B2B suppliers tell you: Do you listen? Obamacare website and the BP oil spill

The B2B blame game between contractors and BP during the oil spill and the blame game between the IT contractors and the Federal HHS is eerily similar. B2B suppliers tell you- but do you listen? is the question to ask.

The prepared remarks of HHS Secretary Kathleen Sebelius for her testimony tomorrow (October 30) are available and the last para on page 2 gives a sense of B2B and Supply chain relationship déjà vu:

"To build the Marketplace, CMS used private sector contractors, just as it does to
administer aspects of Medicare. CMS has a track record of successfully overseeing
the many contractors our programs depend on to function. Unfortunately, a
subset of those contracts for HealthCare.gov have not met expectations…." 

Contrast this to what the Obamacare website contractors said (watch the CNN video alongside) as they
gave testimony last week. The contractors are trying as best as they can to not
directly blame CMS and say "we told you so."After all, they need to get the work done eventually, and will have to work with many of the now beleaguered folks at CMS.

The BP oil leak parallel from 2010 involved the Government as regulator, BP as the buyer and several contractors that supplied to BP who were similarly grilled at a senate hearing. Since there was no going back to the sad accident, contractors were more forthcoming in blaming each other and particularly the B2B buyer BP.

The core characteristic of B2B markets is that the buyer (BP for the Oil well and the Federal CMS/HHS for the Obamacare website) is buying something to achieve an organizational objective. Suppliers that get contracts, tend to be the ones who are competent in the services/goods they are expected to supply. These suppliers also have a good sense of the client's organizational objectives for what they are buying.

In the case of BP it was to get the oil out safely from the off-shore well. And for CMS/HHS it was to get everyone enrolled smoothly through the healthcare.gov website. Most good contractors do speak up with concerns but repeated research in B2B markets including distribution channels,  indicate that big buying organizations like BP or the Government are perceived as enormously powerful by suppliers. So the poor suppliers, who are really experts in their fields, talk respectfully and softly as they want to be on the "right side" of the powerful B2B customer. So long there is no oil well blow-out or a website fiasco, things work.

It is during committee hearings that suppliers are forced to speak up. The fundamental problem is that most big organizations have a junior level manager handling the supplier on a day to day basis and there are no clear processes to convey supplier perceptions of risk up the buyers organization.

The adage that "bad news does not travel up organizations easily" applies very much to supplier feedback. And you can be sure that supplier employees show more deference than your own employees. Thus  a serious concern is expressed so softly by a supplier , that it does not register. Hence the President did not know about the the website problems that the contractors had pointed out, ahead of the launch  and it is very likely that HHS Secretary Kathleen Sebelius did not either. In fact, even CMS chief Marilyn Tavenner, did not register the warnings in the contractor CGI reports.

The public hears about the BP oil spill and the Obamacare website but there are probably hundreds of minor fiascos, every day, because B2B suppliers tell you and you are not listening seriously and reporting up your organization for easy actions that can avert disasters.Contact StratoServe.