Reinventing Organisations: looking at how we work with outsourced suppliers

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25November 2015
Katherine Woods

Katherine Woods

Partner
This post is authored by Katherine Woods, Partner. Full bio →
Katherine Woods

Creating a mutual relationship with outsourced suppliers

There has been a theme in the conversations I have had this week. The theme is about customers, outsourced suppliers and how we go about buying services into organisations. This has got me thinking about the the paradigms and pitfalls of B2B services buying that I have experienced as both customer and supplier.

Organisations place a big emphasis on the management of suppliers of raw goods and products. There is a clear link between these tangible suppliers and a company’s ability to deliver. However, I think there is a lot more ambiguity in the area of services buying and I see the need to shift, as organisations evolve into new ways of working.

Trends in the workplace

It is common practice in most organisations to keep employed staff to a minimum. This keeps overheads down and keeps in-house focus on the core business of the organisation.  This approach, when coupled with the buying of services such as temps, interims, contractors and specialist services, like marketing and consultancy, can give a great deal of flexibility. This flexibility allows organisational constructs that can flex with the changing world. However, it requires a sound approach to buying services.

Alongside this shift in organisations, I see a shift in people wanting to work in different ways. The trends I see are people wanting to work on things they find meaningful; portfolios of interest; more flexibility in how they work, their hours and places of work; more independence. This has lead to a huge increase in the amount of people in the UK who are self-employed or running small businesses.

When I combine these two trends, it makes me wonder about how relevant the institution of employment is nowadays, but I expect it will stay with us for many decades to come because it is such an effective tax collection method.

The current reality

In the mean time, the business world needs to ‘up its game’ with respect to services buying. The old-style of master-servant / customer-supplier is not serving anyone well. Here are some of the sound bites I have heard recently.

I have heard customers talking about experiences with outsourced suppliers:

‘I don’t trust externals.’

‘The consultant turned up late for the call and then insinuated that it was my fault. His proposal arrived late and didn’t include the information I asked for. I went back to him for further clarification and still haven’t heard back. Needless to say, I won’t be working with him.’

‘I contacted three suppliers, one wouldn’t get on a train to meet me and one didn’t show up, which didn’t leave me with much choice!’

‘I don’t trust consultants, they are too conceptual, and don’t understand the real world.’

I am hearing outsourced suppliers talking about experiences with customers.

‘We arrived early for a one hour meeting, we were taken into the meeting 10m minutes late, and told they only had 20 minutes. They then barraged us with their requirements. It felt like being bullied.’

‘I went to see the client for half a day, and then spent ages writing their proposal and now they won’t even return my calls – that’s just rude!’

‘My client is trying to persuade me to do the work for free, even though I know the people involved in this work don’t have the potential to buy my services afterwards.’

Clearly this process isn’t working for many people involved!

Root causes and way forward

I think many of the problems that occur in the buying process stem from a lack of recognition that buying is all about people.  In the B2B buying world customers are PEOPLE who work for their organisation and suppliers are PEOPLE who work for a different organisation. As soon as we put labels onto people e.g. customer, supplier, external, service provider, consultant, it is easy to forget that actually they are people and, in my opinion, people deserve to be treated with trust and respect (until proven otherwise).

My last corporate job was with Mars in the mid 1990’s. One of the things that drew me to Mars was their principles, particularly the Mutuality principle (Mars definition of Mutuality: A mutual benefit is a shared benefit, a shared benefit will endure). At that time in Mars, this principle was core to the way suppliers were managed. Seeing the benefits of this has strongly influenced my views about how I conduct myself in business.

If we hold a mutual mindset as we consider the buying process, then both customers and suppliers need to take responsibility for engaging in the process in a way that is mutual. Speaking from my own experience, this means things like:

As a customer:

  • I will make time to understand the supplier organisation and their needs, in order to do a good job for me. This involves making time for dialogue and conversation, to develop mutual understanding.
  • I will be clear about my requirements and my approach to decision making e.g. being transparent about how many options I am looking at, the criteria I am basing a decision on and the timeframes / people involved in making the decision.
  • I will take time to give considered, constructive feedback to the suppliers I choose not to work with and to those I am working with, to improve the quality of our work together.

As an outsourced supplier:

  • I will make time to truly understand my customer’s needs and be willing to walk away or refer, if I don’t think we can deliver what they need.
  • I will aim to exceed expectation and, as a minimum, deliver what I promise, on time.
  • I will give considered, constructive feedback to my client to either improve the way we work together, or to explain why we no longer want to work with them.

The war for talent has driven a shift towards a mutual approach to recruiting people into organisations. The more enlightened companies aim for all applicants for jobs to leave the process positively disposed towards the company and, ideally, advocates of the organisation. I see a need for this shift in the services buying area as well.

I see the world of employment and outsourced services evolving. Employment no longer means a job for life. There is a big shift towards people moving to different forms of self-employment. Most of us will find us as both customers and suppliers at some points in our careers. I have noticed that most of the meetings I facilitate at the moment include a mix of employees, interims and consultants. Whichever role you find yourself in, as a services buyer or a service provider, think about how you could improve your working relationship by making it more mutual.

If you would like some help with mutual engagement with your outsourced suppliers, Meeting Magic facilitates partnership meetings between customers and suppliers who want to genuinely collaborate in a mutual way. By all means get in touch if you would like our support. Call us on +44 (0)1628 471 114 or tell us about your supplier services conversations via our contact form. We’ll get right back to you.

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