A bad vendor is like a bad appliance...

Is there an appliance, automobile, or other durable good in your life that is problematic, breaks down regularly, frustrates you and others in the household, and seems like a bottomless money pit? When you look at the appliance or mention it in conversation, what words come into your mind? Do you think of rainbows and unicorns, or do you find certain farm animals and farm animal parts come to your mind?

When we replaced a dishwasher at chez Cliff a few years ago, we checked authoritative sources on consumer appliance performance and moved forward with the purchase from a reputable merchant. At first things seemed ok, and the dishwasher was at least shiny. Later on, the breakdowns started. The dishwasher would be repaired and work for a several weeks before breaking and requiring another repair. This cycle repeated several more times. Eventually, no one liked the dishwasher. The brand name became a byword for unreliability and inconsistent performance. Eventually, we decided if we had one more issue, the appliance was not going to be fixed, but replaced.

What were the criteria we used to pick the dishwasher? Did we use a good reference source for our consideration set? Did we get a recommendation from friends who used the brand or model? Did we find out what others’ experiences were with this dishwasher? Then, given the experience we had, how likely would we recommend the dishwasher or brand to a friend or colleague?

Then, the final breakdown happened. We put the exit plan into action. We did more research, asked for recommendations from trusted friends, checked the authoritative literature again, and physically reviewed the merchandise. We took our plates to see how they fit in sample models. We picked out something new and reliable. We asked the repairman what he would recommend. Then, we purchased. The replacement showed up, and the old one was replaced with the new one in a few hours. As Kool and the Gang said, Celebrate good times, Come On!

Similarly, if you find no one speaks positively about a vendor, such as Implementations, Service, Product Management, Sales, Legal, Compliance, Risk, IT, Operations, etc., then it is time to determine how to move forward.

Try to fix the situation and stabilize it. Pull out the contract. Look at the Service Level Agreements your company and the vendor agreed to and track internal and external performance. Hold monthly, quarterly, and yearly reviews. If unacceptable SLA issues occur over a period of time, consider invoking your vendor exit strategy. Replacing the vendor may not take one day, but may take months, quarters, or years. Keeping one product up and running while simultaneously building a newer, better one may not be easy to accomplish.

Look at the LaGuardia airport terminal reconstruction as an example. It can feel challenging and difficult in the short term as a passenger, but the end product will be a phenomenal improvement. Provide everyone a vision of where you will end up and find someone who knows how to execute and get you there.

Avoid blamestorming sessions, but figure out what went wrong based on facts. Did the vendor support similarly sized businesses to yours previously?  Did you increase and upskill your implementations and service forces and prepare them for the change? Did you prepare others for the transition, and supplement customer waves with additional resources? Did you train sales and relationship managers on why the new product would be better? Did you have an excellent project manager and bring the A team? Did you focus only on costs and not on the desired outcome? How favorably did references speak of a potential vendor? Did you bring in additional project management and other resources to assist?

To avoid pitfalls of poor vendor selection:

Determine your success criteria.

Provide everyone with the vision.

Seek references from your trusted network. 

Find reference reports from unbiased, third parties where possible.

Have procurement run the RFI/RFP, but serve as the SME and overall business owner.

Bring the A-team together from multiple disciplines for vendor evaluation, and pity the fool who does not.

Make sure you have adequate funding to deliver properly!

Conduct the RFI/RFP and score the results with key partners.

Weigh questions and score responses.

Conduct demos and interviews of potential vendors with key partners and ensure they have a vested interest in the process.

Determine finalists and perform site visits where possible.

Do not underestimate the time required for contracting, compliance, risk, and information security reviews and results.

Bring in a great Project Manager and supporting cast for the project and its kickoff.

Shore up your implementation and service resources.

Run the pilot, measure results, and make adjustments as needed.

Execute, measure, adjust. Repeat.

Finish.

Celebrate.

Advocate for your vendors and partners who perform!