Global Mobility: Trusting your supplier’s word
Whether used as a noun or verb, the word “trust” implies truth, reliability, ability, and strength.
To say “Trust is earned” is certainly appropriate in many circumstances. In business, though, a partnership must begin from a position of trust if it has any chance to succeed. Why then do so many partnerships dissolve because the client has lost faith in the service provider?
Promises are made by relocation management companies (RMCs) or other suppliers during the selection phase, and repeated several times during negotiations and implementation. There shouldn’t be any reason to question their word, provided, of course, that truth, reliability, ability and strength were behind their statements in the first place.
When outsourcing was originally embraced, part of the appeal was the comfort of passing the administration of the relocation program on to a highly specialized team that would provide efficient and reliable service to transferees, allowing the client to focus on its core operations. The outsourcing model has evolved over time and we are seeing an increasing number of instances of questionable actions by RMCs and other suppliers, leading clients to lose faith and rethink the administration of their program. Deteriorating service, incorrect application of tariffs, inflated fees or other costs, etc. are transgressions that damage a client’s trust in the service provider.
How does an organization find itself in a partnership it doesn’t fully trust?
a) If trust falters in the early stages of the partnership, there is a strong possibility that the selection process was flawed. Was the supplier chosen through a formal Request for Proposal (RFP) process? If so, how clear was the statement of work, were the right questions asked, were references checked? It is through the RFP process that bidders demonstrate to the client that they are highly capable, honest and reliable. A well-run and comprehensive RFP process will weed out the less promising candidates and result in the selection of a partner fully aligned with the client.
The next step is to ensure that mechanisms are implemented to minimize and manage any possible breakdown of that trust. In other words, launch with confidence, but make sure you are the driver with a clear contract, detailed service level agreements, regular reporting, and frequent communication. Monitoring and control benefits both parties, keeping everyone on their toes and preventing issues from escalating.
b) If a partnership is slowly deteriorating, or has derailed after a period of stability, it is likely that the monitoring/control mechanisms noted above are not running effectively. When all is going well, complacency can set in leading to carelessness, but it can also open the door to more intentionally deceitful activities. An exhaustive audit of invoices can be quite revealing, often leading to savings from incorrectly charged fees, as well as the identification of inadequate processes.
The fallout from a contractual breach can be devastating to the client’s relationship with transferees, the success of its operations, as well as its standing in the industry. And setting aside ethics, most service providers are well aware that honesty and reliability are good for business. The cost of losing credibility in the industry can be high (e.g., loss of clients and revenue, more frequent and costly preparation of proposals, fewer references for new business and higher staff turnover). Slips can be forgiven, but only so many times, and once trust is lost, it is a long, long road back. Despite this understanding, human nature is such that checks and balances are required.
When considering supplier arrangements, the time and effort invested in a detailed and in-depth RFP process that also ensures the implementation of monitoring/control measures pays off in significantly increasing the chances that the resulting partnership will be a lasting one.