One of the biggest themes in Zach on Leadership is leading teams. That’s the core part of the job where most leaders need the most help and encouragement. However, that’s not all there is. Another big piece, especially for technology leaders, is vendor management.

I’ve written plenty about the technology sales process. In case you missed those articles, you can check them out here, here, here, and here. I’ve even written specific articles about price negotiations and sourcing. So, what happens the day after the deal is made? This article is all about that. Let’s go.

“Strategic Partners”

Most vendors out there want to be your strategic partner. They want to go beyond the transaction and become embedded in your operations, build strategic relevance, and help you win. That all sounds nice. Why not lean into that and see where it goes? What could possibly go wrong?

Unfortunately, I’ve seen many vendors forget who they work for and what you hired them to do. As soon as you let them in the door, they start wandering around and leverage their access to start drumming up additional business. The bigger and more diversified the company is, the worse this behavior is.

So, as a leader, you must set the boundaries and expectations. Being nice and assuming nothing bad will happen is a poor strategy. You need to be explicit with your expectations. I explain to my vendors that all future opportunities for growth will be predicated by overwhelming success with the task at hand. I also explain that the pathway to building relationships with my colleagues and business partners is through me, not around me.

This may seem a little direct and harsh, but these are lessons I learned the hard way. You can’t imagine the havoc that is wreaked by an unguided and industrious vendor freely going above and around you at will.

Favor

Vendors always want to curry favor with the guy or gal paying the bill. If you own a vendor relationship, don’t be naive about the game that’s being played on you. Most companies, including the one I work for, have a clear gift and conflict of interest policy that spells out expectations. It’s a good idea to become very familiar with it and ask questions of your boss or compliance colleague if you have questions.

Within the bounds of compliance and integrity, there are still some watch-out areas. Your primary account executive will treat you well, and make you feel important. There’s nothing wrong with that, but don’t let that cloud your judgment on the actual performance of the vendor.

You need to develop objective and independent sources of information on how things are going. I check in frequently with my employees, project managers, internal customers, and other stakeholders to take stock of how things are truly going with the vendor. Then, I use my positional authority with the vendor to get attention on any areas that need improvement. Hopefully, that is not necessary all the time, but occasionally things will come up if you are paying attention.

Contracts

The only people I know who actually enjoy reading contracts are attorneys. While not in the category of enjoyable, managers must know what’s in the contracts that define the commercial relationship between your two companies.

Sometimes vendor relationships take a turn for the worse. There are a lot of things you can do to get them back on track that don’t involve citing the contract, but it’s quite handy to understand your rights at all times. Someone (sourcing, legal, perhaps you) worked hard to get favorable terms in the agreement. Know your options and don’t be afraid to use them to help rectify the situation.

If you have an underperforming employee, you go to HR for help. If you have an underperforming vendor, you go to sourcing or legal for help. Just like with the employee, this is your problem to solve. You are on point, but you have support to help you succeed.

Getting to good

Tech leaders with high-performing teams and high-performing vendors are unstoppable. I’ve talked about some of the pitfalls, but what does good look like? Fortunately, I get to work with some fantastic vendors. Here are their best qualities:

1. First and foremost, they are excellent at what they do. They deliver all day, every day.
2. They consistently go above and beyond the bare minimum of the agreement.
3. They don’t waste my time.
4. They take time to learn and respect our processes, timelines, culture, and business environment.
5. They bring real innovation and industry insight. Not the fake stuff.
6. They stick around. Relationships take time. It’s exhausting to work with vendors that experience high turnover or regular realignment of accounts.

That’s my leadership lesson. This is for the tech leaders out there who need to up their game in this area, but I’m pretty sure there are lots of vendors reading this too. Now you know what I expect.

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