Top tips to keep your partner relationship healthy

Being sold the dream and then living the nightmare is a scenario that is an all too common scenario when it comes to large contracts in the service sector.

A supplier’s failure to deliver on promises made doesn’t just place a huge and unnecessary strain on partner relations, it can also have dire consequences on a client’s business and customers. Ensuring problems are identified and resolved at the earliest opportunity will prevent them escalating into protracted negotiations that take their toll on the parties involved both mentally and financially.

Below are our Top 5 contributors to an unhealthy relationship, along with our tips on avoiding them in your business:

Supplier created:

1. Failing to fully quantify the costs required to deliver the service proposition, resulting in a sub-margin or unprofitable account
2. Selling a service solution that they are not capable or competent to deliver
3. Poor transition preparation, which results in service failures early on in the relationship which are difficult to recover from
4. Cultural misalignment between the key stakeholders appointed to run the service with those they are marking Client side
5. Accepting Contract clauses that are unworkable or undeliverable from the outset

Client created:

1. Failing to provide the level of detail required to enable the Supplier to cost the proposal accurately
2. Using templates throughout the procurement process that aren’t aligned with the business’ actual requirements
3. Using brand appeal to strike a deal that isn’t profitable for the supplier and knowing this
4. Agreeing the service solution contractually at the outset but demanding something else during the contract period outside of a formal change control process/negotiation
5. Creating bias in the measurement of supplier results versus captive or third-party supplier results

Below are out five top tips to help prevent a deterioration in the partner relationship when a dispute arises, which may or may not occur as a result of some the issues above. These tips apply equally to all key stakeholders in the relationship:

1. Identify that there is an issue and formalise it quickly. It is important not to suffer-in-silence, or hope that things will improve without intervention. Good relationship management depends on clear and open communication.
2. Listen fully to the views of the person responding to the issue. It is often the case that problems occur as a result of misunderstanding or misinterpretation. Listening properly and/or asking the relevant stakeholder to provide a written summary of their views of the issue will help in reaching a mutually agreeable resolution.
3. Be reasonable and open to change. Issues occur, people make mistakes, contracts aren’t always workable despite the best intentions of all parties at the outset. Compromising to find a solution that doesn’t cripple the other party financially or otherwise is very important to prevent relationship breakdown, or worse, legal intervention.
4. Do the detail! Making assumptions or just repeating what someone else has told you can result in irreparable damage to a relationship. Taking time to fully understand the important details will help to prevent this.
5. Agree a communication framework, and agree key requirements for reporting at the outset, and ensure that this is documented and remains active throughout the contract period. This framework should go further than just detailing when review meetings will take place; it will also cover the style of communication and the expectation of both parties around the critical elements of communication that enable complete trust.

There are other factors that can occur and impact a business relationship that aren’t always foreseen. For example, a Vendor Manager may change resulting in a different set of expectations and requirements. Personality clashes can occur that impact a business relationship and these should be resolved quickly, changing key stakeholders to resolve issues where that enables a return to the status quo. There is no point trying to push water uphill, and where a relationship remains broken despite the best efforts of both parties, the resolution may be to part ways.

There is no denying the costs involved in procuring new service contracts, many of which remain hidden and/or only become apparent after the change has been made. Supplier changes that cannot be fully justified with both qualitative and quantitative information should proceed with extreme caution; particularly when they are based on relationship issues. It is very possible that those issues will re-occur with a new supplier but only after a huge amount of cost has been expended!

4T4 Consult provide expert guidance to organisations suffering from business relationship issues. Don’t hesitate to get in touch for a discussion about business relationship training, partner sourcing, and/or developing a communication framework based on contractual obligations that enables the relationship to flourish.