C. F. Lynch & Associates

Be a Good Partner

By Clifford F. Lynch

Logistics Management & Distribution Report, April 2001

I'm very loyal in a relationship.  Any relationship.  When I go out with my mom, I don't look at other moms.  I don't go, "Oooh, I wonder what her macaroni and cheese tastes like."

- Gary Shandling


Much has been written about logistics service providers; i.e., how to identify, select, manage, and motivate them.  Yet it's important to keep in mind that the third-party provider represents an equal partner in an outsourcing relationship and should be treated as such.  That means maintaining open communication with that third party as well as making a long-term commitment to the relationship.

Andrew Carnegie once said, "As I grow older, I pay less attention to what men say."  Clearly, verbal communication in his era was as untrustworthy as it tends to be in our own.  Complicating matters, people who profess to maintain a keen sense of integrity in their personal lives at times are unable or unwilling to apply that same code of ethics to a business situation.  Yet in the outsourcing relationship, honesty is the only policy.

More than one third-party provider has heard words to this effect:  "Your handling invoice is in Accounts Payable, but a lot of the people there have been out of the office at a meeting."

The translation of course is, "We have a company policy of paying invoices in 45 days, not the 15 agreed to in the contract, and I am reluctant to admit that to you."

In his book, Is Lying Sometimes the Right Thing for an Honest Person to Do?, author Quinn McKay draws an interesting distinction between "personal ethics" and "gaming ethics."  Under the rules of personal ethics, McKay says, "Most of us generally would agree that it's wrong to deliberately mislead or deceive another person..."

In gaming ethics, however, "deliberately misleading and deceiving others is not only allowed; it's an essential skill for winning."  These are the ethics that encourage running a play over the weak side of the line in a football game, raising the bet on a worthless poker hand, or taking advantage of an opponent's chess move.

Most business executives practice gaming ethics in the routine discharge of their responsibilities, but these actions usually are directed at competitors.  They should not be practiced in outsourcing relationships.  The provider should be a partner striving for similar goals.  It is not the enemy and most certainly is not a competitor.

If that provider is doing a good job for you, moreover, it deserves not only open communication, but also your loyalty.  Some clients feel that keeping a provider feeling insecure about the relationship's future is the best way to manage it.  They believe that constant, subtle threats to cancel the agreement will make the provider strive harder for perfection.  Although this may be effective over the short term, eventually the arrangement will fail.

In other cases, clients will seek new proposals every time a contract nears expiration, even when the third party is providing good service.  More often than not, the last thing they want to do is relocate the operation, but they believe that this strategy will force the provider to keep its skills sharp.

What it actually does is reduce what should be a long-term, continuously improving relationship to a series of short-term planning cycles.  A provider never will feel a true commitment to a client who views it as a short-term associate with possible renewal options.

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