Covid-19 Has Exposed the Best and the Worst of Customer Relationships
In a series of articles, CEO Andy Steele will be looking at how the current crisis will affect the way we do business, and whether it will foster new thinking and new ways of working to help the construction industry address its deep rooted challenges on productivity and value.
They say that your true character emerges when you are under pressure. The turmoil created by Covid-19 has proved this to be the case. It revealed striking differences in customer behaviour. Some acted with the utmost integrity and understanding. Others… well let’s just say we won’t be continuing those relationships.
Inspiring customer leaders held weekly collaborative calls. Their business leaders shared best practice and supported each other. They clearly articulated their position and the circumstances which they themselves were working under. Underlying their position was the realisation that the situation wasn’t of anyone’s choosing and we all have a vested interest in plotting a sensible way forward.
The Procurement Policy Note (PPN) sets out guidance for public bodies on paying their suppliers to ensure service continuity during and after the current Covid-19 outbreak. Many customers were happy to engage in discussions about how it could be applied to support our collective project teams. With these customers, there continues to be very close liaison with supplier relationship managers and key account managers to understand impacts and vulnerabilities. These customers proactively sought ways to help.
Leaders in these organisations have been forthcoming with commercial and financial support. For example, by implementing early agreements to cover costs of Covid-19 regardless of contractual terms, and providing cash flow support with early payments. Some customers readily made changes to contractual arrangements to more fairly reimburse additional costs due to the introduction of inefficient social distancing working methods.
Leaders in these customers pushed to keep their project activities going wherever possible because they recognised the impact on the whole supply chain of stopping programmes. They worked closely with us to implement and apply standard operating procedures as efficiently as possible.
These Covid-19-progressive customers recognised that additional sales could substantially help the entire supply chain and have sought to accelerate new work as much as they possibly could. Opportunities were unlocked by taking advantage of the lower volume in commuting and use of operational buildings and public spaces.
On the Other Hand…
At the other end of the scale we have witnessed some alarming, disruptive and counterproductive customer leadership behaviours.
Maybe behaviour was driven by a lack of visionary and collaborative leadership or the ability and confidence to face the impacts of Covid-19. Their teams very quickly become dysfunctional. Failing to recognise the collective enormity of the challenge, the response has been to entrench themselves internally. There was slight regard to the requirements of the Procurement Policy Note (PPN). Instead, there was an attempt to aggressively apply pre-Covid-19 Terms and Conditions in an unprecedented pandemic crisis.
These customer leaders have typically distanced themselves from any collective or proactive review and decision making, with little or no engagement at all. There are often conflicting instructions provided, being told to stop, then don’t stop, then definitely stop, throwing confusion across the supply chain. This uncertainty is followed by early intimations from the customers’ commercial leads that all the contractual risks of Covid-19 impacts rest with their supplier and their supply chain.
Ultimately, this is all self-defeating. We all want to see stalled projects completed as quickly and efficiently as possible and for stability to return to the sector. The way to make that happen is through collaboration and decisive agreed actions, not confrontation and disagreement.