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Aggression and Abrasiveness Have No Place in a Contractual Relationship; Governance and Professional Ethics Must Prevail



by Tariq Chauhan, Group CEO of EFS Facilities Services Group.


In every engagement, personal or business, ethics demands mutual respect. Respect is a fundamental criterion to usher in a long-lasting healthy relationship. There cannot be shorthanded, be it a service quality, compensation issue, or other failures.

In every contractual relationship, there are rules of engagement. These demand that people follow the given conventions in the event of any gaps in contract deliverables and follow the devised mechanism in the contract. Above all, the spirit of partnership also demands a mature way to seek resolutions through constructive dialogues and due processes.

It is a typical scene to see temperatures running high when clients are faced with unexpected outcomes in their engagements. However, the reality is different.

Instead of going by the rule book or a collaborative manner, client representatives tend to choose aggression and harsh communication to deal with the situation. Although I understand clients’ dismay and predicaments when faced with adverse outcomes.

These days, due to social media channels and improper media management, they duck under pressure, putting undue stress on service organizations.

I fully endorse that clients need to act, but these must act on the merits of each case, including serving warnings if need be but with a corrective mindset, not with punitive actions alone. Irrespective, these must adopt a measured response, not knee-jerk reactions.

These days in routine contract engagements between the service provider and client organization, this has become a norm that people in client organizations choose a stick and bate approach when things go wrong.

People tend to ignore the fundamental rule of business ethics: respect and trust. I respect the basic mantra of business that client interests are essential, and their satisfaction is paramount for any sustainable business engagement. However, this also requires healthy chemistry between the client and the service provider.

To maintain this delicate balance, trust and transparency must prevail, especially in the communication protocols and routine engagements.

Being a stakeholder of a large services company sitting at the top of the escalation matrix, I continue to face this issue in many of my client dealings.

Sometimes, people within the client organizations step out of their contractual formats to instill fear in the service provider by serving threats for invoking contractual covenants for punitive damages. The wisdom should prevail as these must know that threat is never a healthy way to accomplish corrective goals.

Even if warnings need to be served, every contractual format has provisions for administering this rather than abrasive interventions.

Instilling the fear syndrome to seek restitution is not the mature way. Clients must not be seen as bullies but as collaborative allies to seek order.

As reiterated earlier, use the contractual governance decorum and a tactical mechanism to address grievances. People in client organizations must respect that trust and courtesy remain the primary embodiment in the relationship, not aggression.

Unfortunately, aforesaid rogue behaviours are rampant. These do play havoc on the correction process, impacting the morale of people in the service organization that is much needed to achieve the goals of any restitution.

Mostly, I find these behaviours at the individual front within the client organizations than at the organizational level. Certain professionals in the client organizations assume the role of demigods, trying to navigate the relationship as per their whims and fancies.

These tend to forget trust and transparency rules and not aggression. I firmly believe that the service gaps and service level failures can permanently be fixed through constructive engagements, not with a heavy hand.

Don’t build perceptions to seek remedies but apply the actual merits of the issue. In leading to most mobilizations, especially in mega projects, clients often disregard realistic timelines and intrinsic costs required to deliver requisite services when awarding the contract.

However, these harsh realities are thrown out of the window when client organizations prioritize mobilization timelines and deliverables during the go-live phase.

Besides, some professionals often disregard the best practices service providers follow and enforce their utopian ideas. These tend to significantly influence the destiny of the contract wherein even the contractual custodians like procurement and arbitrators have been able to exercise little influence to take up their interpretations.

I continue to see prolonged deliberations and conflict resolutions in this regard.

It is time for client organizations to protect their supply chain partners and develop a defined decorum to deal with contractual obligations and deviations.

These must create practical formats and escalation forums with the contracts to address such situations to prevent rouge behaviours. Clear SLAs and KPIs must be devised to develop a healthy relationship.

KPIs must not be a mechanism to settle individual grievances with the service provider but a contractually defined tool to seek corrective and punitive reimbursements. Unfortunately, the dangers continue to lurk the service drivers as most contractual formats have very unilateral provisions on contractual terminations.

Client engagement teams need to act with maturity and not be seen as bullies. It is high time that contractual formats are revisited. These must ensure objectivity in performance management.

The contract proponents must go the extra mile to develop SOPs to deal with escalations or dispute resolutions. Client Organizations must take decisive measures to prevent people from adopting unsavoury approaches in dealing with service providers’ issues.

These must remove all biases and subjective assessments so that any lopsided behaviours don’t tilt the balance leading to unilateral actions that could have been avoided.



Source: Work Life Mantras

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