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Transforming Supplier Management Culture: Lessons from eBay's Misconduct
Implementing supplier management involves more than creating processes, policies, or procedures. The real challenge lies in transforming an organisation's culture and behaviour from treating suppliers as mere third parties to viewing them as collaborative partners. The eBay harassment case illustrates how far some organisations need to go to achieve this transformation.
What exactly did eBay do? In 2020, eBay employees engaged in a harassment campaign against David and Ina Steiner, operators of an e-commerce newsletter. This campaign included sending live spiders, cockroaches, a funeral wreath, and intimidating messages. The Steiners also received bizarre packages, such as a bloody pig mask and a book on surviving the loss of a spouse. The harassment extended to covert surveillance, with employees attempting to install a GPS tracker on the couple's car. You can read more about it here and via the links in the article.
The eBay case highlights how some companies dehumanise suppliers and third parties and fail to treat them with respect and dignity. Leadership at eBay fostered an environment where extreme actions against third parties (in this case their critics) were not only tolerated but seemingly encouraged. This situation reflects deeply ingrained cultural issues within some organisations, where the real challenge lies in changing how employees perceive and interact with suppliers and third parties, and in working towards becoming a ‘customer of choice’.
Starting with the Basics: Defining Supplier Management
To move towards collaborative partnerships with suppliers, organisations must start with the basics. Define what supplier and third-party management means for your organisation, and establish the culture and behaviours you want your organisation and employees to exhibit when interacting with these entities. Last year, our SRM research and book focused on the ‘extended enterprise’, encouraging organisations to view suppliers and third parties as extensions of their own organisation. In fact, we found that, on average, over 50% of the customer interaction an organisation has is conducted by a supplier, and on average, 50% of an organisation’s employees don’t actually work directly for the organisation; rather, they are employed by a supplier or third party but spend 100% of their time focused on the organisation’s activities.
Defining your expected culture and behaviours should include prioritising respect, ethical behaviour, and integrity at all levels. Establishing and documenting clear behavioural guidelines is essential, but more importantly, these guidelines must be followed and reinforced consistently. Your employees should be encouraged to view suppliers as partners essential to the company's success, rather than obstacles or nuisances. We have found that the missing ingredient is training for these behaviours. From our SRM research, the consistent failing is the lack of training in behavioural skills, not just for Procurement or Vendor Management team members but for all employees interacting with suppliers and third parties.
Why is this important? From our research, we see that employees often absorb the cultural traits of their organisation. If a company treats suppliers and third parties poorly, employees are likely to adopt similar attitudes. This negative behaviour can create a toxic cultural environment, where unethical practices become normalised. The eBay case shows how damaging such a culture can be, leading to severe misconduct and legal repercussions.
Lessons from the Stanford Prison Experiment
The dangers of a toxic organisational culture and behaviours can be likened to the findings of the Stanford Prison Experiment. In this psychological study, participants quickly adopted abusive behaviours when placed in positions of power, demonstrating how situational factors and authority can lead to the mistreatment of others. Consider the power imbalance that often exists between organisations and their suppliers, especially if your organisation is a Fortune 500 or FTSE 100 company. You may have thousands of suppliers, with only a handful that are larger than you. It is easy to forget that power imbalance, or that what may seem like a small request for you can be a massive undertaking for a small supplier. I recall one FTSE 10 organisation we worked with telling me, ‘We don’t have a bad bone in our corporate body, but watch out for our good intent’. Remember that when organisations treat suppliers and third parties as second-class citizens, employees may feel justified in adopting harmful behaviours towards them, exacerbating a culture of abuse and disrespect.
The eBay case should be a call to action for all organisations to examine their culture and behaviour towards suppliers and third parties and ensure it aligns with how they wish to be treated themselves. I’ve previously written about the supplier experience, and you can find this article here.