By R. Christopher Haines, Executive VP and Chief Operating Officer

Relationships between companies and vendors can be tricky due to many factors — budgets, timelines, experience levels, and maybe most of all, personalities.

The use of vendors in insurance is at an all-time high and growing. Rating and program vendors, data vendors, and IT vendors help insurance companies keep up with their competition by providing services which they may not have in-house. Forward-looking insurers are always investigating vendors to help improve their operations. But for vendor relationships to succeed, insurers have to contribute to that success.

Many such relationships start similarly: The President or another senior executive thinks the company is deficient in a certain area. They seek a vendor to fill the deficiency, or they’re approached by a vendor at a conference or via direct marketing. At some point, they decide to contract with the vendor. More often than not, the point at which they make the decision is the first time the company personnel affected are informed of it. And many times employees are told of the decision with no explanation as to why. Ouch!

Right away, the company-vendor relationship is off on the wrong foot. The employees the company relies on to work with the vendor already resent the decision. They likely think their management thinks they can’t do their jobs. They think you needed to get someone to do what they couldn’t do — or to tell them what to do and how to do it.

Did you really think your people would go into this relationship with the best attitude? Or did you unwittingly create the ultimate us-versus-them environment? Many company-vendor relationships fail because company employees are uninformed. As a result, they become indignant enough to undermine the relationships.

It’s easy enough to dismiss those people as bitter, self-doubting, and paranoid. But you might want to consider if you’ve done something to precipitate their ill will.

The Osmonds might have thought one bad apple don’t spoil the whole bunch. But whether the issue is you, the executive who didn’t communicate appropriately, or one of your staff members who wasn’t open to working with a vendor, don’t let one bad apple ruin what could be a great relationship.