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Strategic drift

Occurs when the customer and supplier do not work to maintain their relationship and/or work to update strategic priorities. This typically happens after a few good months or quarters. Senior management for either organization “checks out”, moves on to other initiatives and leaves this “successful relationship” to manage on its own. In fact, relationships can manage on their own if contract professionals document a governance structure that stakeholders follow. Strategic drift means:

  • Monthly or quarterly meetings are not scheduled as frequently or at all.
  • The topics at those meetings begin to slip to anecdotal past behaviors, void of data to support conclusions.
  • Suppliers start to lose sight of priorities and are more reactive than proactive when solving problems.
  • The customer thinks the supplier is not proactive, or not doing its job.
  • Customer stakeholders may want to work with a different supplier when in reality they already have a good supplier, but the relationship went adrift.

Solution

Work with your organization’s stakeholders to match the level of governance to the interdependency and complexity of the contract. That means that the most strategic, interdependent and complex relationships will require both parties’ participation in governance structures. Other less strategic, less interdependent relationships may require elements of governance structures at times, but not necessarily as contractual provisions.

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