Relationship Counselling

12 January 2018

Today, I’ll mostly be calling myself a relationship counsellor. I’m not sure if it’s the time of year, but I seem to be spending more and more of my time resolving Client / Supplier, or Supplier / Vendor, relationship problems which for whatever reasons have bubbled to the fore more than expected in the recent “season to be jolly”.

One of the most painful situations that we have found ourselves in recently in was for a procurement of some IT services on behalf of a midmarket client, who was seeking a refresh of their IT estate. This has been a 2 month project, where the client asked us to specify the service, go to market, down-select and vet a few suppliers then help them with the award process. Easy peasy – or so we thought.

The easy bit was understanding what they needed, and finding suppliers to engage. It was also easy to assess and recommend a preferred supplier based on their proposals. Dream project. And then comes the contracts…..

The clients in-house lawyer was new, very very diligent and not massively experienced in the nuances of technology contracts. The suppliers default contract was really designed to articulate technical service offerings and not massively legally tight. This was the start of the problem. Client marked-up the contract with no sympathy for the red cartridge of the printer, it was a “loose wording” massacre, which meant the returned contract had changes on most lines of the 20 page terms. The supplier took it personally, and decided to start to dig their heels in.

At the point at which the real material changes needed to be discussed, such as termination approach and payment terms, the supplier was in no mood to review. Emotions were running high, with both sides digging trenches and stocking grenades to throw at each other. It had all the potential to end in failure, based entirely on wounded ego’s rather than problematic facts.

And here in lies the value of an independent consultant, to “broker” the appropriate deal. Able to step away from the emotions, we peeled back some of the details and netted out the negotiating positions. When looking at it purely commercially, the difference in position between Client and Supplier was less than 1% of the contract value, which both Client and Supplier had the ability to support if needed. Because the pure emotional side had kicked in, both parties were preparing to walk away and start again, the cost of which would have been ten times that commercial impact for the Client, and the loss of the profit on the other 99% of the revenue to the Supplier. Utterly bonkers.

I am no lawyer, I’m a pragmatist. I fully accept that the legal terms on which a deal must be done should be clearly documented, but there is a balance to be struck between getting the words right and getting the deal done. That balance can most effectively be struck by using an independent third party to see the reality of the situation, and maintaining a focus on the objectives of the project, which were in this case to improve the clients IT to support their business goals. It’s our job to make sure both parties “win” to the benefit of this objective.

Our approach in this regard is simple, and there are no comfy couches involved. Because we understand both sides of the argument, we effectively interpret and articulate the reason why each side is taking a specific position to identify a positive way forward in support of the project objective. Fundamentally, the Client/Supplier relationship is likely to be a long term one – which usually starts with a contract negotiation, and the nastier that negotiation gets the more likely the longer term relationship is to fail. Using a third party to help set up the relationship makes for a better foundation for the long term.

So the question is, should we change the Embedded brand to something more akin with a relationship counsellor? What about:

- RelaITe

- Technology Cuddles R US?

Happy to take suggestions in the comments…..

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