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Some leaders like to manage teams, people, and vendors by dangling a large carrot and others use a large stick, in other words certain clients kiss their vendors regularly whereas others like to slap them. Most organisations involved in outsourcing are often challenged by whether or not to enforce penalties if the supplier miss certain milestones. According to latest research by Daniel Corsten who has been studying the effects of carrot vs. stick buyer/supplier relationships “confirm that buyer punishment of a supplier has a detrimental impact on supplier trust, conflict, and self-reports of supplier operational performance.” I believe that research to be true, when I look at the success rate of the +30 outsourcing deals I have worked on in the past 15 years I can definitely see a positive correlation between the more penalities in the contract and the more the client tries to manage the relationship by contract the more detrimental impact there is on successful delivery. In other word's you get a lot further by caressing and kissing the vendor vs. slapping them around. Treat them like your team, a true partner....none of that "them vs. us" mentality.

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