Today’s businesses and business leaders face unprecedented complexity in their efforts to drive innovative growth within an ever-changing market and environment.
On the employee side of their business, successful leaders must build loyal relationships with their multigenerational and multicultural employees who have greater reward, recognition, and support expectations. On the development and delivery side of their business, successful leaders (and teams) must build dependable relationships with their ever-expanding and complicated supplier partners. To accomplish all of this, open, honest, and mutually beneficial collaboration is more important than ever.
While this may all sound very complex, there is something every leader (and team) can take some relief from. When it comes to collaboration excellence, the approach that works when building employee relationships and an inspired team culture often has a strong cross-over with the skills needed to build successful supplier relationships. So, procurement leaders, employees, and suppliers can enjoy and build upon this familiarity.
But before we discuss how to build strong collaborative relationships, whether with employees or suppliers, let’s take a quick look at our not-too-distant past when collaborative efforts failed – so we can learn from them and try not to let history repeat itself.
Looking and Learning Back
Looking back to the 1990s and early 2000s, we could informally define too many purchaser/supplier relationships as ‘give and take’. In fact, the word relationship might best be left out of any description. Often, the focus of virtually every purchaser focused squarely on lowering costs, often sacrificing loyalty and shared understanding of each other’s goals.
As is well documented in the auto industry, while there may have been value in the very short term, this strategy often led to unreliable products and services, supply and delivery issues, low customer service and a spike in unproductive downtime. Furthermore, the lack of a trusting, collaborative, mutually beneficial partnership (where ideas are discussed, and innovation is financed) often meant purchasers found themselves spending valuable time and financial resources having to secure and build new supplier relationships when existing partnerships collapsed or lagged.
We can all imagine the frustration, disappointment, and losses that resulted in the example above. Sadly, a similar loyalty pandemic also happened between employers and employees, and we are still trying to recover from it today.
Learning Forward and Improved Supplier Collaboration
Fast-forward to today and we can find many examples of successful collaborative partnerships built on trust, respect, transparency, and accountability. And, whether they are between team members and departments or customers and suppliers, successful collaboration never happens by accident.
As Perry Arzumanian, Director of Strategic Sourcing at OECM, a not-for-profit collaborative sourcing partner for Ontario’s Education, Municipal, and Broader Public Sector customers, notes, “At the beginning of every new supplier relationship, we prioritize establishing a shared understanding of goals and fostering a partnership built on trust and respect. By aligning on each other’s abilities, culture, and needs, we achieve the best solutions and highest quality, at the best value – for everyone.”
While we know improved supplier collaboration is a win-win, making it happen takes never-ending investment. In addition, needs, solutions, and quality are not a one-and-done scenario. Needs change, solutions evolve, and sometimes quality doesn’t move in the preferred direction which requires quick, respectful accountability. And of course, cost is always evaluated.
This is where organizations like OECM are a great asset. Their full-time responsibility is to work seamlessly with customers and suppliers to:
- Identify key supply chain partners based on strategic importance and need.
- Build a foundation of trust, respect, shared expectations, and accountability to support each other’s best interests.
- Share experience through open dialogue, often by creating cross-functional teams to explore areas such as needs, opportunities, quality, cost, delivery, and innovation.
- Facilitate introductions between all parties who may use or influence the product/service in any way.
As an example of continued investment in collaboration and the value of strengthening relationships with a supplier partner community, in 2022, OECM established the Supplier Partner Council (SPC). This formal committee comprises twelve diverse supplier members who serve as a direct conduit for communication and engagement between OECM and its supplier community.
Each SPC member brings unique perspectives shaped by their industry and the size of their business. These diverse voices provide valuable insights into emerging trends and critical issues within the public sector procurement landscape. By fostering open dialogue and sharing knowledge, SPC members and OECM work collaboratively to develop and implement strategic initiatives that enhance their shared value proposition for customers, addressing challenges and supporting mutual growth.
Simple Steps for Stronger Supplier Collaborations
Let’s be clear: Even if you are working with a collaborative sourcing partner, it’s in your best interest to see yourself as a collaborator/contributor when building strong supplier relationships. You want to be able to express your present needs and help define future solutions.
Building a collaborative relationship takes planning, dedication, hard work, and lots of patience to develop these skills within yourself, among your team, and with any supplier or external business partner. So, how can you build trusting supplier relationships that will last? Here are 10 tips to help you build collaborative team cultures and strengthened supplier relationships:
1. Discuss and agree to team and/or project goals
2. Establish collaboration, innovation and change as shared values
3. Discuss communication guidelines and expectations including:
- Why and how to manage accountability and difficult conversations
- Everyone has a voice – encourage open communication
- Respecting different ideas but not different truths
- Agreeing to share resources
- Meeting minutes and documentation management
4. Commit to revisiting your purpose and guidelines often
5. Inspire and empower your team (lead by example)
6. Create opportunities to bond
7. Everyone must be clear on contractual obligations
8. Be wary and selective of scope creep
9. Celebrate successes and share setbacks equally
10. Accept practice makes perfect, and nobody will be perfect
Conclusion
Businesses are increasingly relying on their suppliers to reduce costs and improve quality, but in our complex and ever-changing global market, purchasers need help to evaluate which companies, products, and even services are safe and ethically supported, not just dependable and cost-effective.
As supply chains grow more complex, supplier collaboration will be essential for organizations aiming to prioritize operational excellence while supporting closer ties with employees and customers.
Communication and strong, compassionate leadership are key to building a more trustworthy and resilient collaboration process and solid supplier relationships. Successful relationships are not easy. They are built on clear goals, inspiring communication, and respectful accountability. Tough love and difficult conversations sometimes need to be had. But this doesn’t mean disrespect and doesn’t always mean termination of contract… sometimes it just means a course correction.
Contributed by Bruce Mayhew. A keynote speaker, communication skills trainer, and executive coach, Mayhew specializes in soft skills topics like leadership and new leadership development, generational differences, difficult conversations, change management, time management and email etiquette. Learn more at www.brucemayhewconsulting.com.
This article was published in the February 2025 issue of the Ontario Public Buyers Association (OPBA) Caveat Emptor E-News.
