Two companies had recently engaged, under a memorandum of understanding, in an outsourcing relationship whereby the Service Provider would deliver sales, service, and merchandising services for the Manufacturer.

Although the contract was still being finalised, service delivery was started under the MOU agreement.

Over a period of a few months, the Service Provider company was delivering their end of the bargain and sales were progressing well.

They found, however, that they spent a lot of time responding to email ‘dumps’ from the Manufacturer’s Marketing Manager.

These emails varied but generally challenged the level of service, claimed unprofessional behaviours and indicated also that the Service Providers sales team were unhappy with their employer.  The Managing Director of the Manufacturer was copied in on every email.

The Service Provider diligently had people investigate all the ‘problems’ raised and sent long responses with the facts to demonstrate that there was (in many cases) no problem and the service levels were being met.

Compounding this, the Service Provider found that over half the problems that did arise, were a result of mistakes or poor performance by the Manufacturer and, in particular, the Marketing Manager (eg not providing information on time, changing their minds and making data entry mistakes).

Just four months into the relationship the MD of the Manufacturer decided to confront the Service Provider.

While the facts presented demonstrated that the service delivery had been going well and meeting expectations, the MD was no longer prepared to believe anything that the Service Provider told him, as he had consistently been hearing bad reports from his Marketing Manager.

How Could You Deal With This Situation?

Would it be possible to avoid the relationship breakdown?  What are some of the things the Service Provider could have done to mitigate the risk and prevent the breakdown?

In the case above, the relationship dissolved – the Service Providers Salespeople were transitioned to work for the Manufacturer and many resigned.