Mutual risk can redefine the customer

21st century management
Mutual risk can redefine
the customer-provider relationship
A contract between customer and vendor
generally leaves little doubt about their
relationship: the former is to be served;
the latter is to provide the service. But
when the venture is fraught with peril for
both sides, these traditional roles often
must be reassessed.
Such was the case when Technicolor
and Airborne Express joined hands, as
they found their way together through
unchartered territory – bound by mutual
risk, mutual obligations and the haunting
prospect of an exclusive market.
For decades, Technicolor has been the
premier film duplicator of the movie
industry. Surprisingly, Technicolor
usually produces less than 5,000 copies
of a film – even for a blockbuster. Those
copies were distributed all over the
country by a small Hollywood-based
delivery service that had been in business
since the golden age of silent movies.
Technicolor wanted more control of
the sometimes haphazard, unreliable
delivery process. It approached Airborne
Express (now DHL) with the idea of
delivering 4,000 to 5,000 film canisters
to theaters all over the nation on the
same day within a two-hour window.
Airborne Express execs were known
for accepting daunting shipping
challenges. But to even dream of
meeting Technicolor’s unprecedented
requirements, Airborne would have to
invest hugely in its own infrastructure.
Technicolor also would have to expand
its operations, taking on responsibilities
well beyond that of a film duplicator.
6 Industrial Management
And, in the beginning, Technicolor had
only one studio willing to give their new
distribution system a try – if and when
Technicolor found a reliable carrier.
The negotiations between Technicolor
and Airborne Express took six months,
culminating in an all-nighter just hours
before the studio in question needed
Technicolor’s assurance that a carrier
had signed on. Wisely, each organization
appointed an advocate from its own
side to look out for the interests of the
other side, for only a win-win solution
would make long-term implementation
profitable. It was clear to the Technicolor
and Airborne Express execs that the
traditional customer-vendor relationship
was evolving into a joint venture. An
agreement was attained at sunrise, but
only after the opposing negotiating
teams agreed to help each other.
Airborne Express agreed to ramp up its
fleet of trucks to distribute the thousands
of 50-pound film canisters all over the
country every week. Technicolor agreed
to establish two huge distribution
centers – East and West – to make it
easier for Airborne to pick up and return
the canisters. Airborne would create
a yet-to-be-invented tracking system
(the precursor to the shipping tracking
systems now familiar to all of us);
Technicolor would create a database for
the nation’s 7,000 theaters.
The wild card was the end user. Theater
managers wanted to reserve the right
to make last-minute film screening
changes, which could upset the delivery
It was
clear to the
and Airborne
Express execs
that the
was evolving
into a joint
schedule. The working hours of theater
staff were another issue: Would someone
be at every theater, nationwide, to accept
delivery of the film canister? Who at the
theater would call Airborne for pickup
once the film (in demand by lower tier
theaters in the heartland) had been
shown? Would Airborne have to create a
split-billing system since it was serving
not only Technicolor but thousands of
theaters as well? Many other issues were
unanticipated and only could have been
dealt with fairly in an atmosphere of
complete trust.
The net result was impressive: Of the
more than 630,000 movies delivered
and retrieved by Airborne Express in all
kinds of weather, only 100 were late in
2001. Technicolor had demonstrated
to the movie studios in Hollywood that
it not only could duplicate the films, it
could guarantee delivery – thanks to a
partnership with Airborne Express that
brought out the best in both organizations.
Dan Carrison, a business writer and
consultant, has authored or co-authored
four management books: Semper Fi: Business
Leadership the Marine Corps Way, Deadline!
How Premier Organizations Win the Race against
Time, Business Under Fire and From the Bureau
to the Boardroom. Carrison is a general
partner of Semper Fi Consulting and founder
of He also
teaches corporate communication for the
University of La Verne. He can be reached at