Review of the Defence Sector – Part 3

“We are an undemanding customer and they can use us as a ‘milk cow’”

In this episode we concentrate on behaviours, culture and trust. Although some of the relationships in this 2001-2004 portfolio were excellent or good there was a widespread adversarial culture based on long held traditions. There were ingrained beliefs that the supplier was there to make profits at the customer’s expense and from the other side a deep suspicion that the customer was attempting to get something for nothing.

Opportunistic Behaviour

Adversarial behaviour – appears to be both wide spread and results in each side looking for advantage at the expense of the other.

“They drag their feet on modifications that improve reliability because the more they stop things going wrong the less they make on repairs.”

“The supplier is unwilling to disclose problems until it has produced a solution which is advantageous to him and cannot be changed except at significant cost.”

“There was a clash of wills with them wanting to make more money by adding extras and us digging-in for basic outputs.”

“Recently without warning, they marked-up prices by 2-300%.”

“The customer took unfair advantage by changing the delivery price arrangements in the small print of the contract without discussion.”

“The customer’s attitude is: ‘we’ll share whatever you have got.’”

“I think they take the view that our equipment is legacy, we are an undemanding customer and they can use us as a ‘milk cow’.”

Trust

A legacy problem – As a result of historical instances of adversarial behaviour trust had suffered and staff realised that it would take time to recover. In the meantime progress towards working together was very slow.

“In this day and age I believe no large company will try to rip-off this customer. The audit trail and accountability are there so why not trust us?”

“They must trust us to make a reasonable profit in exchange for a better value for money service. The current partnering debate has yet to address this thorny issue.”

“One of the real problems in trust-building is the rapid change of customer staff and especially because the newcomers want to stamp their persona on the relationship. We waste so much time. Progress is really slowed.”

“The contract margins are significantly lower than others. We thus don’t do any work at risk because we do not trust the customer to pay for it even though our contract is fully funded.”

“We feel we are being ‘ripped-off’ by the supplier over prices and as a result we have real difficulty in reducing our costs.”

Culture

The shadow of the past – The relationships were long-standing and between organisations with strong clashing cultures. Progress towards collaboration was often held back as a result.

“There are often different expectations from them; it’s the Public sector v Private sector attitude. Today we don’t have time to provide a gilded solution; 95% has to do.”

“There is a prevalent view in the customer that we are not to be trusted otherwise it is not possible to obtain value for money.”

“The supplier lacks resources to change its culture and is a year behind us in progress.”

“They were very arrogant with a take it or leave it attitude. We have invested a huge amount of time on them socially to build bridges and influence their culture.”