How to choose a vendor you can trust

Columnist Rob Enderle has spent decades watching and working with vendors. Here’s a look at how he chooses which vendor to go with and why.

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One of the issues we all have is knowing whether you can trust a company or not. There are classes of companies like cable firms and cellular carriers where the smaller ones often stand out because they seem to care about you while the bigger ones constantly trick you into paying more than you intended with fake deals and empty promises. T-Mobile is the only large firm in this class that seems to actually care about its customers. In fact, their continued success appears to be slowly getting their peers to change in our favor.

In the IT space we often get enthralled with the technology and promises given to us from a vendor only to be blindsided because they never really intended to follow through. Meanwhile, other firms measure themselves largely by their customer’s loyalty and not by tactics designed to simply milk your wallet.

I’ve had decades of looking and watching vendors, and have worked for and with a large number of them, here is what I look for when choosing a vendor when my job depends on it.

[ Related: 6 things to know about choosing a new IT vendor ]

Start at the top

There has been an unfortunate trend to stick people at the top of companies that have no background in what the firm does. Yahoo was an excellent example of this, choosing unqualified CEO after unqualified CEO with a board unwilling or unable to actually staff the job with someone who knew what they were doing. This isn’t the CEO’s fault any more than it’s a lower employees fault. Being put in a job you lack the skills to accomplish is a setup for failure.

Worse is when they hire an opportunistic climber from either inside or outside the company. These folks are working for the perks and become famous for their illicit affairs, misuse of company property, and acting like a bad clone of inbred royalty. Their people grow to hate them, they surround themselves with people that lavish praise on them, and while they are seldom held accountable they often crash and burn their firms, killing any and all potential.

What you want is a CEO who cares about their firm, who takes care of their people and engenders the kind of loyalty that good leaders are known for. They can come from inside or outside, but you can tell from how stable their direct reports are and how loyal they are. They also demonstrate loyalty to their customers.

Measurements

Firms that measure themselves largely by nature of how much money they make exclusively are increasingly common. This is an unfortunate result of the growth of “activist investors” and hedge funds, which have largely replaced individual investors who often got into a company for retirement not for a large quick return.   I’m coming around to the idea that if you get a choice, choose private companies over public because they don’t have to deal with this BS and more often don’t have to choose between keeping you happy and spiking the stock to your detriment.

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