Recently I had the unfortunate experience of watching a client suffer through the effects of failed relationships with two of his vendors. It was painful to watch, but it cost my client far more. The impact of these failures was delayed project completion, an additional cost of labor and materials, and an erosion of trust with his customers. The most painful realization was that these situations were self-inflicted wounds, easily preventable if my client had followed the proper procedures.
The fundamental issue was that my client failed to properly qualify either vendor to ensure that they could deliver on their promises. I remember Ronald Reagan’s motto during his presidency; trust but verify. In this case, my client invested his trust without verification. Regrettably, the results were predictable. These vendors were not competent to do the work my client required of them, and one was impossible to work with, continually trying to rewrite the terms of the agreement.
The long lead time for materials resulting from the Covid pandemic created a difficult situation for my client. As a result, he looked for an alternate solution using a local vendor. He found someone and immediately gave him four significant projects. Admittedly, this vendor had good references, and his finished product was acceptable. As an executive recruiter, I understand the limitations of a reference check. Extracting useful information from them takes a certain degree of skill. Unfortunately, I was not a part of the vetting process. The result was unfortunate. Although the vendor was a good craftsman, he was not a good businessman. He could not determine appropriate priorities for his work. He had little regard for his customer. He did not finish the required onsite work and held my client hostage for payment he did not earn. My client should not have trusted this vendor with the scope of work needed. Likely, he will soon be an employee working for someone else.
The other subcontractor had done good work for my client on many routine projects. However, he professed to be competent in one area my client had not witnessed. That turned out to be a big mistake. This vendor hired an incompetent subcontractor who made a mess of the project. My client was required to find another subcontractor to demo the original work and start the project over. We later learned that the subcontractor had hired a relative to complete his job. My client refused to pay him for the shoddy work. Even so, the vendor continued to demand payment for his work. My client could not finish his work on time, which strained his relationship with the customer.
Both situations created significant angst for my client. He gave his vendors his complete trust without adequately vetting their capabilities. I explained how he could have used me to check the references on one vendor and how we might have further vetted the competency of the other. My client was operating in blind faith. That is not my preferred way to conduct business.
I use a well-defined process to build trust. I begin by giving someone small projects to evaluate their competency. If the first project is successful, I gradually increase the scope and complexity of further tasks assigned to that person. The last thing I would ever do is give a significant assignment to an unproven person. This process works for almost any relationship.
I believe that respect is given, but trust is earned. Everyone deserves respect; it’s just a good practice among human beings. However, one must earn trust. It is a precious commodity to be carefully guarded. Gaining someone’s trust requires an investment in time. You know what you have to do to gain the confidence of your clients, customers, friends, and especially your spouse. We must be vigilant to guard against situations that put our relationships at risk. That includes developing confidence in the capabilities of our employees and vendors to help us serve our customers. Share on X
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Jim Weber – Managing Partner, ITB Partners
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About the author: Artie Ruderman: Partner, ITB Partners, Management Consultants / CEO
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