Managing Vendors – Articles by Jim Everett

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Mindsets and Business – Part 1

Posted on | August 27, 2010 | CLICK HERE TO COMMENT OR ASK QUESTION

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In this post we take a first look at mindsets in client-vendor relationships, some of the different bases for these, some real-life examples of issues that arise, and what possible remedies there may be.

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Quick definition of a mindset

Mindsets are how we see the world, how business runs, and how things need to be done. Many things make up mindsets. Here are just a few examples that are relevant to any discussion about workplace issues. There are personal mindsets, professional mindsets, generational (age) mindsets, cultural mindsets, industry mindsets, and company mindsets.

It is natural to assume that our own view of the world, how we deal with people, and how things should be done, is valid, correct and appropriate. And we tend to expect that others  share this (usually more than they really do), or at least will fall in line with ours, with a few minor concessions to obvious differences.

In future posts on this topic, I will delve more into what creates mindsets, various elements and dimensions, and what that looks like as behaviors on the job.

Why mindsets are powerful and important

Understanding the effect of mismatched or different mindsets – one’s own and those of the other organization – is crucial in managing client vendor business, communications, expectations, assumptions and relationships, and (importantly) how projects are structured and work gets done.

Responses are driven by mindsets and as much as any given situation. Responses are measured against expectations which, in the absence of clearly documented agreements and assumptions, are formed against a specific mindset.

Here are some real examples drawn from my work with clients. The first two companies (clients) are large, established corporations, with long term tenure of employees. The third is a smaller, high profile technology company, with more frequent employee turnover.

Example 1.
Vendor takes control, not the client

The first is an IT Department in a Fortune 500 company. They have outsourced Applications Development to a large and established, US-based provider. They now find themselves being driven by the vendor’s methodology and process, and feel that the tail is wagging the dog. The client comment is “They (the vendor) just don’t think like us, and claim that their methodology is proven in the industry. They just won’t do things our way.”

When we started uncovering layers and looking at the history of that engagement, it became clear that the SLAs (Service Level Agreements) had been loosely written, with tacit assumptions that “Of course the vendor will do things our way. Look who we are – we are a star!”

The client then explained that in their company culture, things did not need documentation, since everyone knew what was expected of them, as part of “the company way”, and that employees would be willing to “throw themselves under the company train” if asked.

They explained that their way of doing things was to dive in, then adapt as they went along, fixing problems and changing processes as required, with a shared understanding of what was needed. This was their mindset, and it did not occur to them that the vendor would have a different mindset, and that this would clash.

The vendor mindset was, “Look who WE are. We have our own solid, proven methodology and way of doing things. It is what we do, and it has always worked. That is why your company engaged us. If you wanted things otherwise, it should have been set out in the SLAs.” In this situation, the vendor had much more experience with large clients than the client had with large vendors, and the vendor took the upper hand.

So this is an example of how an established company mindset, and failure to recognize that a vendor may have an equally entrenched mindset, can lead a client into using loose SLAs and no articulated assumptions before the project agreement is signed off.

Since the project is already underway, one solution is to go back to the negotiating table and try to get tighter SLAs in place, with more scope for influencing, and explore how both parties can achieve what they want. The client also needed to do a change of mindset to build in more process planning, and less reliance on “fix as we go along”.

Example 2.
Client frustration: “My team of once helpful colleagues were outsourced, and now they are back as contractors and are uncooperative.”

In a very large and profitable company, with a depth of experience in outsourcing, a database operations function was outsourced to a major outsourcing vendor. The employees in the client company were laid off, immediately hired by the vendor, and deployed as contractors back to the client project. The outsourcing deal (which in this case was thoroughly negotiated, planned and documented) included facilities colocation and, ironically, the vendor contractors were located back in the same area they had worked as employees.

The day-to-day way of working that had prevailed in the client IT group was one of collaboration and mutual support. If you needed something, you could go to one of your colleagues, and they would pitch in and help you as required. This became the approach that people took for granted. It was assumed that this was normal, and why would you do it any other way. In other words, a mindset.

The former employees more readily made the shift to the contract-driven mindset of their new employer (the vendor), and perhaps embraced it zealously while they were learning how much leeway they had. Those remaining as employees of the client were still struggling with the same mindset they always had.

During my work with the client, one of the project managers pulled me aside into his office and asked what was going on. “When we were all part of the same company, I could just walk down the hall and ask one of my colleagues a question or to help me with an issue. Now they are back, sitting at their old desks, and when I ask for something, they tell me I will need to have a change order. That is just BS! What can I do?”

For this transition to have been more effective, the project managers within the client who would be managing the vendors needed to be briefed and trained on the new way of working, why it was so, and how they should work at building new forms of relationships under the terms of the agreement.

Example 3.
Client manager asks, “What penalties can I impose to force the vendor to comply?”

One US-based technology client had a problem of a combative relationship between a local manager in another country and culture, and a vendor agent in yet another country. The country in which the client manager worked had a strong punitive culture, with an emphasis on penalties for non-compliance, and a rigid mindset.

The country in which the vendor agent worked had a more laid back culture, with an emphasis on collaboration, friendliness, yet a stubborn independent resistance to authority (“Nobody tells me what to do!”).

This was a relationship where there was a clash of cultures and a clash of mindsets. I was flown from California to try and work through the issues with the client manager. I think may have shifted the awareness of the client manager to place a little less emphasis on penalties, and consider incentives.

The manager used the word “penalties” many times with emphasis and determination, and never mentioned “incentives”. Maybe I also encouraged an openness to acknowledgement when the vendor moved towards the client needs. But even so, it was one of the most locked-in mindsets I have encountered.

At the end of the exercise, I assessed that with a combination of personal communication styles, and two powerful and conflicting mindsets that were deeply embedded culturally, it would more than likely remain a combative relationship.

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So, what do we take from all of this? These examples are the tip of the iceberg. I have been working extensively on a client-vendor consulting model and materials for assessing mindsets, and the many factors that comprise and drive mindsets in the workplace.

What has become clear to me is how powerful mindsets are, and how they can be so different.

In future posts, I will share more of the insights I have had, based on my own research, on workplace experiences with clients, and when I have managed vendors and partners.

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