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Does a close relationship help or hinder profit on a contract?

It’s likely you’ll have an immediate response to that question. But is it actually so simple? And is your response the same as everyone else’s?

From the opposite perspective, we could equally ask, “Does a close relationship help or hinder cost-effective procurement?”

Again, there maybe isn’t a unanimous, clear-cut answer.

It is noticeable that when contracts get in difficulty, the parties tend to act as if being tough will maximise their outcome (or minimise their loss) and so they retreat from connection with the other party. They fear that building or rebuilding relationship with the other side will hurt their financial position, because they’ll then be obliged to concede.

But is that really the case?

It could be that working on the relationship is the very thing that enables them to achieve a more favourable outcome, especially if they are the ones taking the initiative, or even for both sides to succeed in their goals, perhaps by broadening the parameters of the conversation.

What do you think?

If things get difficult on a contract, are you better to go transactional and tough or to build bridges, or something else?

This artice orginally appeared on Dr David Frasers website on March 17th 2013. You can view it here

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