How to Avoid Stale Supplier Relationships with Better Vision: Part 2 of a Three Part Series.
“The only thing worse than being blind is having sight but no vision.” Helen Keller
Thinking Big – How to ensure innovation is part of your everyday thinking
You are 18 months or 2 years into a 5-year Service contract, and you are feeling really good.
All the initial bumps in the road with your new Service Provider have been addressed and status reports to upper management are a thing of the past. The Services are fully transitioned. The Service provider has settled into routinely performing their work, they know the user’s needs and have delivered not only the right service levels but can clearly communicate in a way that matches your company culture and provides confidence. You understand each other and value the other’s strengths.
Congratulations! You have completed the transition and verified that all Services meet your contracted agreements. You can finally relax.
Or, can you?
It is year 3 of a 5-year Service contract. You have been working with your current Service provider for a while now and things are getting predictable (maybe even a bit boring). KPI’s are green on a consistent basis. And, while there may be the occasional hick up, your Service provider responds and addresses the problem without a lot of micro management from you.
The pre-read for the next governance meeting arrives 2 days before the session. You know that when there is a forecasted change in the Service, you will get the proper change management actions completed and the transition is flawless. You know that the forecast will come in +/- 5% each year. In general, things run pretty smoothly.
Congratulations! Things are pretty much on auto-pilot. You have reached the stable phase of your Service contract. Now you can really relax.
Or, can you?
Well, maybe there are some areas you think might need attention:
- You notice a bit more challenge in delivering the savings programs this year.
- A colleague mentioned having to spend a bit more oversight with the Service team to complete the standard tasks.
- Customers are starting to complain about things getting dropped or missed.
- No new talent is coming onto the account – you are seeing the same resources rotated to new positions but few new faces and fewer new ideas.
Sounds like things are getting a bit stale!
You have two choices:
- You can rely on the perceived value in the current contract and presume it outweighs the need to do anything other than continue with the status-quo. Doing nothing however could put you in a difficult predicament in a couple years when the contract comes to an end. The comfort you are feeling now may turn into a service rut.
- You can accept the fact that the Service needs your LEADERSHIP. Sure, you can modify the contract a bit and extend by a few years. Considering other business challenges, you might be thinking that this is all you are able to do. But sometimes, all you need is to THINK BIG.
How to Think Big
Innovation must be a part of your everyday thinking. If your Service Partner isn’t demonstrating a desire and the capability to deliver better Service today than yesterday, it is time for an intervention.
First, a Leadership check. Is the Service Leader demonstrating the behavior needed for a winning culture?
When leaders set the expectation for continuous improvement, the organization will follow. How about you, are you demonstrating interest in your Service partner’s performance? Do you come to meetings prepared, set stretching goals and enable your partner’s success?
Here is what I have found in successful business partnership that last beyond a single contract period:
- The Services are Green – no Watermelon effect!
- Annual strategy sessions and review of previous year performance that result in a Joint Business Plan (JBP) for growth in the coming year. (Subscribe and email me and I’ll send you a JBP template and instructions.)
- Contract incentives for bigger results adjusted regularly.
- Innovation initiatives are reviewed at a strategic level. Barriers for success are eliminated.
- Both parties keep an eye on the market and user trends. Each party brings a growth mindset to the partnership.
If you are delivering on leadership and have these four elements of success, you may need some fresh thinking to reinvigorate the partnership.
Consider a Leadership Retreat to ideate the next level of success.
Take several team members off site for a few days. Do some team building and creativity exercises. Stand 5 – 7 years in the future and describe what you see. Hire an external consultant to facilitate the session and challenge your thinking. Many times, you won’t realize the barriers to success you are accepting; a third party can help you.
Here are some examples of Service Partnerships that have lasted the test of time by delivering joint value:
Originally hired to perform compliance audit support, this firm demonstrated strong partnership behavior; their services grew as more business leaders realized their capability and value. Eventually, they engaged with the Product Supply Organization and developed a way to commercialize some P&G competency. After negotiating a revenue sharing model, this firm now delivers to P&G substantial revenue through the licensing of internally built capability.
Originally hired to perform industry standard services, this Partner helped P&G during a challenging period and drove year over year savings that surpassed the contract expectation. Eventually, this firm was delivering all P&G’s requirements for this service scope. Both companies got to work and created a program with three additional service areas that will bring new revenue to both companies over time. These new services would not have been created if the two companies were not dedicated to each other’s success.
How Big is your thinking?
What can you do to safeguard your Service partnership to last beyond a single contract period?
Check out Part 3 to learn why nurturing supplier relationships that deliver big results is a good investment of your time.
Please leave your comments and questions below.
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