Effective Contracting With Suppliers For The Business Critical Services They Provide

Effective contracting with suppliers for the services they provide, whether its Business Process Outsourcing, IT Infrastructure or other critical Supply Chain Requirements, is an increasingly high profile topic and a recent HBR blog From BP to Boeing, Supplier Safety Is the CEO's Problem provided the following insight

The current front-page sub-contractor controversies surrounding BP's liability for the gulf explosion and Boeing's grounding of its 787 Dreamliner should not obscure an ultimate take-away for corporate leaders: companies must take operational responsibility for ensuring that products and services provided to them by third party suppliers are safe, effective and of high quality.

This point was underscored by Exxon Mobile CEO Rex Tillerson in his testimony before the National Commission on the BP Deepwater Horizon Oil Spill. Following its issues with the Exxon-Valdez tanker spill, Exxon Mobile has the reputation for developing the best safety culture relating to oil and gas operations through what it calls the Operations Integrity Management System (OIMS). Said Tillerson: "And I want to stress that the contractors that we work with are embedded within our OIMS processes as well. We expect our contractors to be as knowledgeable and conversant with our OIMS processes as our own employees. Not every company has this expectation, but we have found that when everyone in the workplace speaks the same language of safety — employees and contractors alike — everyone can work collaboratively, safely and effectively."

The application of the word Integrity to operations management is an interesting one, as when it comes to the effective working together of employees and contractors the application of Integrity from a mindset and behavioural point of view becomes equally, if not more important. 

The conversations FranklinCovey has with organisations looking to address this issue reflects the reality that there are often 1000s of daily interactions between employees and contractors and each of these provides a 'moment of choice' in terms of how they behave or how they respond when faced with anticipated or unanticipated events. In this context, codifying the characteristics of integrity and collaboration and making them accessible so that workers can share a common mindset and language on these critical elements can be as important as the contractual fine print of large supplier agreements.