needed. Many companies - agencies and manufactures - are facing difficult times. But we shouldn't forget that without trust, the agent/manufacturer relationship will face trouble sooner or later. Today is not a time to bicker - it's a time to reaffirm our commitment to each other.
COPYRIGHT 1993 American Foundry Society, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Management Matters
Author:Gibbons, James J.
Publication:Modern Casting
Date:Sep 1, 1993
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