The Director's Cut: Clashing with suppliers

Television audiences can't get enough 'real life' programmes thrown at them. Anything with conflict goes down particularly well. We have 'Car Wars' and 'Neighbours at war'. It will just be a matter of time before we have 'IT Supplier Wars'.

As the potential areas for conflict, disputes and publicity soars, huge investments in time, money and resource are being focused on such relationship issues.

This depressing situation can be avoided, not just by avoiding such fallouts, which have been well covered in this column before, but after the disagreements, conflicts and threats begin.

And we’re in this together – it’s no good just blaming the supplier. As IT leaders we need to take our share of responsibility or we will simply scare off the suppliers whose help we need.

IT leaders and their suppliers have three alternatives to battle stations, expensive legal fees and avoiding the road of no return.

Mediation

The aim of mediation is for both parties involved to reach a mutually agreed, constructive outcome, facilitated by an independent facilitator.

The main advantages of mediation are:

- Everyone agrees to try to reach such an outcome, which is positive in itself
- Outcomes are likely to be bought in by all
- The process often brings to the surface deeper issues that may not otherwise be identified

Mediation involves some risk and investment:

- It is time-consuming, taking you away from core issues
- The process depends on a degree of trust which may not be present
- The mediator must be an independent third party – good people are not cheap

Arbitration

Perhaps mediation has failed. The parties cannot afford the time or the issues concerned need to be resolved quickly.

The aim of arbitration is for an independent third party to look at the issues and facts and listen to both parties, to make a decision that is binding on everyone involved.

This approach is often faster than mediation, is far more cut and dried than mediation, and parties involved often open up more when talking in private with a trained arbiter. The big danger with such an approach is achieving a true and lasting win-win.

Arbitration is far preferable to court, provided everyone is sure it is the right issues that are being resolved.

Separation

I have often likened customer/supplier relationships to marriage. Entered into freely by two parties, success depends on compatibility, commitment and total trust.

It disturbs me that many customers and suppliers do not sign contracts, in which case they are just living together. Nothing wrong with that in itself but there will be far less incentive and legal obligation to resolve disputes.

Sometimes customers and suppliers cannot resolve their differences. No amount of talking, listening and independent help can take them forward.

In this case separation may be the answer. Some companies simply cannot work together and admitting this will avoid future hassle and problems.

Whatever you decide, always try to see things from each other’s point of view, demonstrate total business acumen throughout and keep all issues in perspective.

David's second book, The Naked Leader Experience, is published on 1 April 2004.