When a vendor underperforms, the instinct is to replace them. But this is often diagnosis error. Vendor outcomes are determined long before delivery begins, in the governance system. Five signs your governance is failing: your vendor cannot answer what success looks like. Your vendor operates unseen between governance forums. Your KPIs do not match your program priorities. Accountability for decisions is distributed or absent. Your intent has degraded and you did not notice. Before you replace your vendor, examine your governance. Vendor failure is often a governance symptom.
KEY TAKEAWAYS
Key Takeaways
- Vendor performance problems are usually governance problems in disguise.
- Five diagnostic signals reveal when your governance framework has degraded.
- Fixing governance prevents vendor issues from surfacing in the first place.
- Vendor replacement without governance redesign simply repeats the same failure pattern.
The Governance-Performance Link
This is a cornerstone principle: vendor outcomes are governance outputs. Let’s be clear. When a vendor underperforms, your first instinct is to audit their work quality, renegotiate their contract, or replace them entirely. But the root cause is rarely the vendor. It is the system in which they operate. Seuss+ works with biotech teams to diagnose this regularly. When governance is weak, even strong vendors deliver weak results. When governance is strong, adequate vendors deliver adequate results on time.
The truth is: you cannot vendor your way out of a governance problem. If you replace the vendor without fixing governance, the new vendor inherits the same system and produces the same outcome. This is why it is critical to recognize the five warning signs that your governance has degraded.
Sign One: Your Vendor Cannot Answer What Success Looks Like
Ask your vendor to define success for their scope. If the answer is vague, your governance is failing. If they say “meet the timeline” or “deliver quality work,” you have not done the governance work that precedes contracting. Success criteria should be specific, measurable, and aligned to program milestones. They should be written before the statement of work is finalized. If your vendor cannot recite them, they do not have a clear mandate. And you should not expect one vendor to self-create the clarity that your team did not establish.
Sign Two: Your Vendor Operates Unseen Between Governance Forums
Governance is not a quarterly business review. It is a continuous feedback system. If your governance structure only surfaces vendor performance at quarterly reviews, you have 90 days of visibility gap. Issues that should be addressed in week three are discovered in week thirteen. Course correction becomes expensive. Redesign your governance to include more frequent touchpoints: monthly or biweekly forums where vendor performance, blockers, and emerging risks are discussed. The visibility matters more than the formality. Weekly email updates with escalation flags work better than quarterly presentations with no intermediate data.
Sign Three: Your KPIs Do Not Match Your Program Priorities
This is the diagnostic that Kieran Engels sees most often. You set KPIs for a vendor that do not reflect what matters to the program. For example: a CRO KPI focuses on enrollment speed, but your program priority is data quality and subject safety. A database vendor KPI emphasizes delivery dates, but your priority is end-user adoption and training. When KPIs misalign with priorities, vendors optimize for the wrong outcomes. They move fast when you need them to move carefully. They prioritize volume when you need precision. Redesign your KPIs first. Hold them against your program strategy. Then hold the vendor accountable to the KPIs that matter.
Sign Four: Accountability for Decisions Is Distributed or Absent
When a vendor misses a deadline or delivers substandard work, the response should be clear: accountability lands on the vendor, and the sponsor team works to understand why and course-correct. But in many programs, accountability becomes diffuse. “The vendor failed, but we did not have a clear timeline.” “Quality was not there, but we did not have written standards.” “The deliverable did not land right, but we did not specify what right looked like.” When accountability is distributed, no one is responsible. Vendors have no clear mandate. Sponsor teams have no basis for holding them accountable. Redesign your governance to clarify who is accountable for what and what will happen if accountability fails. This is not about blame. It is about clarity.
Sign Five: Your Intent Has Degraded and You Did Not Notice
This is the subtlest warning sign. Programs do not start with unclear intent. They start with clear strategy. But over time, through scope changes, timeline pressure, stakeholder shifts, and competing priorities, the original intent degrades. What you are trying to accomplish becomes less clear. That degradation is invisible until vendor performance starts to drift. A vendor who was aligned to your original intent becomes misaligned as intent fades. This is not the vendor’s failure. It is a governance failure that has metastasized. The fix: reconnect with your original intent. Restate it. Measure it. Share it with your vendors. Make sure they understand not just what they are delivering, but why it matters to the program.
Five Governance Warning Signs: Diagnostic Table
| Sign | What You See | What It Really Means | The Fix |
| Cannot answer what success looks like | Vendor describes deliverables, not outcomes | Governance work was never completed before contracting | Define success criteria, build into SOW, review at kickoff |
| Operates unseen between forums | Surprises surface at quarterly reviews | Visibility is insufficient to catch drift early | Increase governance touchpoints to monthly or biweekly |
| KPIs do not match priorities | Vendor optimizes for wrong metrics | Strategic priorities were not translated into vendor mandates | Audit KPIs against program strategy, redesign metrics |
| Distributed or absent accountability | Responsibility is unclear when performance misses | Decision authority and ownership were never assigned | Map decision rights, assign clear ownership, define escalation |
| Intent has degraded | Vendor behavior drifts from original alignment | Program strategy was not reinforced as conditions changed | Restate intent, measure it, share it with vendors regularly |
Vendor failure is a governance symptom. Before you replace them, examine your governance.
Key Industry Data
FDA warning letters increased 59% year over year in FY2025, with inspection driven letters frequently citing inadequate safety monitoring and reporting. (Source: FDA)
ICH E6(R3), formally adopted by the FDA in September 2025, requires sponsors to maintain risk based oversight of patient safety throughout the trial lifecycle. (Source: FDA/ICH)
Delayed serious adverse event reporting is among the most frequently cited violations in FDA inspections. (Source: FDA enforcement data)
Safety related issues in Phase III trials remain a primary cause of trial failure across therapeutic areas. (Source: Tufts CSDD)
Between 10% and 25% of patients experience an adverse event during clinical encounters, making proactive safety oversight a non negotiable requirement. (Source: WHO patient safety data)
Frequently Asked Questions
Audit governance through a sponsor team review first. Gather your success criteria, KPIs, decision authority map, and governance touchpoint schedule. Compare them against your program priorities. Identify gaps before you involve the vendor. Then propose governance improvements as program enhancements, not as vendor criticism.
It depends on whether the vendor has the capability to meet redesigned expectations. If they do, redesigned governance with clear accountability, frequent feedback, and aligned KPIs can often reset the relationship. If capability gaps are real, redesigned governance will simply make those gaps more visible, and replacement becomes necessary.
Governance should be reviewed at least quarterly, or whenever program priorities shift, new risks emerge, or performance trends become concerning. Quarterly review prevents decay. If you go longer than that without revisiting governance, you are likely experiencing drift.
Governance defines what success looks like and how progress will be measured. Micromanagement dictates how the work gets done. Governance creates clarity and accountability. Micromanagement creates resentment and disengagement. You can have strong governance with delegated execution. That is the ideal.
Clear governance should come first. Then you select vendors who can operate within that governance structure. If you select vendors first and impose governance later, you create friction. Build governance into your RFP. Assess vendor governance capability as part of selection. This prevents downstream misalignment.
About the Author
Kieran Engels is CEO and Co-Founder of Seuss+, a strategy and execution partner helping biotech sponsors optimize vendor relationships across clinical development. With more than a decade of experience in vendor governance, risk management, and clinical trial execution, Kieran works with biotech leadership teams to build the oversight systems that protect timelines, budgets, and data integrity. Learn more at seuss.plus.
