Especially when allocating substantial dollar commitments to vendors of choice. The obvious, "risk-averse" approach is to select MBE's who appear to be most likely to succeed. However, by doing so, we reduce the size and diversity of the pool by not selecting MBE's with different credentials who may be capable of making major contributions to an objective. What strategy would minimize the risk and optimize the success of a program that is willing to accept the latter type MBE? As decision maker perhaps you have been given the daunting task of making the selection who would be a qualified MBE partner?
The notion of risk is very subjective. It involves an interplay between the probability that an adverse event will occur and the severity of its perceived consequences. There are high financial stakes when funds are committed to supporting MBE's for multiple years, which must be weighed against the risk of selecting an MBE "that can't stay the course." Perhaps more important, the failure of ONE MBE often has rippling effects, not just on the MBE, but to the customer and its customers. The risk of that trauma is reason enough for some to err on the side of selecting only those MBE's who are likely to succeed. In such a case, the value of giving someone a chance is outweighed by the value of avoiding failure.
Assuming that we want to reap the potential benefits of accepting into our programs MBEs who have nominal credentials, are there ways to minimize the risk of taking risk? I believe so, provided that three elements are in place: 1) a plan to provide assistance 2) a clear measure of accomplishments; and 3) a set of alternatives if satisfactory performance is not being made. In order to provide the most effective assistance, it is necessary to determine the skill levels of the MBE and develop a plan for guiding needed improvements.
Is the MBE an established entity? Does the MBE possess good critical-thinking skills? Is the MBE's experience and knowledge well-rounded? Is the MBE conscientious of critical delivery schedules? These and similar questions will help identify an MBE's relevant strengths and weaknesses and guide the development of a customized tailored program for the "vendors of choice."
In order to ensure that progress is being made, take periodic measure of the MBE's skill to provide personalized, constructive feedback and reinforcement. This process will increase the overall performance of the MBE's services and provide you the customer with a partner that is most likely to succeed.
If a program takes risks, there will be a certain amount of fallout. Conscientious guidance can help mitigate the trauma of failure and distress that is often associated with such programs. When the MBE's have multiple options before them, they will see that many paths can lead to success as long as the customers utilize their strengths. While you may be taking some risk, make sure it is calculated risk-partnering with MBEs of varying background levels and variable performance trajectories, and then help us to become successful.
How can programs look beyond the "risk-free" MBE talent pool and take calculated risks with some MBEs who have unconventional, but potentially valuable products and services? Should the quality of such MBE programs be judged on the volume of dollars committed to MBEs or on the quality of dollars committed? I invite you to consider the answer to these questions if we the answer to these questions if we are to be successful together.