Vendor Performance Reviews
Welcome to the 4th quarter,time for that annual ritual of bugeting and vendor contract renewal. If you're like many, you probably want to replace a vendor or two of yours. But if you're like many more, you probably won't. Is there nothing that can be done to 'encourage' them to improve, though? Well one way to try is to institute a performance review process with your vendors. Here's a four-step model to try:
Step 1 - Establish an accurate baseline for 2003. Identify the 5 or 6 key performance elements you're looking for from a particular vendor and rate each element on a scale from 1 (awful) to 5 (fabulous) and compare them with what you find with other (unnamed) vendors. Invite your key vendor contacts - and their bosses - to a meeting where you share your findings.
Step 2 - Establish performance criteria for 2004. Identify the 5 or 6 key performance elements for the upcoming year. Maybe they're the same - most of them probably will be - but maybe there's 1 or 2 new ones, too. (Be sure to include 'stretch' goals.) At your vendor meeting, discuss what ratings you'd be very happy with, what ratings you'd accept, and what ratings are intolerable. Ask for their commitment to meet these agreed-upon expectations.
Step 3 - Develop an Action Plan. Ask your vendor to delineate any issues and concerns that would need to be addressed for them to meet these expectations. Schedule a follow-up meeting where they can present exactly how they intend to do so.
Step 4 - Assess progress. Mid-year, invite the bosses back in for a formal status report. meeting. Ask them to rate their progress and use their materials as a springboard for continuing the performance improvement conversation with them.
Getting the bosses involved on the FRONT-END is key. It's their involvement that enables your vendor contacts to get the resources and organizational support they need on an ongoing basis. That makes it much easier for them to do a good job for you.
And that's the point, isn't it?
Step 1 - Establish an accurate baseline for 2003. Identify the 5 or 6 key performance elements you're looking for from a particular vendor and rate each element on a scale from 1 (awful) to 5 (fabulous) and compare them with what you find with other (unnamed) vendors. Invite your key vendor contacts - and their bosses - to a meeting where you share your findings.
Step 2 - Establish performance criteria for 2004. Identify the 5 or 6 key performance elements for the upcoming year. Maybe they're the same - most of them probably will be - but maybe there's 1 or 2 new ones, too. (Be sure to include 'stretch' goals.) At your vendor meeting, discuss what ratings you'd be very happy with, what ratings you'd accept, and what ratings are intolerable. Ask for their commitment to meet these agreed-upon expectations.
Step 3 - Develop an Action Plan. Ask your vendor to delineate any issues and concerns that would need to be addressed for them to meet these expectations. Schedule a follow-up meeting where they can present exactly how they intend to do so.
Step 4 - Assess progress. Mid-year, invite the bosses back in for a formal status report. meeting. Ask them to rate their progress and use their materials as a springboard for continuing the performance improvement conversation with them.
Getting the bosses involved on the FRONT-END is key. It's their involvement that enables your vendor contacts to get the resources and organizational support they need on an ongoing basis. That makes it much easier for them to do a good job for you.
And that's the point, isn't it?
posted by Barry Zweibel at 2:44 PM
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