5 habits of highly effective supplier managers

Hand on heart, do you think you’re giving your suppliers a similar level of attention and leadership as to your own team? It’s difficult, we get it. Internal demands can often seem more pressing – not least because you’re so much more easily accessible for the people who work with you onsite. But what if we told you that better leadership in supplier management is directly related to better business outcomes?

In our 2016 procurement study, we investigate how leadership style is impacting supplier performance. Our participants found that best performance is the result of a combination of behaviours associated with Transformational Leadership and Contingent Reward. It didn’t only lead to up to 27% better performance, but also to up to 50% reduction in time required to manage a supplier.

Interested in learning how you can save time and get better supplier performance? It’s all about practice. Here are the 5 habits of highly effective supplier managers.

1. Express confidence

Just like staff, suppliers grow to their full potential when they are motivated and inspired. Leaders should have a realistic sense of what can be achieved in which timeframe and challenge their suppliers to deliver their best possible performance.

2. Trust your supplier’s experience

Chances are your supplier has seen it all. They serve dozens of clients every day. You should take advantage of their expertise and ask them for their input when trying to solve a business problem rather than asking them to merely execute your ideas. Consulting your supplier when solving problems shows that you value their experience, creates a sense of ownership and keeps everyone motivated. But above all, it leads to much better solutions!

3. Talk enthusiastically about your goals

Vocalising your enthusiasm is another important tactic to keep everyone motivated. If you don’t believe in the goals, who else will? Leading by example includes having a clear pathway and encouraging others to perform their tasks as well as possible. There is no place for cynicism in leadership.

4. Set specific and measurable performance targets

Performance targets are an important way to communicate to everyone involved what good performance looks like. Make sure to have measurable targets that everyone understands and agrees with. This ensures the performance is assessed in a fair and objective way. It will also save you from opinion-based arguments.

5. Reward exceptional outcomes

Yes, it is important to set clear goals. But it is even more important to outline the rewards of good performance. Rather than putting “sticks” in your contract (which would align with the Management by Exception style), incentivise your supplier with carrots to receive higher performance. This could be as easy as taking your account manager to lunch. Or even easier, just saying, “Well done” more often.

Supplier Performance Starter Kit

Supplier Performance Starter Kit

Your guide to greater supplier performance!

Want to spend less time on poor contract performance?

Get your copy of our Supplier Performance Starter Kit to learn:

  • why contract managers should be taken more seriously
  • the skills you need to be a great
  • best practice KPI development
  • the tools you need for easy supplier management
  • how to negotiate win-win outcomes
  • contract law fundamentals
  • what to do when things go pear shaped