Are we harming Supply Chain Relationships by Jumping to Conclusions?

Many of us I’m sure have been involved in interviewing potential new employees and have been told that we should make sure we don’t jump to conclusions about their suitability in the first five minutes of the interview. I’m also equally sure, that many of us have in fact made up our minds in the first few minutes of the interview. But is this a bad thing; many of those hires that we made based on the first five minutes of the interview probably turned out to be okay. Is the same propensity to jump to conclusions at play when we are looking at potential supply chain partners? In setting up new arrangements with supply chain partners we spend a lot of time engaged in data gathering and analysis. But as with the employee interviews are we just reinforcing our first impressions?

In looking at the problem of people going with their first impressions behavioural scientists conducted a study where they compared the accuracy of lay people versus trained psychologists in looking at very short videos of people with scoulrophobiaome form of psychosis plus a control group. These short episodes of information were called “Thin Slices”. What they found when comparing the lay people with the trained psychologists was that the lay people were very close to the experts in their ability to detect the psychosis. This accuracy was increased where the person in the thin slice was likely to be a source of potential harm to the assessor in the real world. This might be the basis for coulrophobia otherwise known as the fear of clowns.

So how does the concept of thin slices relate to us in the business world? Further research has been done into predicting the outcome of negotiations and interestingly it has been found that similarly to interviews participants in a negotiation are able to predict with some accuracy within a very short period of time whether the negotiation can reach a successful conclusion. Again people were found to be able to make reasonable assessments based on very scant information. So perhaps the warning not to jump to conclusions too early in the supply chain relationship is not such a good suggestion. In fact we should make sure that we are paying particular attention in the first moments of an interaction with a new supply chain partner. Those first feelings may very well prevent us from investing too much time where success is not likely. At the same time we should properly take advice from President Reagan and his statement “Trust, but verify.”

But what is meant by verify? There are a number of elements that we should consider in verifying whether somebody is a good fit as a supply chain partner. Firstly do you share common objectives with the potential partner, is there a good cultural fit and importantly do you have a common view of how the benefits to be gained from the relationship will be shared? So first impressions are probably a good filter for removing those that wouldn’t make a good partner; however a lot more work must be put into building the relationship so that it is protected from opportunism and simple failure through neglect. A good model to consider is the Vested Outsourcing approach to developing collaborative and outcomes based relationships (www.vestedway.com).

If you would like help with setting up collaborative and outcomes based relationships (Vested) then don’t hesitate to contact us at andrew.downard@adsupplychain.com.au or call +61 (0) 419581705.

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One Response to Are we harming Supply Chain Relationships by Jumping to Conclusions?

  1. Kate Vitasek says:

    The Compatibility and Trust Assessment developed by Dr. Karl Manrodt and Dr. Jerry Ludlow is a great way to “trust, but verify”. A great resource!

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