Early in columnist Russ Kathrein’s career, he was taught to be cautious about getting too close to vendors. The reasoning was simple. Relationships can cloud judgment, weaken objectivity, and make difficult decisions harder.
Why Some Companies Discourage Vendor Relationships
Several well-known companies are often cited for intentionally discouraging close or personal relationships with vendors, including Walmart, Amazon, and Costco. Their intent is clear. They want decisions driven by data, price, efficiency, and scale.
There is truth in that approach. However, most of us do not work in organizations that can leverage the scale of Walmart, the depth of data available to Amazon, or the operating efficiencies of Costco. Experience has taught me something equally important. Success in business, especially long-term success, is built on trust. Trust is difficult to establish without relationships.
The Role of Trust in Vendor Partnerships
I was once invited to an event by a large vendor we did business with. At the time, the relationship was professional but shallow. We worked together, but I did not really know the key people inside the organization. The event itself was well done and enjoyable, but that was not where the real value was created. The most important moments were the conversations outside the formal agenda. Meals, side discussions, and unstructured time allowed me to get to know the people behind the company.
I learned how they thought, how they made decisions, and what they valued. More importantly, they learned the same about me and our business. The time invested felt useful, but not critical, until circumstances changed.
How Relationships Change During Supplier Disruptions
Not long after, that vendor was acquired by another company. Anyone who has lived through a supplier acquisition knows what often follows. New leadership, new priorities, and decisions made far away from the customer. During that transition, the people I had built relationships with went well beyond what was contractually required. They advocated for us internally, helped us navigate uncertainty, and worked to protect our interests during a period of disruption. They did that because of trust. Trust that had been built through personal connection, not spreadsheets or scorecards.
That experience reinforced a lesson many seasoned leaders share. It is harder to make decisions that harm someone you know and respect. Just as it is harder to deliver bad news face-to-face than by text or email, it is harder to make detrimental business decisions when there is a real human relationship involved. That does not mean tough decisions disappear—it means they are handled with more care, transparency, and balance.
Why Trust Matters During Difficult Decisions
Trust does not come from socializing alone. It comes from consistency, honesty, and mutual accountability. Relationships do not replace performance expectations. They strengthen them. When trust exists, conversations are more direct. Problems surface earlier. Commitments carry more weight. Both sides are more willing to invest in solutions rather than argue over responsibility.
For newer leaders, this is an important distinction. Building relationships with vendors does not mean lowering standards or avoiding difficult conversations. In fact, strong relationships make those conversations more effective. When respect and trust are present, feedback is more likely to be heard and acted upon.
The same principle applies when you are on the other side of the table. As a vendor, you want strong relationships with your key customers for the very same reason. When you know your customers, understand their pressures, and have earned their trust, conversations become more productive and outcomes more balanced. When challenges arise, and they always do, customers who know you are more likely to engage, listen, and work toward a solution rather than default to a purely transactional response. Relationships create context. They turn problems into discussions instead of ultimatums.
Balancing Relationships with Ethics and Objectivity
There is also a leadership responsibility to manage relationships properly. Guardrails matter. Ethics matter. Objectivity matters. But avoiding relationships altogether in the name of objectivity can be just as risky. Business is still done by people. Decisions are still made by people. Trust still matters.
In the end, strong relationships with vendors are not about favoritism. They are about understanding. Understanding how your partners think, what pressures they face, and how they will behave when conditions change. When trust is present, both sides are more likely to do the right thing, especially when it is hard.
That is when relationships prove their real value.
Originally Published In LBM Journal
