How Shell gets 11 vendors to play nicely together
Shell's Ecosystem Guiding Principles mandate how its 11 core vendors should treat Shell and each other. To mitigate competition between suppliers-on Shell territory, at least-CIO Alan Matula has banned most salesmen from his offices and demands Shell and vendor staff respect the culture and heritage of each other's companies.
Other rules of engagement include:
- Senior executives must set a positive example for everyone else, in part by actively advocating for the ecosystem relationships.
- Staff must work to solve problems at the lowest level possible, using escalation as a last resort.
- Vendors must understand that although Shell wants to concentrate IT spending on ecosystem members, there are no guarantees of contract awards.
- Information gained through the ecosystem should not be used to win additional business at the expense of another member.
- Vendors should respect the intellectual property of other members and consider it confidential by default.
- All participants must do 360-degree reviews of each other and Shell.
Managing vendors by building relationships, rather than pushing and pulling on contract terms, gets Matula early access to strategic technology, he says, and promotes collaboration among IT suppliers on Shell's behalf. But to build the trust and discipline needed takes time, he admits. The first time he met with all 11 vendors, no one wanted to interact. "Silence," he says. But clear and enforced standards for behavior, over the course of 12 to 18 months, helped the vendors get comfortable working this way. "There are lots of people who want to mimic what we do but haven't gone through the journey.
Read more about it strategy in CIO's IT strategy Drilldown.