Suppliers: You can’t control their salary but you change the way they work
April 7, 2017
Darragh Toolan
2 minutes

The Harvard Business Review is a bastion of knowledge for those of us working in the corporate space. I like to read it because it makes me sounds smarter in meetings. Sometimes I tell people “I read this in the HBR,” but sometimes I pretend they are my ideas and people seem to be impressed.

Anyway, today I will be up front with you all. The ideas that support the article come from this article I read earlier in the week.

The article addresses collaboration, which is something we talk about a lot at Old St Labs, but the boffins at HBR focus on internal ‘cross-silo’ collaboration. I’ve taken a bit of slant here to re-focus the discussion towards the realm of supplier collaboration. At a high level, the article suggests the following points for “tackling collaboration in a constrained setting.”

At a high level, the article suggests the following points for “tackling collaboration in a constrained setting.”

  • Pick your battles carefully – Find a ‘coalition of the willing’ and tackle the projects with the biggest potential impact from collaborative work.
  • Convince with quantitative evidence – The old measure to manage adage rings true again here.
  • Drive down collaboration costs – Use tools and technology to support and drive your efforts many of these are freely available.
  • Harness the power of competition – By publicising the success of collaboratively projects you are more likely to get buy-in on future projects.
  • Get benefits flowing faster – Make sure employees are recognized for their work immediately.

They are all good points don’t you think? I do. But I am going to call out the HBR here. This article is titled ‘How to Get People to Collaborate When You Don’t Control Their Salary.’ The points above are good, but I don’t think they are going to motivate someone to alter the way they work. Human beings are notoriously reluctant to change, and I’m not confident that the approaches above are significant to encourage the necessary action from staff members.

It’s true that easiest way to get people to behave how you want them to is to incentivize the kind of behavior you’d like to see. For a child, this may be the lure of a new toy, but for an employee, it tends to come in the form of a performance bonus or a potential promotion. This clearly presents an issue when it comes to getting your suppliers to work in a different way. You don’t and can’t control their salary or their performance bonus. So how do you get them to change?

You may not have the ability to impact their take home pay directly, but you can help them achieve their goals while at the same time achieving your objectives. In the book ‘Getting to We’ a bible of sorts for collaborative supplier relationships, Kate Vitasek lays out the argument for creating a ‘statement of intent’ between buying organisations and suppliers. This statement sets out the rules and guidelines for a successful collaboration and shows what both parties need to achieve for the relationship to be considered a success.

Once the two organsiations have determined how the relationship will function and the shared goals and objectives are defined, individuals within the relationship should be coached as to how their skills and experiences can be leveraged to make the relationship a success. For a collaborative supplier relationship to be truely successful, these relationship goals should be cascaded into individuals performance objectives.

So while you may not directly control the salary and bonus structure of your supplier’s employees, by establishing some guiding principals at the start of your supplier engagement, you can indirectly impact the way these employees are measured. Implementing these steps can help you to achieve the sorts of behaviors you’d like to see from your suppliers.

Head of Global Solutions @ Vizibl
One platform. Every device. All your commercial relationships.
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