“The only thing worse than being blind is having sight but no vision.” Helen Keller
This is Part 3 of a Three Part Series – Nurturing Supplier Relationships
Supplier relationships can be a lot like marriage. Few will argue that if lying, cheating and desertion are part of the deal you are heading to divorce court.
Leaving the romantic aspects of marriage out of this discussion, keeping a good partnership fresh and alive takes work. Some partnerships stand the test of time others are rocky from the start.
So, why do some partnerships fail and others last for years, successfully continuing from one contract period to the next?
So, you’ve decided to get engaged
When selecting a partner, you are evaluating supplier capability to meet your requirements: does the supplier have the right technical competency, the capacity to take on the work, a successful track record, proper financial proposal?
Are you also evaluating some of the qualitative aspects of a good partnership: the management approach and business structure, strategic direction, risk exposure, relationship with current and past clients, research and innovation investment and ability to execute with excellence?
Congratulations on your First Anniversary
Presuming you have done a good job selecting your mate and are headed down the contract aisle, the first year will be rocky! You are learning how to work together and every action will be one that either builds up or breaks down trust.
Trust is the belief that those on whom we depend will consistently meet our expectations.
Here are behaviors that build trust:
- Open communication and respect
- Commit and deliver on time
- Being honest and acknowledging mistakes
- Holding reasonable expectations
Are you as the Client or Service Partner approaching your interactions in a way that builds trust?
Or are you exhibiting some of the following:
- Blaming the other Party
- Failing to do what you say you will
- Revisiting the same issues and concerns in every meeting
- Reacting versus acting with the end in mind
- Failing to comply with basic expectations
To achieve what we want from a business deal, especially a Service engagement, we need to recognize the human element that goes into delivering the result. Traditional relationships are based solely on what the supplier is delivering to the client and are often win-lose.
If you are on the losing side of that deal, you will be looking for the quick exit and ensuring you minimize your losses.
The long-term partnership
Supplier Relationships, like good marriage, take time and commitment. A strategic partnership, where the intent is to grow the Revenue Pie bigger for both parties, means that the stakes for success are much higher. Heading to divorce court will be painful and expensive.
Consider the cost of the following for your business:
- Quality impact resulting from employees who are disengaged.
- Lost time associated with qualifying a replacement supplier.
- Lost time associated with learning how to work with the new supplier.
- Impact on ability to progress the business during the limbo period of partnership dissolution.
- Time taken away from other pressing priorities.
- Legal costs
- Not to mention the pain to the ‘innocent children’ involved.
A lot of people ask me how short I am. Since my last divorce, I’m about $100,000 short.
– Mickey Rooney
Consider too, situations where perhaps the supplier isn’t that bad after all – but you only realize it after divorce.
I was speaking with a colleague who told me about her remarriage to a supplier we realized we could not live without.
Imagine the scene. Supplier is having a difficult time producing product X, Manufacturing Plant is unable to meet shipment expectations, the daily problem resolution calls begin and promises are missed. Even though the supplier really wanted to ship the material on time and to specification, it was, well, COMPLICATED.
Fast forward to escalation to senior management when both businesses are under pressure. You know the story – and it didn’t end well.
Purchases saves the day by finding an alternate supplier yet there is still no reliable supply of material X, because it was, well, COMPLICATED. And in this case, the new supplier aims to minimize his losses and stops production.
So, we go back to our first love and say,“Please take me back, I can’t live without you.”
Making the Love Last
When coaching new buyers on the importance of contracts, my students learn that a good contract helps the parties separate equitably and amiably in case of divorce. I also coach that the more you talk through the potential pain of contract dissolution, the more obvious the value of working with your supplier partner to make the relationship last.
Here are some simple guidelines:
- Be open and honest, no hidden agendas.
- Be open minded and seek to understand your partner before speaking.
- Consider barriers to success on both the Service Partner and Client side
- Look for mutual benefit.
- And Listen again
Like any successful marriage, a partnership that has on-going value to both parties is built on a foundation of individuals doing their best every day.
For Service Partners, the client expects you to be the expert in your service offering, to stay ahead of competition and bring continuous improvement and breakthrough thinking to your client. Don’t let me find out you’ve been cheating on me and giving better service, better pricing or better innovation to someone else!
For Clients, think about how you enable the success of your partner – opening doors, offer opportunity for growth, break down company barriers to supplier success. Don’t just be the Client that every supplier wants to date – be the Client with the partner who promises to be there in sickness and in health, for better or for worse, until death do us part. And we we aim for business immortality!
I’d love to hear from you! Do you have a mutually beneficial partnership or do you have a horror story to share?
I want to learn from you so talk to me.
And if you missed the other parts of this series, here are your links back: