QQB:

QQB is a small start-up Silicon Valley Company. They are a world leader in high tech OEM subsystem industry, and are well known for its talented engineering team.

This attracted a giant Japanese company Sato Inc. and a business relationship was established to jointly develop products for the global market. This relationship went on for a few years and Sato Inc. was considering a more major role for QQB in a new market QQB never participated in before.

The Problem

Within QQB, resources are stretched, just like many companies these days. Engineering teams are working on multiple projects, servicing multiple customers, all requiring special attention. As a result, product deliveries are chronically 3 to 6 months behind schedule, with too many bugs left in the final products to completely satisfy Sato Inc.

At the same time, Sato is instituting a new company-wide project management system which they imposed on all of their technology vendors similar to their internal team, at least to all their Japanese vendors.

As a result, Sato's negotiating team demanded QQB to comply with numerous data gathering requirements from the engineers participating in the project and make weekly submissions to Sato. If not complied with, Sato will not proceed with awarding the project to QQB.

In Japan , customer is god. Giant Sato expected nothing less than full compliance from QQB. The negotiating team from Sato expected to be treated with warm reception to the new project management system. But being a Silicon Valley startup, QQB really could not afford the extra manpower to hire an administrator, let alone wasting every key engineer's time every single week for something that is perceived to have no value.

Needless to say, everyone at the meeting was frustrated. The discussion headed into a deadlock since neither side wanted to give in. By the way, Sato is the number 3 customer of QQB and accounts for more than 25% of QQB's revenue. QQB management really want the new business, but not at the expense of hiring additional personnel and changing company culture. As the assigned project manager of QQB, what would you do in this situation to get the additional business?

The Solution:

Utilizing the principle of intimacy, Mr. Chu assumed that there is a way the two sides can work together. First thing is to keep the first thing in mind. Why did Sato ever consider awarding the project to QQB in the first place? It is QQB's talented, fast paced engineering team that delivers much more superior product in much shorter timeframe than Sato's own engineering team. Keeping the benefit in mind, Mr. Chu advised to look at the common ground first and work out what can be accepted by both party to proceed. Instead of detailed weekly written and complied reports to be submitted to Sato, Mr. Chu suggested conference calling between key engineering personnel between the two companies and build a global cross-Pacific engineering team. The proposal was accepted only grudgingly and with Sato's high skepticism of whether the project will be a miserable delay again.

Sato's key engineers were invited to Silicon Valley to work side-by-side QQB engineering and QA staff to discover issues early and allow for time to work through corrective actions collaboratively in all major product decisions, from HW design to software UI, feature set trade off discussions and work schedule flexibility, taking advantage of the time difference, and vacation timing. All the way, project team in QQB had great communication with Sato team and really worked as a single team.

As the result, fifteen months later, QQB project team emerged and delivered the product 10 weeks ahead of schedule. Since shipping product ahead of schedule never happened in the history of QQB, Sato's group manager was caught off-guard, but very much delighted. One day, he flew to QQB out of the blue and shared their 5 year product road map, which had not been done before even at QQB's request and desire. As a result, QQB was given the opportunity to an additional estimated $50 million dollars to its revenue for the next few years.

Mr. Chu made the relationship work between the two companies cross the Pacific. The number one principle was that he believed that there will be a way to build intimacy and found acceptable solution for both.

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