Collaboration – proceed with caution!
The scale of competition and pace of change means we cannot expect traditional relationships to assure long-term success. And the increasing complexity of programme requirements and stakeholder expectations require a new way of thinking and delivering.
Collaboration has been a celebrated buzzword in recent years – and why wouldn’t it be when it promises great potential, implying that 1+1 may equal 3.
Collaboration may well offer a range of benefits such as access to a greater pool of expertise, capabilities, diverse ideas and experiences – all facilitating innovative solutions and optimised performance leading to continuous improvements. Sounds great – I’ll have some of that, please!
No wonder many have started to explore these opportunities and have promptly adopted the new language – “collaborative working practices” and “collaborative relationships” are now pretty much part of the technical vocabulary as much as “category management” and “supply chain management”.
If this is such a great idea, let’s implement it!
There are a number of frameworks on how to make corporate collaboration work which typically cover similar factors:
- Shared vision & goals – the “WHY”
- Organisational design to facilitate cross-silo integration and cross-organisational communication
- Appropriate governance structure & incentives to align motivations of the parties
- Joint performance & progress reviews
- Tailored commercial & contractual models e.g. NEC contracts
There is even a standard on Collaborative Business Relationships (BS1100), and many organisations have already been certified – rail industry was one of the first to start adopting the principles of the standard. So the implementation model. is already known. Or is it?
As with any change programme, whilst the components of the “hardware” are well known e.g. frameworks, tools and techniques, it is the “software” – culture, behaviours and attitudes – that makes it a success or turns it into yet another “management fad”.
What we do is driven by our internal beliefs and values, which in turn are shaped by our experiences and backgrounds. In collaboration context, trying to align on the WHY introduces both the challenge of engaging with multiple and diverse individuals and groups. Multiple influences have an impact on these:
- Individual diversity (gender, personality types, background and experience)
- Organisational sub-cultures (front line operational staff, office-based teams)
- Organisational culture dimensions (influence of hierarchy, masculine vs. feminine cultural dominance, collective decision making)
- Regional or national cultural preferences (broad brushstroke examples include British seeking inclusion, USA desire for action, Asian preference for avoidance of conflict).
Individuals are more likely to buy into a vision or purpose if it is aligned with their own beliefs & values; hence it takes certain similarities of these beliefs for people to be prepared to buy into a single purpose and trust each other. If individuals’ values vary greatly, the chances of them buying into the same vision and behaviours, especially if it is something that requires a change from them, are very low. If they do not buy in, they may agree to go along as long as there is no conflict with their own priorities. Or they may just openly resist.
Whilst one of the benefits of collaboration is bringing diverse talents and perspectives together, does the success of collaboration hinge on people who are less diverse in other ways?
Building upon your and others’ ideas, sharing and iterating together, frequent and open communication at all levels, including between senior leaders, constructive challenge of practices and ideas without fear of negative consequences – these are behaviours that are typically seen as collaborative. Every point of collaboration is a potential source of conflict, and whilst, yes, the rules, authority and processes are necessary to manage these conflicts, “formalising” collaboration goes against the principle of it being rooted in the shared beliefs and vision.
Netflix took this notion and embedded it in the way they run their business: “To sustain a very different culture, Netflix has done away with the traditional human resources policies on holiday limits, expenses, and performance appraisals. Common sense and value for the business are the guiding principles for employees. Netflix leaders believe if they recruit the right people, those recruits will make the right decisions. This approach is revolutionising the HR world.”
The right people making the right decisions – could this revolutionise procurement too?
The crucial but intangible ingredient
There is one essential ingredient in the recipe for successful cross-organisational collaboration that is not something you can write into a contract and measure though the life of that contract. This ingredient is trust among the parties: trust that everyone has the best interests of the other party (ies) in mind. Trust that neither suppliers nor the client are seeking to take advantage of the openness. Trust that the efforts by the parties will be recognised and rewarded proportionate to their contribution. Authenticity, empathy and vision are the qualities that engender trust, encourage initiative and, ultimately, drive collaborative working.
In other words, collaboration is about bringing the right people together and removing the barriers that may prevent them from getting on with it!
Therein lies the challenge, especially in commercial relationships, where by the very nature, the key driver is the assumption that the other party WILL not act in our best interests and pursue their own objectives. Isn’t this why we meticulously document all terms & conditions, operational processes and outcomes, set up various clauses limiting interpretation and restricting scope of choices for. the other party, and introduce sticks and carrots to drive the outcomes we want – assuming that without all this, we will be taken advantage of?
Where to now?
Collaborative working indeed has produced better outcomes and happier, more motivated individuals involved in the process – Network Rail has seen benefits already. It may be easy for some organisations, and may be a longer journey for others. Buying a ticket isn’t enough – you gotta get on the train!
Focus on encouraging collaboration where it stands more chances – where the right people are already in place, where there is a “cultural fit”. Work on spreading the success stories until other suppliers adopt the new behaviours on their own accord – this is a longer term game.
Accept the challenge and drive new behaviours through a mix of formal (e.g. BS1100 framework) and informal influences and enablers to provide the right support and environment that would remove barriers to supply chain collaboration. Some of the important factors are:
- Role modelling & support by organisational leaders
- Empowerment & authority to act for the benefit of the collaborative effort
- Aligned outcome and impact based incentives & performance measures embedded in the contractual terms and commercial processes
- Open communication & escalation channels
Work on enhancing the “software” – the mix of people and attitudes. It is important to remember that not everyone will get on the journey no matter what the incentive. Where the formal levers can only go so far, the bold advice “change people or change people” becomes all the more real. Involve the right people in the supplier collaboration teams and process – even if they have to be brought in from outside of the organisation to drive the changes. Would we have Netflix as we know it now if they decided to just work with “whoever was available”?
Compass Group did just that: Oliver Cock, Commercial Director led a very successful change programme the success of which he credits to “the right people who want to do it”. Indeed, in the first 18 months they changed two-thirds of the team – “two-thirds were new to the roles, 50 per cent of them were new to Compass. Majority of the people left because they didn’t have the right attitude”.
So, how ready are you for collaboration? Is this an approach that drove your people to perform even when “collaboration” was not in-vogue? Is your organisation able to cope with fluidity and behavioural change when the outcome is not easily quantified? If the answers are less than a resounding yes, supply chain collaboration may require additional commitment. Perhaps, it is time to move away from the buzzword and consider what we are really trying to achieve.
Whilst collaboration may sound daunting, for many corporates simple cooperation would be a great starting point on the road to building that trust, commonality of purpose and starting to test different behaviours.
You have come to the place for thought leadership.