21st century management Mutual risk can redefine the customer-provider relationship BY DAN CARRISON 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 Technicolor and Airborne Express execs that the traditional customervendor relationship was evolving into a joint venture. 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 www.ghostwritersinthesky.com. He also teaches corporate communication for the University of La Verne. He can be reached at firstname.lastname@example.org.