How can you manage vendor relationships when there is a conflict of interest?

2 Communicate openly

The second step is to communicate openly and honestly with your vendor about the conflict of interest. Explain your concerns and expectations, and listen to their perspective and feedback. Avoid making assumptions, accusations, or ultimatums. Instead, focus on finding common ground and mutual benefits. Acknowledge the value and importance of your vendor relationship, and express your willingness to work together to resolve the conflict.

3 Negotiate fairly

The third step is to negotiate fairly and respectfully with your vendor to reach a mutually acceptable solution. Depending on the situation, you may need to modify, terminate, or renew your contract, or to seek an alternative vendor. You may also need to disclose the conflict of interest to other stakeholders, such as your customers, employees, or regulators. Whatever you do, make sure you follow the relevant laws, policies, and best practices. Document your agreements and actions, and monitor their implementation and outcomes.

4 Manage expectations

The fourth step is to manage your own and your vendor's expectations throughout the process. Be realistic about what you can and cannot do, and what you can and cannot expect from your vendor. Do not compromise your standards or values, but do not demand perfection or loyalty either. Recognize that conflicts of interest are inevitable and normal in business, and that they can be opportunities for learning and improvement. Be flexible and adaptable, and be prepared to deal with any challenges or changes that may arise.

5 Build trust

The fifth step is to build trust and rapport with your vendor, especially after resolving a conflict of interest. Show appreciation and recognition for their work and contributions, and provide constructive feedback and support. Maintain regular and clear communication, and update them on your progress and plans. Involve them in your decision-making and problem-solving processes, and seek their input and advice. Demonstrate your commitment and integrity, and respect their autonomy and professionalism.

6 Review and improve

The sixth step is to review and improve your vendor relationship on an ongoing basis. Evaluate your performance and satisfaction, and solicit feedback from your vendor and other stakeholders. Identify any gaps, issues, or risks that may affect your collaboration, and address them promptly and effectively. Seek ways to enhance your value proposition and competitive advantage, and to create more value and synergy for both parties. Celebrate your achievements and milestones, and acknowledge your challenges and learnings.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?