Jonathan PrewittThe postings on this site are my own and do not necessarily represent FTI Consulting’s positions, strategies or opinions.
It’s a scenario no one wants to face, but let’s be real—if you’re in the world of TPRM, you’re bound to encounter it sooner or later. One day, everything is running smoothly; the next, your vendor drops a bombshell. Maybe it’s a data breach that exposes sensitive information, a critical system failure that brings operations to a halt, or a compliance violation that has regulators knocking on your door. Whatever the disaster, one thing is clear: your vendor has gone rogue, and now it’s your problem.
Step 1: Stay Calm and Gather the Facts
The first rule of handling any crisis is to stay calm—even when your vendor is running around like a headless chicken. Panic is contagious, and if you lose your cool, so will your team. Take a deep breath and focus on gathering the facts. What exactly happened? How severe is the impact? Who is affected? And, perhaps most importantly, is your vendor being honest about the situation?
In the chaos of a vendor-induced crisis, the truth can be a slippery thing. Your vendor might be downplaying the issue, or worse, they might be scrambling to cover up their mistakes. This is where your ability to sift through the noise and get to the bottom of things becomes crucial. Ask direct questions, demand transparency, and don’t be afraid to dig deeper if something doesn’t add up.
Step 2: Activate Your Incident Response Plan
Assuming you’ve heeded previous advice and have an incident response plan in place, now’s the time to activate it. This plan should outline clear steps for managing vendor-related crises, including communication protocols, roles and responsibilities, and escalation procedures. If you don’t have a plan… well, you’re about to find out why that was a bad idea.
Gather your incident response team, including key stakeholders from both your organization and the vendor’s. Time is of the essence, but so is precision—rushing into action without a clear plan will only make things worse. Follow the steps outlined in your plan, but be ready to adapt as new information comes to light.
Step 3: Contain the Damage
With the facts in hand and your plan in motion, it’s time to contain the damage. The goal here is to stop the crisis from spiraling further out of control. Depending on the nature of the breach or failure, this could involve shutting down affected systems, isolating compromised data, or even temporarily suspending your relationship with the vendor until the situation is under control.
Containment is all about damage control. You might not be able to undo what’s already been done, but you can prevent things from getting worse. This is also the time to assess the broader impact on your business. How will this incident affect your operations, your customers, and your reputation? The answers to these questions will help guide your next steps.
Step 4: Communicate, Communicate, Communicate
In a crisis, communication is everything. Internally, your team needs to know what’s happening, what the plan is, and what they need to do. Externally, you need to manage the flow of information to stakeholders, customers, and—if the situation is severe enough—the public.
The key is to be transparent without causing unnecessary panic. Provide regular updates on what you know, what you’re doing to address the issue, and what steps are being taken to prevent a recurrence. If your vendor is involved in the communication process, make sure their messaging aligns with yours. The last thing you need is conflicting statements that add confusion to an already tense situation.
Step 5: Evaluate and Escalate
Once the immediate crisis has been contained, it’s time to evaluate the situation. What went wrong? How did your vendor’s actions (or inaction) contribute to the problem? And—most importantly—what needs to happen next?
This is where you need to make some tough decisions. If the breach or failure was due to negligence or incompetence on the part of the vendor, it might be time to consider your options. Can the relationship be salvaged with corrective action, or is it time to escalate the issue and potentially terminate the contract?
Escalation doesn’t necessarily mean ending the relationship, but it does mean bringing the issue to the attention of senior management—both within your organization and at the vendor’s. If the problem is serious enough, you might need to involve legal counsel or even regulatory authorities.
Step 6: Learn and Adapt
Every crisis is an opportunity to learn, and this one is no different. Once the dust has settled, conduct a thorough post-mortem analysis. What went wrong? How effective was your incident response plan? What can you do to prevent a similar incident in the future?
Use this information to update your risk management practices, improve your incident response plan, and—if necessary—rethink your vendor relationships. The goal is to come out of the crisis stronger and better prepared for whatever comes next.
Looking Ahead: The Long-Term Impact
Dealing with a rogue vendor is never easy, but how you handle the situation can have a lasting impact on your business. A well-managed crisis can strengthen your relationships with customers and stakeholders, while a poorly managed one can do lasting damage to your reputation.
In my next post, I’ll explore “Contractual Comedy: Why Your Vendor Agreement Won’t Save You,” where we’ll discuss the limits of contracts and why you can’t rely on legal jargon to protect your business from vendor-related disasters.
Until then, remember: when vendors go rogue, it’s your job to bring them back in line—or cut them loose before they do more harm. Stay vigilant, stay prepared, and keep the show running smoothly.
See you in the next act!
Jonathan Prewitt