Should I Fire My Vendor?

BadContractor“We need to fire this contractor.  They just aren’t working out.”  I’m sure that you have heard that at some point and sometimes the performance of the contractor is bad enough that contract termination is the right thing to do. I was talking with an employee in another part of our company recently and this was exactly what he was thinking. When I asked questions about the contractor’s performance he was able to clearly identify failures and many frustration points. On the surface it made sense to terminate the contract. I then asked him if he had clearly laid out what was expected of the contractor.  He began to stumble so I asked him to outline the specific requirements he had provided to the contractor.  His requirement was “fix any issues that arose .”  My honest response back to him was that he had set up his contractor to fail and the failure was his fault.  The requirement was so vague that no contractor could ever make him happy.  I suggested that he bring in the contractor and hold a quarterly business review (QBR) to identify clear requirements, identify current failures, identify current successes, and establish guidelines for both his team and the contractors teamwith actionable deliverables.  Once he held the QBR, the partnership was back on track. The contractor became a one of his best performing contractors for the rest of the year.  Before you fire your contractor, establish a QBR with the contractor to review their performance and build a strong partnership.  Here are the steps you can follow to make the partnership a great success.

1. Establish a clear set of requirements and deliverables

You would think that this is the easiest part but it isn’t.  A combination of assumed expectations and vague requirements will doom you from the start.  A great vendor will go out of their way to make sure that they deliver and you are successful.  Once you take the time to write down everything that you expect from the relationship then you can define the items your vendor should deliver. In my example, a maintenance vendor was expected to resolve any issue. My friend assumed that they would be onsite within 4 hours for each and every problem.  The vendor expected to respond by the next business day which resulted in frustrations for my friend. Write down your expectations and get agreement from your vendor before you sign the contract.

A Practical Way To Grow Your Business

As a teenager I read an article in the Wall Street Journal about a gentleman (we will call him Bob) who had taken his oil change business from nothing to a multimillion dollar success.  The gentleman started with an old beat up pickup truck and a 55 gallon drum in the back.  He traveled to doctor’s offices and sold his services for changing the oil in the doctor’s car right there in the office parking lot.  He would put the contact information for the doctor’s office on an index card and file it away by month when the service was performed.  Three months later he would pull up the index cards from all his clients in that month and contact them to see if they would like the oil changed in their parking lot again.  He moved from doctors to other professionals and then to parking garages.  He slowly added more customers, trucks, and employees.  Bob’s business revenue exceeded $1 million within two years.

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There are several lessons to be learned from Bob.

1.  Know your customer’s need

An oil change is a simple task but it takes time to either do it yourself or take your car to someone who can do it for you. Bob realized that doctors don’t have a lot of free time on their hands and they are willing to pay a little extra for the convenience and saved time.  Put yourself in your customer’s mind and try to understand what simple item you can provide for them.  Don’t assume that you know what they need. Ask them.  Develop, train, and ingrain the process of asking customers what they need into every aspect of your service, product, and employees.