The Year-Two Shortcut

The situation

Two years ago you chose to grow by building long supplier and customer relationships rather than squeezing them. Growth is real but slower than a competitor who renegotiates supplier terms every quarter. Your bank covenant is tested in ten weeks and you will miss it by a small margin. Your CFO proposes a unilateral change to payment terms for your forty smallest suppliers: 60 days instead of 30. They cannot refuse this year, and the change would clear the covenant. Two of those suppliers were the first to refer new customers to you.

Your decision

Do you impose the new payment terms? If not, how do you meet the covenant?

Make your decision & compare with TRU

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Source context

These trajectories cross around Year 3. Before that, Machiavellian looks better (higher growth, more dramatic wins). After that, Cotruglian pulls ahead and stays ahead.

Vanguard Leadership, Volume 1 · vl1-ch02, Section 2 (vl1-ch02.c007)

You cannot be “mostly Cotruglian with some Machiavellian when convenient.” You must choose one primary operating system.

Vanguard Leadership, Volume 1 · vl1-ch02, Section 3 (vl1-ch02.c011)

How would you make your case?

1. State your decision.
2. Explain your rationale in up to 250 words.
3. Identify the evidence and sources you would use.
4. Say what would change your mind within 90 days.
5. Explain what you would not do, and why.

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