A Declaration of Customer-Contractor Interdependence
In the course of history, it becomes necessary to state the separate and equal principles that bind customers and contractors together in commerce.
As business practices evolve, both customers and contractors recognize the need for better results. Both sides want more.
However, adversarial beliefs prevent greater benefits. It’s easier to contract out of habit, or ignorance.
This manifesto is an attempt to improve service contract engagements. By declaring these principles, it’s hoped customers and contractors together will realize more value from their relationships.
We hold these truths to be self-evident, that all service contracts are created with certain unalienable principles, that among these are the following:
1. All contracts are relationships.
2. Successful relationships are based on trust. Counter-intuitively, trust is earned by first giving it.
3. Contract relationships are made for the exchange of value.
4. Value is mutually beneficial – though not equal. Customers and contractors decide for themselves what’s valuable.
5. Contracts are between companies but performed by individuals.
6. Individuals respect one another’s challenges and contributions.
7. Contracts document initial expectations, understandings, and requirements. But service relationships are elastic. Their flexibility enables delivery and contributing to goals while meeting contractual requirements.
8. Because customers select contractors, they have the burden to do so in a fair and transparent manner.
9. Because contractors have been selected, they act as stewards in the best interests of their customers – mitigating risk, lowering costs and improving performance.
10. Customers respect the value of the service contracted. Services are NOT commodities.
11. Contractors respect the uniqueness of each customer’s needs. Customers are NOT the same.
12. Communication is proactive. Strategies, deficiencies, and challenges are communicated before they surprise or hurt.
13. Communication is customized to the needs of frequency and situational understanding – hourly, daily, weekly, monthly, quarterly, or annually.
14. Contractors pro-actively and routinely recommend initiatives that lower customers’ costs, improve service and/or quality.
15. Customers incent and reward contractors’ innovation, for continual incremental innovations and/or major changes. Rewards can include longer contracts, more locations, additional services, cash awards, etc.
16. Communication is open – customers share budget, contractors share pricing formulas.
17. Communication is honest and straightforward – both sides sharing the good, the bad, the ugly.
18. Communication is fluid – info that may impact service or results is never withheld or delayed.
19. Success is praised inside organizations, up and downstream – giving equal praise to those who contributed (customer and contractor).
20. Responsibility for problems is publicly and quickly acknowledged – no excuses, but always includes corrective actions, lessons learned and improvements.
21. Customers act as facilitators within their company – removing barriers to contractors’ success.
22. Contractors act as customer advocates within their company – securing resources and commitments.
23. Customers and contractors do what they say they’re going to do when they say they’re going to do it.
24. Customers pre-qualify contractors before contracting services.
25. Customers’ service specifications are current and accurate – incumbent contractors do this in their own best interests to strengthen customer relationships.
26. Customers respect contractors’ investments to pre-qualify and bid contracts by avoiding unrealistic timelines, excessive travel and voluminous, non-contributory informational requests.
27. With a successful contractor track record, customers avoid bidding contracts only to satisfy internal price-checking needs. Alternatives such as market pricing surveys are used.
28. Cost (contractors’ price) without value is meaningless. When selecting contractors in bid processes, customers rate total cost equal to contractor delivery and service quality. Evidence is verifiable.
29. Customers do not use online reverse auctions for service contracts as they damage customer-contractor relationships, see “Reversing into Darkness“.
30. After contract award, customers verify winning contractors’ performance and delivery of services as promised in the bid selection process.
31. Contractors document service delivery and provide timely reporting to customers.
32. Customers and contractors formally review contract performance reports religiously and regularly (quarterly, twice annually, or annually). Commitment to joint reviews is included in contract.
33. Customers acknowledge contractors’ right to make a profit above cost and effort expended.
34. Customers work within their company to help contractors receive payment per contract terms.
35. If customers’ employees receive increases for cost of living and benefits, then customers incorporate increases for contractors’ employees into multi-year agreements.
36. Customers and contractors use green methods and materials in the delivery and receipt of their contracted service.
37. Contractors value social responsibility to their employees and community equal to, or more than, their profit. Customers oversee contractors’ actions and participate financially.
The Service Contract Manifesto is a vision of what might be. Its value comes from using as many principles as practical in daily practice.