The Importance of Aligning Values With Suppliers

Sometimes, as a consumer, you just have to hold your nose and engage with a product, service, or person whose values do not match your own. Maybe you’ve guiltily added to the world’s plastic pollution crisis by purchasing a disposable cutlery set for a picnic. Perhaps you’ve bought chocolate from a multinational company notorious for deforestation because … well, you just had to have chocolate. And later this year, you might vote for your preferred political party despite an intense dislike for the presidential candidate.

In the past, this situation was not uncommon in procurement. Organizations partnered with suppliers despite a misalignment in values because changing suppliers was seen as too time-consuming, the supplier was well-embedded into the organization, or leaders couldn’t see a financial benefit for making the change. But the growing importance of ESG (Environment, Social, Governance) and organizational values in the corporate world has changed the equation.

Aligning values with suppliers

Today, the alignment of values between an organization and its suppliers plays a pivotal role in establishing robust partnerships and driving long-term success. In this article, we explore why values alignment is essential and why every procurement team should consider incorporating values alignment into its supplier selection criteria.

A foundation of trust and collaboration

At the core of any successful partnership lies trust and collaboration. Values alignment serves as the foundation for building this trust. When organizations and suppliers share similar values, it creates a sense of mutual understanding and respect.

This alignment fosters a collaborative environment where both parties can work towards common goals, share innovative ideas, and solve problems together. Suppliers who align with an organization’s values are more likely to go the extra mile, consistently deliver quality products and services, and act in your organization’s best interest.

Enhanced communication and transparency

Values alignment significantly improves clear and effective communication between organizations and suppliers. When shared values exist, there is a natural synergy that facilitates open and transparent dialogue. This means both parties can communicate and express their needs, expectations, and concerns with ease.

This alignment minimizes misunderstandings, streamlines decision-making processes, and ensures that everyone is on the same page. By fostering a culture of open communication, organizations and suppliers can address challenges proactively, leading to more efficient and effective outcomes.

Alignment of goals and priorities

When values are aligned, both parties share a common vision and purpose. This alignment enables your organization and its suppliers to work in tandem towards common objectives, such as sustainability, innovation, or customer satisfaction. Suppliers who understand and embrace the organization’s goals become invested stakeholders, actively contributing to the organization’s growth and success.

Mitigating risks and ensuring compliance

Values alignment with suppliers becomes crucial in mitigating risks and ensuring compliance with industry standards. When organizations and suppliers share values such as integrity, ethical conduct, and environmental stewardship, it minimizes the risk of reputational damage and legal issues.

Organizations face increasing scrutiny regarding ethical practices, sustainability, and social responsibility. Ensuring compliance is fairly straightforward when suppliers are operating within the same country’s regulatory framework, but international supply chains make this a complex task.

A misalignment in values – such as workers’ rights and safety – can lead to the purchasing organization suffering reputational damage when tragedies like the Rana Plaza Disaster happen.

Driving innovation and continuous improvement

Organizations that foster a culture of innovation seek suppliers who share this mindset. Values alignment encourages suppliers to actively contribute to innovation initiatives, bringing fresh ideas, tech advancements, and process improvements to the table. By collaborating with like-minded suppliers, organizations can leverage their expertise and experience to drive continuous improvement, stay ahead of the curve, and deliver exceptional value to customers.

Incorporate value alignment into supplier selection

Have we convinced you to incorporate values alignment as a critical criterion in your supplier selection process?

This process involves assessing potential suppliers’ mission statements, company culture, and ethical practices, along with a review of certifications and accreditations. Engaging in open and transparent communication during the selection process will help you gauge the alignment of suppliers’ values with those of your own organization. Prioritizing values alignment from the outset can lay the foundation for strong and sustainable supplier partnerships.

Una strives to work with partners that are true core value matches, including the suppliers within our portfolio. Browse our selection of pre-negotiated contracts here.