My business partners and I have witnessed many so-called “Potemkin villages” when investigating suppliers. Potemkin villages are named after Grigory Potemkin, a Russian statesman who reportedly constructed fake villages in the 18th century to impress Catherine the Great during her visit to the Crimea. The term “Potemkin village” has since come to refer to a facade created to deceive others, especially to distract from or cover up substandard work.
In business ethics and supply chain management, I use the term “Potemkin village” to refer to a company that presents a false appearance of responsibility and sustainability without taking meaningful action to address social and environmental issues in its operations. While they put on a good show for stakeholders, nothing is as nice, clean, or good as it seems.
This creates an interesting paradox: the time and energy spent building a “Potemkin village” for visiting customers could be better invested in long-term improvements to the facility’s social and environmental practices.
Building “Potemkin villages” is time-consuming, costly, and unsustainable in the long term. Instead of building fake appearances to deceive customers, it is more effective and efficient for suppliers to invest their time and effort into genuinely addressing social and environmental issues in their operations.
Suppliers can build a strong reputation, enhance customer loyalty, and improve their financial performance over the long term by taking active steps to address these issues. In addition, by addressing social and environmental issues, suppliers can contribute to positive social and environmental outcomes and help to build a more sustainable and responsible supply chain.
What should you do if you discover that one of your suppliers has deceived you about their operations or supply chain? First, it is important to address the situation constructively and professionally. Here are a few steps you can take:
- Gather evidence: First, gather any evidence that you have to support your claim that the supplier has not been forthcoming. This might include documents, photos, or witness accounts.
- Confirm the facts: Make sure that you understand all the facts before you confront the supplier. This will help you to be confident and clear in your communication.
- Communicate clearly and calmly: Approach the supplier calmly and professionally, and communicate your concerns and the evidence you have to support your claims.
- Offer a solution: After expressing your concerns, offer a solution or a way forward. For example, you might suggest that the supplier works with you to develop a plan to address the issues you have identified.
- Seek a resolution: Work with the supplier to reach a resolution that addresses your concerns and meets the needs of both parties. For example, this might involve implementing new policies, procedures, or training programs or working with the supplier to improve their performance in specific areas.
Instead of creating false appearances to deceive customers, it is more effective and efficient for suppliers to address social and environmental concerns. If you learn that one of your suppliers has deceived you, approach the matter constructively and professionally. Communicate clearly and calmly to reach a resolution that addresses your concerns and meets the needs of both parties.