Navigating Complex Projects: Why You Need a Robust Supplier Escalation Policy

By Allan Watton on


Supplier Escalation policyA supplier escalation policy (sometimes referred to as an enterprise escalation policy) is a defined process that outlines how issues or concerns with supplier or partners should be escalated and addressed in complex projects. This could be with companies or individuals providing products or services to your organisation. This process is particularly important for major projects where the timing and quality of the services being delivered can significantly impact the project’s success.

Let’s consider a simple analogy: imagine our project is a ship on a voyage. Every supplier or partner represents a part of the ship, each playing its own crucial role in keeping us moving towards our destination. An escalation policy is our protocol for when something goes wrong, like an engine failure on our metaphorical ship. Instead of scrambling to figure out what to do, the supplier escalation policy provides us with a clear procedure to address the problem, potentially involving different levels of management or even the supplier/partner’s senior management, depending on the severity of the issue.

Why a ‘supplier escalation’ policy is important

Here’s a quick breakdown of why this a supplier escalation policy is important:

  1. Predictability and Efficiency: An escalation policy provides a structured and predictable way to handle issues which saves valuable time that might otherwise have been wasted deciding how to deal with each problem on a case-by-case basis.
  2. Accountability: Clearly defined escalation paths ensure that the right people are involved at the right time, which helps to hold supplier/partners accountable for their performance and contractual obligations.
  3. Risk Mitigation: With a supplier escalation policy in place, you can address issues proactively before they become major problems, thereby reducing the risk to your projects.
  4. Quality Control: Regular monitoring and an awareness of the potential for escalation encourages a supplier/partner to maintain high standards of service, which ultimately benefits the quality of your projects.
  5. The Prospect of Improved Supplier/Partner Relationships: By establishing clear expectations and communication channels, you can foster more transparent and productive relationships with your supplier/partner.

So, in essence, a supplier escalation policy is a proactive tool for the improved management of supplier/partner related expertise and risks. It has the capacity to enhance the quality of your projects and foster better relationships with your supplier/partners, all of which are crucial for the successful completion of major projects.

What does a ‘good’ supplier escalation policy look like for complex projects?

Given the importance of this policy, it is vital that it contains all the explicit elements required to ensure that it can do its job within your relationship. An enterprise supplier or partner escalation policy should therefore consist of the following 7 points:

  1. Policy Objective: The policy should clearly state why it exists and what it aims to achieve. This sets the tone and context for the rest of the policy, aligning everyone with its purpose. An example of ‘why’ and ‘what’ might be ‘to ensure the timely resolution of issues that could impact the quality of services/products delivered by our suppliers or partners’. Part of the policy’s objective is to clearly define its scope, to clarify who it applies to and when it is applicable, to prevent confusion and close the ambiguity gap.
  2. Escalation Triggers: The policy should specify what circumstances will trigger the escalation process to prevent ambiguity and ensure that issues are escalated appropriately. An example of this might be ‘repeated failure to meet performance metrics or contractual obligations’. Note it’s important that any performance metrics or contractual obligations are appropriately articulated and quantified in the context of the project’s ‘Use Cases’. This is so that the escalation policy is fair, equitable and makes sense in practical operational terms, and is aligned to the contractual terms and project being deployed.
  3. Escalation Process: The policy should outline steps to be followed when an issue is escalated, including who should be involved at each stage, ensuring a consistent approach and clarifies roles and responsibilities. An example of this might be an issue being reported to a project manager, then escalated to a department head, and then on to a senior executive, if not resolved.
  4. Responsibilities: The policy should clearly detail the responsibilities of everyone involved in the escalation process to ensure that everyone knows their role and what’s expected of them. For example, it may be a project manager’s responsibility to initiate the escalation process when a trigger event occurs.
  5. Communication Protocol: The policy should specify how escalated issues are communicated, to whom, and within what timeframe to ensure that the right people are informed in a timely manner. An example of this might be ‘any escalation issues should be reported to the relevant senior executive within 24 hours.’ Again, all aligned to the contract terms and ‘Use Cases’ of the project being deployed.
  6. Resolution and Follow-up: The policy should detail how escalated issues are resolved and what follow-up actions are taken to ensure that a true resolution is sought, and lessons are learned to reduce the possibility of future occurrences. This might involve conducting a root cause analysis and implementing corrective actions.
  7. Review and Update: The policy should specify when and how it will be reviewed and updated to ensure that it remains effective and relevant to the changing needs of the organisation. The policy could be reviewed every six months, annually or whenever significant changes occur in the organisation’s operations or supplier relationships. The review should form part of any ‘re-shaping’ process.

These points cover the key elements of a supplier escalation policy. By defining each of these areas clearly, your policy should provide a robust and effective framework for managing escalated issues.

How do you determine if you should have a policy like this in place?

Ask yourself the following 10 questions to determine whether your organisation is in need of such a policy:

  1. What are the specific issues that have prompted questions about the need for an appropriate policy? Knowing the issues that have led to the request for a supplier/partner escalation policy can help you understand the current gaps and potential areas for improvement.
  2. What outcomes are you aiming to achieve with this policy? This will help you understand the expectations of the policy and to measure its success.
  3. Who are the key internal and external stakeholders that should be involved in this process? This question will help you identify all the relevant parties that need to be consulted or informed about the policy.
  4. Do we have any existing escalation procedures that this policy needs to align with? If there are already some procedures in place, the new policy will need to be integrated with these.
  5. Are there any specific escalation triggers that you should be aware of? This can help define clear criteria for when to escalate issues to higher levels.
  6. What are the potential risks or challenges you might face while implementing this policy? Understanding potential obstacles upfront can help you plan for them.
  7. What are your communication and training plans for this policy? It’s crucial to understand how the policy will be communicated to all relevant parties and what training will be provided.
  8. How frequently should you review and revise the policy? Regular reviews are important to keep the policy relevant and effective.
  9. How will success be measured? You’ll need to understand how to evaluate the effectiveness of the policy. What key performance indicators (KPIs) or metrics should be used?
  10. What is the timeline for implementing this policy? Understanding the timeline will help you manage expectations and plan your activities accordingly.

By asking these questions, you can gain a clearer understanding of the expectations, scope, and potential challenges of implementing the supplier/partner escalation policy, which will be critical to its success.

Are there preventative actions which could be implemented to minimise the chances of having to escalate issues in the first instance?

Following the premise that prevention is always preferable to a cure, it is important to look into ways you can minimise the need to execute an enterprise supplier/partner escalation policy. Here are some strategies to help prevent issues from escalating in the first place:

  1. Clear Expectations: From the start, ensure your supplier/partner understands your requirements, performance standards and the consequences of not meeting these expectations. This should be clearly defined in the contract and requirements schedules, ideally, after your supplier/partner has conducted an appropriate exercise of ‘due diligence’ to validate your requirements.
  2. Regular Communication: Maintain open and regular communication with them. This includes periodic meetings to discuss performance, address concerns, and explore opportunities for improvement.
  3. Performance Monitoring: Implement a performance monitoring system to identify issues early. This usually involves key performance indicators (KPIs), regular audits, or supplier/partner scorecards.
  4. Feedback and Recognition: Provide regular feedback, both positive, recognising good performance to motivate your supplier/partner, and areas for improvement, which should always be approached in a constructive manner.
  5. Training: Many clients balk at this, but by providing training to your supplier/partner, you ensure they understand your culture, processes, systems, and expectations. Most importantly, they will feel part of your ‘team’, even going in to ‘bat for you’ with your supplier, on occasion.
  6. Relationship Building: Fostering strong relationships almost always leads to better collaboration and a mutual desire to achieve higher performance.
  7. Expertise and Risk Management: Implement a robust expertise and risk management plan that includes regular expertise, risk assessments and mitigation strategies. This will help you anticipate potential issues and address them before they escalate.
  8. Dispute Resolution Process: Establish a fair and transparent dispute resolution process. This often helps resolve issues at an earlier stage before they escalate.
  9. Supplier/Partner Diversification: Depending on your project’s nature and scale, it may be beneficial to diversify your suppliers/partners to avoid over-reliance on a single supplier.

By taking a proactive approach to supplier/partner management, you can minimise the chances of needing to escalate issues, thereby ensuring smoother project execution and better supplier/partner relationships.

How would you go about implementing a policy of this nature throughout the enterprise?

Implementing a supplier escalation policy requires strategic planning and careful execution. The purpose of the policy is to provide a clear and consistent process for escalating issues that can’t usually be resolved through normal channels. Here are the steps to implement such a policy:

  1. Define the Policy’s Purpose and Objectives: As mentioned earlier in this article, we’d begin by clearly articulating the purpose and objectives of the escalation policy – the issues you are expecting to escalate; the outcomes you hope to achieve through this policy; the stakeholders involved in the escalation process and their specified roles; the triggers that might initiate the escalation process, and a clear escalation path.
  2. Document the Policy: Write a comprehensive document that outlines the policy in detail. This should include the purpose and objectives, the stakeholders involved, the escalation path, and the escalation triggers. It should also detail any necessary follow-up actions and how the policy will be communicated and enforced.
  3. Communicate the Policy: Distribute the policy to all relevant parties, including internal staff and suppliers/partners. Ensure everyone understands their roles and responsibilities in the escalation process.
  4. Train the Teams: Organise training sessions to educate all relevant teams on the policy and the escalation process. This should include role-specific training for those directly involved in the process, as well as general awareness training for all staff.
  5. Implement the Policy: Begin to apply the policy in real-world situations. Monitor the results closely to identify any potential issues or areas for improvement.
  6. Review and Improve: Regularly review the policy and the outcomes of any escalations. Use this information to refine and improve the policy over time. Be prepared to make adjustments as necessary to keep the policy effective and relevant.

Remember, it’s essential to keep lines of communication open throughout this process. The policy should be a living document that adapts to the changing needs of your organisation and its relationships with suppliers/partners.


The implementation of an effective supplier/partner enterprise escalation policy is critical for managing issues, particularly in the context of complex projects. The policy acts as a structured protocol that provides a systematic and predictable approach to handling problems, ensuring accountability, mitigating risks, and ultimately, safeguarding the success and quality of your projects.

The policy should incorporate clear objectives, defined scope, explicit escalation triggers, a detailed escalation process, assigned responsibilities, an established communication protocol, resolution and follow-up procedures, as well as regular reviews and updates. Each of these components serves as a vital function in the escalation process, from initial issue identification to resolution, ensuring that all parties are aligned and that issues are resolved in a timely and effective manner.

For instance, setting clear escalation triggers like ‘repeated failure to meet performance metrics’ provides a concrete criterion for initiating the escalation process. Similarly, assigning responsibilities such as ‘the project manager initiates the escalation process’, ensures everyone knows their role, fostering accountability.

Proactive supplier/partner management, which includes clear expectation setting, regular communication, performance monitoring, and relationship building, can minimise the need for escalation in the first place. It’s about creating an environment where suppliers/partners are not just accountable but also motivated to deliver their best.

Finally, it’s worth noting that the policy should not just exist in the documentation but should be actively communicated and incorporated into the organisation’s operations. By undertaking training sessions and ongoing reviews, this will help to ensure that the policy remains relevant, effective, and well-understood by all parties involved.

Given these considerations, investing in the development and implementation of a robust enterprise supplier escalation policy is a strategic move that often enhances your project success rate, reduces risks, and improves your relationships with critical suppliers and partners.