In the over 30 years of my work life across different industries, one glaring cautionary tale stems from how to deal with customers so as not to adversely impact that essential relationship.
The advice we received constantly is that the customer is always right and we must not prove them wrong. It is relevant in the context of any customer interface, even if the customer is unhappy. These engagements require comprehensive contract management skills.
A calm and composite composure is fundamental to cope with any escalation. Contract managers holding that responsibility must weigh their responses to balance between contract governance while maintaining a respectful client relationship. They should be accurate and corrective, not combative and confrontational.
A word of wisdom for contract managers aiming for client satisfaction is that they must not forego the rules of contract governance. They should not overrule or ignore the core pledges to digress from meeting their objectives and blindly indulge in pleasing the contract representative.
How often do these executives misunderstand the client satisfaction notion and end up in appeasing? As more “adjustments” are introduced on both sides of the contractual divide, it brings increased subjectivity that inevitably leads to fractured contract mandates and conflicts. These acts put the contract and organizations at risks.
We often notice that these cozy relationships between the contract manager and client representative dilute contract governance. These relationships, termed as the “alliances of convenience”, works contrary to contract objectives.
More so in the context of management changes in either of the contracting organizations, these alliances give rise to many other complications. Most individuals in these alliances choose their relations of convenience and often circumvents the necessary contract framework, which is meant to provide for certainty for both parties.
Transparent and tactful
Another compelling issue is professional competence in managing this role. To adhere to various management and communication protocols, the contract executives or managers must be transparent and tactful. They must not resort to covering up issues instead of containing or following the escalation matrix.
Their personalized comfort with the client or their inability to deal with any adverse news often becomes a deterrent. This compounds the risks and conflicts. They, therefore, require to be forthright and candid.
Issues must be identified and dealt with promptly to use interpretations that seek to cover up is not the right way as these interpretations are often personal to the representatives involved to achieve the outcome they desire. But they need not be replicable in future.
We picked up a customer complaint about a contract that was delivering an average scoring mechanism of over 90 per cent across its KPIs (key performance indicators). However, upon the recent change of client representative, an escalation came about the life cycle of the SLA (service level agreement).
Keeping aside the merits of this case, what is remarkable was that this was not raised by an earlier representative in the KPIs of the previous three years for non-conformity. Neither was it discussed in senior management forums.
This case study shows how this nexus between two people can lead to issues as these executives chose the relationship above contract governance.
To avert such accidents and to cut down the accommodations, the business must not give up the full contract engagement to site teams. They should place a comprehensive risk strategy and periodic high-level meetings to handle any escalations.
Also, careful performance management must be in place for further evaluation of scorecard criteria to rule out any subjectivity.