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Relationship quality measures: "Mind the gap!"
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Outsource magazine: thought-leadership and outsourcing strategy | March 27, 2015

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Relationship quality measures: "Mind the gap!"

Relationship quality measures: “Mind the gap!”
Richard Condon
  • On May 3, 2012
  • http://www.vendorrelate.com/default.aspx

Quality aspects drive us personally and influence the way we look, the products we use, the materials we buy and the way we conduct ourselves in our everyday lives; in fact they influence us more as human beings than we often realise and allow us to differentiate ourselves from those around us. It also seems that the more we envelop ourselves in quality credentials the more confident we feel and the easier it becomes to trust the decisions we make.

Similarly there is a parallel in industry, where companies identify with the value of “quality” and will adopt standards that attempt to set them apart from others. These quality standards become imbedded within any successful organisation and go on to influence their culture to the point where we as individuals mould ourselves to them. Organisations also like to exhibit their quality standards externally through certification and to build internal quality standards as drivers to success.

Business quality standards are usually driven by value, efficiency and results. These measurements are realised through the people that work for them and, in manufacturing, the same three quality areas are used to measure machines and raw materials supporting production. In reality these indicators measure spend and risk in a way that allows an early reaction should something go wrong.

It is, however, surprising that most companies are blind when it comes to Relationship Management and fail to apply the same principle to spend and risk in this space. Business leaders tend to focus on a relationship purely at the delivery level relying on Service Level Agreements to police things, often in blind faith that they match the business objectives that were signed off by the business executives at the time of engagement.

So why do we say “mind the gap”?

To answer this it is necessary to question the following statement first: “As a leader of a service provider organisation or consumer business how blind are we to what is actually going on in our various relationships?”

In consideration of the above question we usually measure managed services through customer satisfaction surveys and relationship scorecard systems. These processes are essential for effective contract governance but miss the point with regard to quality metrics which processes such as Investors in People, Six Sigma, ITIL and ISOs would provide.

So to address the issue we must find a way for our businesses to measure the value, efficiency and results metrics that we know will provide us with the key differentiators to success. We should strive to achieve the accolade of our business being recognised as an “Investor in Relationships”. Achieving this level of achievement provides both a vendor or a client organisation with a status that shows to others that they truly value a partnership and are prepared to invest in them in the same way as they do their people or operational processes.

So what should we do to fill the gaps and realise this Investor in Relationships achievement?

Well initially it starts with both leaders recognising that to achieve quality in a relationship you have to take the SUBway. Which is a metaphor for saying:

  • SHARE your experiences with each other across all hierarchical and functional levels.
  • UNDERSTAND each other through the measurement and analysis of all relationship performance indicators.
  • BUILD and together demonstrate the value you place on your investment through continuous improvement activities.

Taking the SUBway will of course require new disciplines and openness to the way individuals respond to feedback, especially if that feedback is negative. So in a similar vein to what happens in a personal relationship the governance associated with managing the quality process, from both sides, plays a pivotal role.

The SUBway should cover all elements of a relationship. It should address people, processes, products, the business objectives and the contract.

  • People measurements assess the resources providing the service in terms of their attributes and ensure their value contribution is in line with business operational objectives.
  • Process and product assessments should be linked to the operational effectiveness and productivity levels necessary to meet contractual requirements – i.e. how well the client business is supported in meeting its corporate goals.
  • The business objectives and contract should be assessed to see how flexible they are in supporting a changing business environment and whether or not they encourages long-term stability.

So in simple terms this “Share, Understand and Build” strategy is something both parties can use to ensure they have a successful and long term relationship in place. It will support the delivery of excellent results through the people, products, processes and commercial terms that are in place and it will allow organisations to realise Investor in Relationships status (for more information on this visit us at www.vendorrelate.com) and as a result enjoy all the benefits this brings.

As an action plan then the gaps need to be identified and each one assessed to see if it is having an influence on the relationship. Was it there when the relationship was originally started or has the passage of time played its part?  Is it indeed one of the key drivers of the relationship (if so then the root cause needs to be identified, understood in terms of the operational impact and rectified)?

In conclusion, businesses must eventually realise that customer satisfaction and scorecard solutions are not quality measures but only a way of providing evidence that an objective has been met. Understanding a relationship and maximising the benefits that can be realised by doing so requires a different approach that the SUBway can provide.