There are few things more important to the prospects for your projects than the need for you to find a strategic partner that reflects your own ‘commitment to the cause’ (a critical friend supplier) – an ‘Intelligent Supplier’ and an ‘Intelligent Client’ working in good synchronicity.
So important is this collaborative behaviour, that we have dedicated a nine-part series to one half of this relationship, the ‘Intelligent Supplier’. This is the fourth article in the series. We have already investigated the way an intelligent supplier would and should respond to the issues of ‘Business and Operating Strategy’, ‘Changing and Challenging Business Objectives’, and ‘Commercial Trust’. This article will focus on the need for an intelligent supplier to be a constructive critical friend in the relationship.
What is a ‘Constructive Critical Friend’?
The motivations and actions of a supplier who acts as a constructive critical friend are quite different from those of their counterparts. They act and react as if truly invested in the relationship’s success by conducting their own independent analysis on their client’s expectations and aspirations for a project, analysing the prospects of outcomes being achieved, clarity of vision, and a fit-for-purpose solution to achieve those outcomes.
A constructive critical friend will offer innovative solutions; they will tell you when things can be improved, and challenge you when any of the above is lacking. You’ll want to have a constructive critical friend on your side because they improve your chances of achieving your business outcomes within time and budget.
At the top of the pile of priorities that a constructive critical friend would and should analyse in great detail, are the KPIs that are set to evidence progress and created to guide the relationship to its expected outcome.
The role of KPIs in evidencing that your supplier is a constructive critical friend
In the worst performing strategic relationships we researched, and also in many of the strategic relationships we have been asked to realign after the event, KPI measurement is perhaps the most hotly contested area.
Primarily this is because they are all too often used as a stick with which to beat the supplier if they are not achieved. KPIs should be, first and foremost, a learning tool. The ‘right’ KPIs help provide you with insights as to what is working well with your strategic partnership and also what is not. And it’s the detail of the insights you gain from your KPIs that help to determine whether they are ‘SMART’.
There is in fact a simple test to establish whether your KPIs are ‘right’ or not. The test is: “Are you achieving the expected business outcomes from your strategic partnership?” If the answer is no, then your KPIs aren’t aligned correctly. Many client-side individuals try to argue that they have the right KPIs, but that the supplier just isn’t performing. This is often just a half-truth. The supplier may not be performing, but the idea of SMART KPIs is that they provide insights, not only of ‘what’ is not performing, but ‘why’ and ‘where’ the problem is originating. If your KPIs aren’t providing you with those insights, then you aren’t measuring the right areas.
An intelligent supplier and SMART KPIs
This is one of those areas where intelligent suppliers act very differently from those that are less ‘intelligent’. An intelligent supplier will review the client’s business vision, outcomes, objectives, delivery strategy and so forth. From these, it will work with the client to structure SMART KPIs that help the client understand how:
- To align its KPIs to its business outcomes
- To ensure the right ones are in place
- To provide the right insights to ensure the client reaches its business outcomes in the shortest and most cost-effective manner possible.
Intelligent client and intelligent supplier teams work collaboratively and critical-friend challenge each other to ensure the client reaches its end-goal.
Does this mean that the two teams always work hand-in-hand and never disagree? Not at all. There will always be the potential for disagreements and misalignment – the relationship is unlikely to be healthy if it is not being constructively challenged. However, the difference is that intelligent client and supplier teams always sense check themselves about the outcomes to be reached. And if they aren’t being reached, irrespective of the mechanics and opinions of individuals, these individuals have the maturity to recognise something in the objectives, delivery process and performance management system is misaligned and is driving either the wrong insights, the wrong behaviour, or both.
As we have mentioned previously, all eight of the core elements we’re citing as vital facets of an intelligent supplier must exist for a supplier to be elevated to this status. It would be difficult to imagine a client/supplier relationship existing in which SMART KPIs could be co-authored and plans and processes, vision and outcomes challenged by either party unless the right environment had already been established for this form of dialogue to flourish.
A constructive critical friend is a true sign of supplier partnerships in a working strategic relationship, where every aspect of a project’s make-up and aspirations is checked and questioned, and any input from either side is given a fair hearing and reviewed for the good of the relationship.
The next article in this series will be focusing on the importance of ‘Managing the Innovation Process’. But if you would like a recap on the articles we have already published in this series, click on the links below:
- 8 core elements to assess whether your supplier is an ‘Intelligent Supplier’: Article 1 of 9 – Understanding, supporting (and challenging) the Client’s Business and Operating Strategy
- 8 core elements to assess whether your supplier is an ‘Intelligent Supplier’: Article 2 of 9 – Supporting the Client’s (often changing) business objectives
- 8 core elements to assess whether your supplier is an ‘Intelligent Supplier’: Article 3 of 9 – Evidencing ‘Commercial Trust’
Photo credit-iStok, phototechno