I’ve worked with sales people in major accounts in Finance, Professional Services, IT and many other B2B environments for over 30 years and it’s been clear in that time that a shift has occurred, at least in emphasis, in buying criteria on the Clients’ side. Technical ability and price seemed to be the big two when I first started at IBM, however while these are still gating factors I have lots of evidence that cultural fit has become more important.
Over recent years I have been able to explore this issue with literally 100s of teams and thousands of people getting their insights and experiences of the practical impact of working in Clients on important projects where there was good and poor cultural fit: the differences were night and day.
|Good Cultural Fit||Poor Fit|
|Clear and shared expectations owned jointly||The statement of work employed as a weapon by Client|
|Bonding and collaboration||A sense of them and us|
|Issues when they arose could be aired and resolved to both parties satisfaction||Issues often hidden to try to maintain Client satisfaction and because of a senses of fear of the Clients reaction.|
|Innovative ideas brought by both parties to the project openly and frequently||Innovative ideas raised only if they are an opportunity for additional charges as change control|
|Change seen as opportunity for both parties.||Change control seen as a battle by the Vendor to improve margins|
|Vendor team seeking the success of the Client||Vendor team trying to finish and get out as soon as possible|
|Good reference and repeat or additional business||Dissatisfied Client and Vendor team.|
|Great results for the Client and margin for the Vendor||Poor margins, and a frequently voiced feeling that the Client was unreasonable|
These differences led me to a number of conclusions.
Since in their formal procurement documents and their informal discussions Clients are emphasising Cultural Fit as a key criterion for selection, Vendors need to be really clear about their own Culture, and should not simply assume that they can adapt to that of their Client.
Vendors need to also have the skills to assess a Client’s culture and to get the Client to explore it with them. It is not enough to compare the words both Client and Vendor have on the walls of their respective receptions to discover that both share words like TRUST, RESPECT, COLLABORATION, INTEGRITY etc. etc. What’s important is the evidence of behaviours not what’s written on the wall. How many times have you been in a conversation that asks for examples of how these things apply in the Clients organisation and what value they place on them? Come to that how many Vendors can give examples to their team of the real values and behaviours of their own organisation?
It’s become standard operating procedure in procurement for a Vendor to take whatever they read about a Clients’ culture and then describe how they fit with it. This is clearly nonsense – we can’t fit with every other Culture, and society isn’t a monoculture we are all part of. The differences matter, they create diversity, but they also mean we should be really clear about where we might work well and where we might not.
Cultural Fit and Mutual Value
The ambition and change we have described in a number of posts and articles is the shift we are seeing to acknowledging the potential for a Mutual Value approach. It’s a more satisfying approach at the human level, and when organisations adopt it, its also more commercially effective. What we are describing is actually a culture – Mutual Value as an idea drives decision making and ideas – the fundamental definition of culture. And what flows from the idea of Mutual Value as a culture is a number of things:
- We can describe our culture to potential Clients and Vendors.
- It will create consistency of decision making and behaviours aimed at creating mutual benefit
- It will define how we behave not only during a procurement process but also during delivery – its our culture
- We will work well with Clients who also adopt Mutual Value as part of their culture (or who are adopting an EcoLeaderhip model).
- We will work poorly with those who take a Win-Lose or Win culture
Ultimately, given the very negative outcomes of poor cultural fit, whether or not a Client is adopting or wishes to adopt Mutual Value should define whether we bid for their business or not. I believe the movement is there and we should not waste precious resources on Clients who will give us poor commercial returns, cause our employees to become disengaged, and will themselves achieve poorer results from their procurements.