The Impact of the Pandemic on Strategic Relationship Management & Governance

Beyond the terrible human tragedy that COVID-19 represents, the pandemic has staggered economies, forcing businesses to re-examine every aspect of their operations.

Strategic relationship management and governance (SRMG) in the absence of a strong operational framework can be challenging in the best of times. As we are all too aware, these are not the best of times. Over the past six months, we have faced enormous challenges; the speed of change and the need for quick decision-making is unprecedented. 

As the world struggles to recover and our workplaces, global supply chains, manufacturing and logistics cautiously rebound from the first wave of the COVID-19 pandemic, we are grappling with what the future holds.  Our strategic relationships will require flexibility and scenario planning that incorporates significant uncertainty as we face challenging times ahead.

Partnerships between clients and service providers are being tested like never before. These partnerships require an SRMG framework that adapts quickly to change. You should identify pain points as well as processes or services that must be added or changed to accommodate shifting priorities and workplace requirements.

The pandemic raises many critical questions that must be addressed as we consider what the workplace of the future will look like, and strong SRMG will be essential.

Here are a few critical questions to consider:

Does your contract with your strategic partner have the flexibility you need in the current environment?

Every business has had to adjust during the pandemic. Is your contract holding you to an agreement that doesn’t make sense in the current environment, or requiring your partner to perform in a way that doesn’t suit your current needs? It may be time to renegotiate a new contract that has the flexibility that you and your strategic partner require.

Are your lines of communication intact, and are all parties open, transparent and consistent in communication?

Shifting priorities, the speed with which some or all of your business may have been shut down or disrupted, and even furloughs and workforce reductions may have impacted primary or secondary points of contact across the strategic relationship. It is critical that breakdowns in the communications structure are addressed immediately, and a culture of open and transparent communication is fostered. Don’t wait to escalate communications issues to avoid breakdowns that could endanger your business or the strategic relationship.

Are you communicating strategic objectives to your partner as you adjust during the pandemic, and is your partner able to remain aligned with your objectives?

Your strategic partner is adapting to pandemic-related disruptions and uncertainty too. It is conceivable that the adjustments that are right for their business make it impossible for the two parties to remain aligned in the same way that made you perfect strategic partners in the first place. Be vigilant, acknowledge and address the situation quickly, and make the adjustments to re-align desired outcomes.

Are you reviewing the KPIs, scorecards and performance review strategy to ensure they reflect the current strategic relationship?

Your strategic partner is going to perform according to how their performance will be measured and rewarded. A flexible contract will allow you to adjust the KPIs and SLAs to specify the required quality, volume or other specifications as the situation dictates. For example, service levels for cleaning and disinfecting will likely need to be adjusted.  Having open and honest communications regarding how these changes will impact staffing and cost is essential in avoiding a breakdown in trust.

Do you have an objective and neutral relationship coach actively involved in supporting both parties?

Most mature strategic relationships incorporate an arrangement with a third party to provide objective review, oversight, coaching and guidance to help both parties remain focused on the intent of the deal and mutually agreed desired outcomes. During this unprecedented time, having that support and guidance can enhance the relationship and its ability to accommodate the fast pace of change.

Remain Vigilant

Beyond the terrible human tragedy that COVID-19 represents, the pandemic has staggered economies, forcing businesses to re-examine every aspect of their operations. For large, complex companies with significant workplace demand, strong partnerships with service providers ensure improved delivery and increased efficiencies.

SIG's virtual SIGnature Events bring together sourcing and procurement leaders from Global 1000 and Fortune 500 organizations for a day of team training, learning and connecting. SIGnature Events are forums that facilitate best practices and build community so you can achieve your goals and make a difference every day. This is not just another webinar; it is a live online event. Join us!

Ingrid Finn, President and CEO, Sireas, LLC

Ingrid brings more than a decade of major multinational corporate real estate and facilities management expertise to her strategic and operational leadership of SIREAS.
She works directly with the real estate and executive leadership of SIREAS’ corporate clients in designing strategic plans to cost-effectively meet their business goals.