Collaboration has been described as the ‘new innovation’; in an increasingly complex environment, alliances, consortia and other forms of collaborative enterprise and business partnership have become an ever more important means to win and deliver business.
Here the next generation of consultancy companies, such as Issoria, whose approach is founded on a view of shared risk and reward and a different, collaborative, business model, have potential to add significant value. Issoria’s delivery model is built on virtual teams, bringing together and managing the unique combination of parties able to provide the resources needed to satisfy its clients' requirements, in terms of capability and character, structure and style.
However, not all business are as well positioned. More than once I’ve been engaged to bring together a range of business partners with competing ambitions and aspirations, operating in highly political environments, to form cohesive organisations that deliver results. A consistent theme from numerous engagements is the necessity for mature partnering and collaborative working practices to enable delivery of complexly joint enterprises.
When asked, “What’s the single most important thing you can do to affect alliance performance?”, my simple answer is ‘develop trust’, the foundation of any effective relationship; without trust everything will be hard work, at best.
After this I add ‘be explicit’, which is not something that we are naturally good at. Many professional as well as personal relationships start with too much hope and not enough clarity, which often leads to serious issues. It is vital that everyone’s expectations are understood and needs met from the outset.
Key areas that should be addressed up front include:
- Business interests – Ensuring commercial and broader interests are aligned;
- Ways of working – Developing joint ways of working;
- People – Aligning different cultural values and behaviours;
- Partnership – Proactively developing the relationship
Aligning Business Interests
A common problem that I’ve encountered with the procurement and delivery of major programmes is how the commercial relationship is defined and documented.
Contracts focus on technicalities, terms and conditions, yet rarely do they try and anticipate how the parties should work together, either commercially or operationally. Contracts also often lull us into a false sense of security; whilst they are great for defining technical elements, they often neglect the most important elements needed to enable delivery over the lifetime of the agreement, notably what success looks like for each party and how the parties will work together. This hobbles many well-intended partnering arrangements from the outset.
Without clarity and alignment of commercial interests, risk and reward, friction is inherent in the relationship, and without a clear framework for working together operationally, partnerships are set up to fail before they have even started.
There are two aspects to this, getting everyone and everything on the same page, and writing it down in a way that encourages the right behaviours and drives performance.
Before developing the contract, I advocate having a clearly articulated commercial framework to describe how all parties want the relationship to work in business terms, addressing how new business is developed, won and delivered across the expected life the alliance, and covering:
- Defined Outcomes – A shared view of what success looks like, in terms of vision, mission and strategic objectives. Be explicit about the needs, wants and inclinations of each party at each stage;
- Defined Scope and Changes – This needs to reflect all major factors that could affect ongoing development of the business. Anticipate where the nature of the relationship may change through the life of the programme as the focus, risk borne, roles and responsibilities change. Look for potential sources of dissatisfaction, gaps, overlaps, disparities;
- Governance, Decision Rights, Roles and Responsibilities – How will decisions be made? Who leads, who supports at any point?
- Account Control – Who calls the shots? More than once I’ve encountered partnership tensions due mismatched expectations about account control;
- Stakeholder Management – Mature joint stakeholder management practices are essential. Be clear about who own which relationships, who contacts whom and under what circumstances, and how this will be communicated and tracked;
- Business Development & Work Share – This is often one of the biggest potential sources of friction in a partnership. Be ultra-explicit about how new business will be developed and by whom, and how any business won will be shared from a business and a delivery perspective. Ensure the sales team are trained in a joint sales method and that solutions and proposals are jointly developed;
- Risk and Reward – Alignment of risk and reward is key to ensuring performance and driving the right behaviours. These are frequently out of kilter, with risk being held by parties that are not best able to control it, and reward not being in line with the investment made or risk borne;
- Win-Win – The importance of a recognisable win-win outcome cannot be overstated. If one party feels disadvantaged it will drive counterproductive partisan behaviour. The Berber people of North Africa are hard but fair negotiators and have a principle ‘you’re happy, I’m happy’, which taught me it is not always necessary or advisable to take everything that is on the table; it is better for both parties to feel that the exchange is a fair and mutually beneficial one;
- Resourcing – Allocate dedicated resources who are aligned to and invested in the alliance’s outcomes. This is absolutely essential to ensure success.
Ultimately any activity will be managed against the contract, and success judged accordingly. If the contracting arrangements are sub-optimal this will affect performance and mar relationships. Many major programmes have come unstuck because of poorly articulated contracts!
This does not necessarily mean defining everything in the contract in a great amount of detail. What is needed is to ensure that the contract recognises boundaries and anticipates needs. That it stipulates knowns, enables unknowns to be identified and explored without unnecessary risk being incurred, and drives the right behaviours.
Contracts should be developed collaboratively. Customers have their own contract needs and preferences; however, suppliers generally have more expertise in complex contracting arrangements and should help customers to see a broader perspective and best practice. In one instance, the end customer had insisted on an ‘alternate prime’ arrangement, under which another member of the consortium would take the role of prime if the original partner failed to perform. Unsurprisingly, this undermined trust and collaboration, which encouraged some very counterproductive behaviors as soon as there were delivery issues.
Developing join ways of working
In another alliance, the lack of mature operating practices had not only impeded progress but polarised parties, resulting in little real collaboration. Once the scope of business and the way the deal works has been explored to everyone’s satisfaction, attention should be given to the question of “how are we going to work together?”
Develop an operating framework that sets out a joint way of working for how the parties will operate internally, and how they will work with the customer, as a combined team. This should cover:
- The operating model and organisation structure, roles and responsibilities;
- Business functions, processes, and organisational interfaces – In addition to shared delivery functions such as business development, solution development, implementation and operations, also consider corporate functions such as resourcing and finance. It may well be appropriate to develop a gated lifecycle, covering all activities through the life of the contract;
- Management and governance – Define how decisions are made, including the battle rhythm of leadership and management meetings;
- Business and delivery planning;
- Performance and MI – How progress will be monitored, reported and evaluated;
- Escalation and issue resolution;
- Stakeholder management;
- Business support systems.
It is worth remembering that most organisations function based on a level of tacit knowledge, an informal understanding of the ‘way we do things around here’ that is signposted and acquired over time. In a joint operation, ways of working need to be far more explicitly communicated, and any ambiguity will be magnified!
People are the most important consideration. If people are energised, motivated and aligned great things will follow, yet looking after our people too often takes second place. Some aspects to consider:
- Develop a shared vision and mission – This gives people a real sense of ownership and is a powerful binding agent;
- Develop shared values and behaviours – This is particularly important as subtle differences can create misunderstanding and friction. It is surprising how different practices and expectations can be, even within the same industry;
- Communicate, Communicate, Communicate! – Lamentably, often this is still an afterthought! Put extra effort into this at every level. Communication is by far the best way of creating alignment (and when neglected the best way of fermenting fear, uncertainty and doubt);
- Identify Who’s Who – Ensure everyone knows who is on the team, why they are there, and how they can be contacted. Not just as names in boxes on a chart; get key people out and about, and make sure that the team have opportunities to meet and relate to them as people, not just titles!
- Socialise – Creating opportunities for people to meet in a relaxed environment is one of the best ways of breaking down negative perceptions of ‘the other tribe’;
- Celebrate (and commiserate) – Get people together at key stages, to review progress, surface and address issues, and celebrate successes;
- Align staff remuneration – Consider any significant differences in how staff are incentivised. Getting alignment between different HR policies and practices can be challenging, yet overlooking this aspect can be corrosive;
- Reward and Recognition – Show the team they are valued. Institute a joint reward and recognition programme. Publicly recognise collective and individual achievements. A little goes a long way!
- Garner Ideas and Feedback – Encourage people to engage, harness their energy and enthusiasm. Good suggestions come from all ranks!
All relationships need some structure and formality at times, especially complex business ones. There is a lot of value in having agreed ways in which to monitor the health of a relationship, and to make course corrections to address issues and take advantage of opportunities. Without a formal approach, developing the relationship is likely to be more reactive and problem-focused. Some elements to consider:
- Executive Sponsorship – Ensure corporate sponsors are actively committed to the developing the relationship and have opportunities to meet unrelated to delivery performance;
- Goals and Objectives – Define the outcomes needed for the development of the relationship, such as being more collaborative, which should translate into some measureable benefits for all parties;
- Performance Metrics and Scorecard – Develop and utilise an alliance balanced scorecard. Have nominated roles, ‘partnering-buddies’, in each organisation give periodic feedback on specific partnership-related metrics, which can be used to monitor progress towards goals and to surface issues in an objective way;
- Partnering Board – Have alliance leaders meet regularly, i.e. quarterly, to review the health of the partnership – such as progress against partnering targets and any identified issues – outside of the context of ongoing operations, delivery progress and commercial issues. This also provides a forum to discuss any opportunities and anticipate changes, such as new phases of work, that are likely to affect the relationship.
Whilst alliances are rarely permanent relationships, getting them to work well is vitally important.
Forming an effective alliance is a complex undertaking, requiring more thought and more work than standing up a new in-house unit. It needs more leadership and more organisational design, not less. Critically, there needs to be more focus on people. Leadership needs to be more mature, inclusive and flexible, to bridge differences in cultural values and behaviours.
Doing this takes valuable time and resources. Resist the temptation to cut corners, to be informal, to rely on individual ability. An alliance is a complicated relationship that is easily unbalanced and difficult to recover when out of kilter. The cost of failure is high. If the relationship fails productivity and profitability will suffer, and the cost may be much higher in terms of lost opportunity.
Getting this right from the outset is not simply a functional necessity, it is also an opportunity to develop a joint high-performing team. Even if one of the parties has mature collaborative practices, temper the temptation to lift and shift pre-existing material; take time to develop a joint approach. Make it everyone’s challenge and everyone’s success!
About Anthony de Sigley
Anthony de Sigley is an independent management consultant specialising in strategic business transformation. With over 25 years of experience, he has advised on and led major strategic transformational initiatives and change programmes, working with global enterprises, consortia, SMEs, government organisations and NGOs, delivering step changes in organisational capacity, operational effectiveness and business performance.
Anthony has held the role of Chief of Staff in a number of organisations, including two major consortia, Affinity (EDS, IBM, AT Kearney and PwC) and ATLAS (HP, Fujitsu, EADS, GD and Logica).
Anthony is also an Associate Management Consultant with Issoria.
Issoria is a new breed of management consultancy, better adapted to the needs of global corporations. Its mission is to address global transformation challenges whilst enabling clients to become change capable for the long term, ensuring lasting business outcomes at lower cost.
Operating through a virtual enterprise network, Issoria brings together teams with exactly the right capabilities and character for its clients’ functional and cultural needs. With over 700 Partners and a global associate community of 5000+, Issoria answers clients' demands for a new model of global consultancy.