On this date in 1986, the space shuttle Challenger broke apart 73 seconds into its flight, leading to the deaths of all seven members of the crew. After an investigation, it was found that the disaster was caused by a faulty O-ring that allowed a gap through which combustion gases could leak and produce a deadly flame path.
The failure of the O-rings was attributed to a faulty design, whose performance could be too easily compromised by factors including the low temperature on the day of launch. It was also determined that NASA’s organizational culture and decision-making process played an even greater part of the disaster. NASA staff members revealed that they knew the O-rings had failed in the past and that they weren’t suitable for use at temperatures below 40 degrees yet still decided to launch on a 28 degree morning. These employees expressed their feelings that management was not interested in any outlying opinions or viewpoints about the safety of the launch. More disturbing than the catastrophic effect of such a seemingly simple part failure was the failure of NASA to overcome their “go fever”.
The term “go fever” is used in the space industry to describe a push to finish a project, sometimes at the cost of safety. Go fever, a form of groupthink, refers to the overall attitude of being in a rush or hurry to get a project or task done while overlooking potential problems or mistakes. It is due to the tendency of individuals to be overly committed to a previously chosen course of action based on time and resources already expended despite the possibility of reduced benefits or considerable risks. It can also be due to the desire of members of a team not to be seen as the one who is not committed to the team’s goals or to be the one interfering with the team’s progress or success.
In a groupthink environment, rationalization, peer pressure and complacency lead to an illusion of invulnerability and unanimity. NASA management became accustomed to these phenomena when no serious consequences resulted from earlier episodes of O-ring failures. They thought they were invincible because as a team they rationalized that the risk from the faulty parts was acceptable to ignore.
The negative results of groupthink behavior can affect companies of all sizes and all industries.
Diversify Your Team. Make an effort to form a team of diverse personalities and strengths and avoid putting “yes people” in decision making positions.
Avoid Being Too Directive. If you are a leader or project manager, avoid stating preferences and expectations at the outset of a decision making process.
Checks & Balances. Create subgroups or departments to manage different parts of a process and play devil’s advocate.
Encourage Healthy Conflict. Create an environment where ideas can be challenged without reprisal.
Brainstorm Regularly. Brainstorming is a non-threatening way for ideas to flow freely without criticism
Analyze Risks. Examine risks of preferred and alternative options and make sure the team understands the risks before coming to a final decision.
As manufacturers, the Challenger disaster can be used as a case study to examine groupthink culture in our industry. The manufacturing industry makes parts and products that could very well mean life and death. Making an effort to improve your organizational decision making process ensures that you will get the most out of your diverse team of employees and that your customers best interests are being served.
Supplier relationship management (SRM) is the specialized practice of strategically planning for and managing relationships with suppliers to maximize the value of that relationship.
When reading about SRM the focus tends to be on workflow, software and “strategy” while the most important part, the relationship, is not being discussed often enough. A relationship, according to Merriam-Webster, is the way in which two or more people or groups of people talk to, behave toward, and deal with each other. This relationship buyers are seeking to strategize is simply an interaction between real live people that can’t always be measured numerically.
It has been said that a business can only be as good as are the suppliers with whom it works. Therefore building a good supplier relationship is almost as important as building a good relationship with your customers. Treating suppliers well produces intangible benefits that can lead to a tangible return.
Scheduling Preferences – A healthy buyer-supplier dynamic leads to preferential treatment when it comes to competitiveness boosters such as advance ordering, stocking arrangements, and production scheduling. Having a preferred customer status increases the responsiveness of your supply chain which in turn improves the availability of products to your customers.
Supply Chain Stability – Investing time to understand how suppliers produce your parts gives you the ability to foresee and prepare for anything that may effect the lifecycle of your components. By communicating effectively and regularly with suppliers, buyers ensure that cost, quality and timeliness of products are all being managed. Higher quality increases customer satisfaction and decreases returns, which adds cash to your bottom line.
Input to Innovation – When your suppliers have bought-in to your success they want nothing more than to see you grow and grow with you. When considering a new design or prototype, using a trusted supplier who has experience not only in your industry, but also with your company’s products, saves time in the product development process and gets your new product to market. Positive long term relationships can lead to your best suppliers improving manufacturing processes and technology that help your company develop competitive advantages and cost savings to beat your rivals.
Financial Considerations – Open lines of communication elicit trust that can lead to more flexible terms such as early payment discounts or extended payment options when additional cash flow could benefit your business. Establishing and maintaining a good payment history means your suppliers will be more likely to reciprocate when and if you need it.
There are many ways to promote a healthy relationship between buyer and supplier. Pay on time or if something unexpected happens, call your suppliers and talk to them. Get to know them with an occasional phone call or visit to their site. Help your suppliers help you by giving them adequate lead times, drawings and target pricing. And keep your suppliers informed about changes in your business including sales volume forecasts, new products and staff changes to make sure they are prepared for the changes in your needs.
In order to truly reap the benefits of supplier relationship management, buyers must establish clear communication paths, mutual understanding and respect between both parties.