Trust or Suspicion?
Friday, July 16, 2010
Alex Blues, Head of IT Sourcing at PA Consulting Group continues his exploration of the ‘critical intangibles’ that can make or break an outsourcing relationship.
Throughout the next few weeks of this regular blog, I will be continuing to consider ‘critical intangibles’ in further detail. Those things that I believe can make the difference between success and failure in a sourcing relationship. Those details that may be overlooked by those only concerned with the pricing and the legal framework of a sourcing relationship.
Last week, I talked about the difference between a ‘co-operative’ and a ‘competitive’ approach to sourcing’. This week I would like to consider the difference between ‘trust’ and ‘suspicion’ as the basis for a working, sourcing relationship.
In fact, both attitudes - trust and suspicion - work at a corporate and at an individual level. However, mixing the two styles at either level can be disastrous.
Some organisations and people believe that the world is out to get them - typically characterised by strong rules and governance and an underlying philosophy that self interest is at the core of all actions. In situations like this, the contract never gathers dust - it is always being brandished and penalties are being considered or demanded.
Others believe that you can agree a set of outcomes and ‘trust’ both parties to achieve these results - in these cases the approach is typically underpinned by lighter governance and outcome-based rewards rather than contractual penalties, like service credits.
Once you have considered and accepted this, there is then the appreciation that suppliers and the contracting organisation fall into one or other camp - even though some may sit in the middle and some at the extremes of the trust or suspicion spectrum, they do all fit into this somewhere.
So, the key critical learning from this is to be honest about your own style corporately and individually, and to make sure that you only work with the supplier or organisation that matches the same style as your own.
If you take the time to assess these ‘critical intangible’ factors at the outset you could be making the difference between a successful and a failed sourcing relationship - it’s not just about finances and contractual terms.