Successful sourcing – Adding trust to the equation.
In the series of articles on ‘successful sourcing‘ this time an article about how trust as a basis for partnership is better than fear. In many sourcing agreements a great deal of attention is primarily paid to closing the contract. The resulting contract, typically, is full of KPIs and many and large accompanying SLAs, etc. Hours, days and even months are wasted to agree on the nitty gritty details.
Have you ever gone through your bi-weekly or monthly status meeting with your vendor and concluded that whatever they’re presenting does not reflect your actual feeling and interpretation of how the contract is progressing?
This can and must be done differently. What if you could let go of some of these fear-based control measures by adding trust to the equation?
The beginning of your partnership?
You are about to outsource the management of (part of) your infrastructure or application domain. You have spent the past few days, weeks, months (and sometimes years) on negotiations with one or more suppliers and now you are signing. A festive moment because all parties involved put a lot of energy into it and you have every confidence that your expectations will (eventually) be realized. You enter into a partnership!
To increase the chances of achieving all expectations, you have included several (granular) clauses in the agreement, multiple guidelines on how the contact will be regulated after deal-closure, multiple KPIs defined (for the supplier) to comply with this, expectations, a strong SLA and perhaps even additional control measures.
You say: “With all the control measures in the agreement I have every confidence!” And you sign the agreement. Congratulations!
The paradox in this, however, is that these unilateral measures (purely and solely aimed at the effectiveness of the supplier) do not lead to the desired result.
Successful sourcing – Trust as a basis for partnership!
The control measures are a logical consequence of fear and only serve to test the effectiveness of the supplier with the result that your partnership is more like a prison where you are both imprisoned.
To truly move into a partnership, you will also have to add ‘trust’ to the relationship above (or next to) ‘control’.
This argument is certainly not about the omission of certain control measures, Control measures do have added value, but it shouldn’t end there. The formal control measures will have to be in balance with relational measures (such as trust). A balance between affectivity and effectiveness, hence the goal of your outsourcing agreement has become ‘partnership’.
This also implies that you (as a customer) have some things to do. You can’t only finger point at your supplier if things don’t go as planned. For starters: you need to let go of some of your control measures by allowing to trust that the sole purpose of the agreement is to make it a success.
Some other actions you need to take:
- Have confidence that employees of the supplier and of your organization can contact each other at all levels to build a relationship and thereby find optimal solutions for daily problems. After all, trust leads to involvement (commitment).
- Have confidence that you can enter into an equal dialogue with each other about the expectations and benefits of the partnership for both the supplier and yourselves.
- Have confidence to give your employees the space to have informal contact with your supplier and vice versa.
You will find that adding attention to relational aspects results in that some of the formal aspects have become redundant and that you will have sooner and more result from your partnership. A nice side-effect: your talks with your supplier will be nicer and more relaxed. A study, conducted by one of our Full-Service Conductors, provides insight and a theoretical framework for the suggestions made in this article.
Looking for better talks with your suppliers?
Are you about to enter into a partnership and / or do you need support in balancing attention to formal and relational aspects in your current sourcing agreements? Our conductors are available to work with you to thrive!