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2014

Collaboration can help to overcome many hurdles in within the partner organizations and companies and it can also help support functionality or provide capabilities to the partner organizations.  These are all well and  good in supporting and providing a framework for the stability of the partner organizations.  There is another major, or key, area of capability that collaboration can support and this is supporting and providing the capabilities for the partners and partnership to compete against much larger organizations.  This is the area where the capabilities that can be supported by the partnership network as a whole are much more robust than any individual within a single partner.


The first example that comes to mind to show what I mean is related to staffing.  Lets use a services organization in this example.  You have a potential opportunity for a project with a company to redefine and implement improvements to a function that requires business skills, software implementation skills including infrastructure and data management, and business intelligence.  You are competed with larger organizations that can support the requirements internally while you can only compete in the software implementation portion yourself.  At first glance this would be a deal breaker for your offering and you would move on to the next opportunity.  However, when you take into account the potential to collaborate with others that can round out your capabilities you find that you can easily compete with larger organizations.


I’ve seen some staffing companies moving into this model to survive in the world of project delivery.  These staffing companies grow and put teams together based on individual contractors that possess the necessary skills to support the requirements.  This can and is a very successful model for many small staffing companies that I think would very easily transfer into a small organization collaboration framework.  This model also conceptually fits very nicely into the framework that I have been promoting; perform a SWOT analysis to identify weaknesses and the evaluate the market for partner opportunities to overcome the weaknesses. 


In this case your SWOT analysis would evaluate your capabilities and requirements to compete in new and lucrative market segments that you may currently not be able to support.  In fact I would suggest that this become part of your regular business evaluation process and be performed at least annually both internally and then across your partner network.  It is a very valuable exercise to step back and evaluate the business landscape for new opportunities on a regular basis.  If you do not take the time and energy to perform this evaluation you take the risk of missing out on changes that provide additional opportunities and this could lead eventually to the demise of your business.


And now for the audience participation portion of the show…


How do you identify and address new opportunities in your current business market?  Have you ever tried to develop a SWOT focused on new business opportunities or new markets  to evaluate the fit for partnership and as a means to address and meet new opportunities?  Do you regularly develop a SWOT analysis to evaluate your internal capabilities and needs to support new business and market opportunities?

Complexity in your network drives the need to develop partnerships to help you, and your partners, to overcome this complexity.  This is a foundational platform that I think must be accepted in order to gain the full benefits that can be derived from collaboration and partnership.  The focus on collaboration and partnering is becoming more important now, again I think because of the cost cutting measures that came as a result most recently from the recession.  This downsizing trend though has been a constant theme for a long time now. I believe that we are now coming to a tipping point where the proven benefits have been identified and the potential benefits will be driven by fully embracing the collaboration model. I think that in order to fully embrace the collaboration model all partners must give up some of the control they exert over their network and allow their partners to fully support the requirement without the need for one partner to fully control the execution.


This release of control can be difficult, especially for larger companies that are accustomed to directing the activities.  I think in this respect smaller companies are more aligned with the model that I believe is most beneficial to the partnership.  As I’ve discussed previously, this model of partnership encourages the partners to step up and lead in the areas where they excel.   For instance, I would not partner with a third party logistics provider to develop a marketing plan for an omni channel retailer.  The key point in this model is that you identify your weakness through a SWOT analysis and then you identify and engage the partner with strength in that area.  The critical aspect to this model is that once you identify the appropriate partner with the strength to support your need, get out of their way and let them execute.


In this model I think that the small company has a distinct advantage to engaging and gaining the greatest value from the partnership.  The small company is more aware of their weakness and also more open to allowing their partners to get out of the way.  Due to this acceptance I think that the collaborative partnership model can provide the smaller companies a means to compete with the larger companies.  Smaller companies are more nimble and through the collaborative partnership model they can put together a suite of capabilities or services that can meet or beat their larger competition.  The additional value of the collaborative partnership is that these capabilities can be engaged based on need and so there is no cost to maintaining as there would be in a larger company.


The collaborative partnership can be a very strong competitive tool and even advantage to overcoming complexity and reducing the cost of developing and maintaining the capabilities.  The small companies will achieve a competitive advantage over their larger competitors through embracing this model to simplify and support the capabilities.


And now for the audience participation portion of the show…


How do you identify and address complexity in your current business?  Have you ever tried to develop a SWOT for an external company to evaluate the fit for partnership and as a means to address complexity?  Do you regularly develop a SWOT analysis to evaluate your internal capabilities and needs to address complexity?

The extended supply chain is increasing in complexity as a result of an increase in discontinuous change, including disruptions across the extended supply chain.  One reaction to this increase in complexity is an increase in the costs that must be expended to support the additional complexity.  Increased complexity will also lead to an increase in the risk of failures again generated by the increased discontinuous change and ever expanding supply chain.  One method, and I believe the best method, to address this complexity in your supply chain is through a strong collaborative partnership program that allows the partnership to leverage the strengths of their partners to overcome the weaknesses and challenges.


Lately I’ve been discussing the power of the collaborative partnership to overcome risks in the network.  The ability of the partners to overcome their individual weaknesses is closely related to the risk mitigation aspect of the partnership.  Afterall, weaknesses lead to risks and overcoming the weakness will, in turn, mitigate the potential risk.  So one important aspect of developing a partnership network is the analysis and definition of the strengths and weaknesses of the partners from both sides.  Remember that while you are evaluating others to engage a partnership, the others are also evaluating you for your abilities to provide value to the partnership.  The sooner you begin to think and engage others with the view that the others are also evaluating your capabilities the sooner you will create truly value added partnerships. 


A SWOT analysis initiative is a key aspect to the internal and external analysis and definition and I would suggest that the SWOT analysis become an iterative process and integral to your continuous improvement process.  I believe the SWOT analysis is the ideal tool to engage your evaluation from an internal and external perspective.  This provides a level playing field to the analysis and a standard basis for the comparison and analysis.  Once you’ve developed your own internal SWOT analysis you can utilize your findings to help to identify the potential partners to address your weaknesses and threats.


To overcome the complexity you must give up a bit of control, this may seem at odds with logic but in reality it is the result of developing the partnership.  Let me use an outsourcing partnership as an example; in this case one organization engages, or partners, with another organization to provide support and services in which the first organization does not have expertise.  In this example, the service required by one organization results from a weakness, or risk, and presents a level of complexity in business that they engage the outsourcing partner to overcome.  The partner brings a strength to address that weakness to the table to support and develop a partnership.


And now for the audience participation portion of the show…


How do you use a SWOT analysis in your current business?  Have you ever tried to develop a SWOT for an external company to evaluate the fit for partnership?  Do you regularly develop a SWOT analysis to evaluate your internal capabilities and needs to address weaknesses?

In the supply chain I think that the ultimate collaboration partner is probably the third party logistics provider.  Even though companies engage the third party logistics provider in a monetary contract, the value provided by the partner should be used as a model for developing your collaborative partnership network.  Since the recession I think that the value and capabilities provided by the third party logistics provider has increased dramatically to support the additional demands placed on today’s supply chain.  The leading third party logistics providers bring with them the relationships and best practices they have developed over the years to provide a value model that is really difficult for all but the largest companies to meet.


I see the third party logistics providers providing the beginnings of the same values that supply chain software vendors were bringing to the market and their customers in the 1990’s.  That was when the software vendors reached a point in their capabilities that customers started having a difficult time justifying their own custom development of software to support their supply chain.  That was also the time when the global extended supply chain reached a level of maturity and required a robust software solution to support the growing and expanding needs. 


I see the third party logistics providers as the next generation in supporting the growth and expansion of the extended supply chain.  The leading third party logistics providers add to the supply chain software solutions another layer of services, integration and relationships with service providers that is costly and difficult to develop on your own.  Since the recession, cost cutting and reductions in force have diminished the capacity of many companies to develop the capabilities to support the growing needs of their extended supply chain without the help of supply chain service providers.  The issue with engaging specialty consulting providers to design and develop solutions to support the business need is that the business must then provide the ongoing support and improvements.  


The leading third party logistics providers combine the software, services and even the logistics network to meet the needs of their customers and in addition provide the ongoing support and improvements as part of the standard agreement.  The leading providers have engaged the talent that was jettisoned from companies during the recession and combined this with the software and logistics providers relationships into a compelling value added package.  This, I believe is the next level of services that most efficiently supports the needs of their customers.  This development will continue to drive the question - Why should we develop and implement the capabilities ourselves when we can engage a partner that has already put the services together into a cohesive package?  This will allow your company to focus on the areas that you excel in and make your unique while collaborating with a partner that specializes in supply chain services to bring world class capabilities to support your extended supply chain needs.


And now for the audience participation portion of the show…


Have you evaluated your partnership network to identify how together you can mitigate and reduce business?  What factors and questions do you incorporate in evaluating and selecting partners for your collaborative network?  How can you incorporate your partnership network to help to mitigate risk?  Are you open and have your offered to support your partners in mitigating their business risk? 

Risks to your business will come at you from many directions and must be mitigated by as many different methods.  Collaboration may be one of the best methods to mitigate risk in your business.  You should view your risk mitigation efforts as a team sport and include many partners to achieve the greatest results.  I think that most of the time companies, and individuals, view collaboration as a means to achieve a business or personal objective and overlook an extremely valuable opportunity and that is to mitigate risk. My advice is don’t overlook this important and valuable opportunity to extend your partnership network and reduce your overall risk. 


In discussing risk mitigation and reflecting on my past experience and efforts in mitigating risks I see that collaboration may be the game changing type of factor in your risk mitigation efforts.  This may not be critical to large organizations such as a General Electric, or IBM because their organization is so large as to be considered a collaborative partnership in and of itself.  However, for the small and mid-sized organization the collaborative partnership network should be viewed as a key ingredient or method to mitigating business risk.  This does require a change to your viewpoint and open your business and yourself to helping a partner to mitigate the risk to their business as well as your own.


This risk mitigation exercise across your collaborative partnership network may just provide the greatest value to the network.  It will definitely provide a key reason to enter into a partnership and should be an integral criterial to the partner evaluation and selection process.  In fact I think its a good practice to evaluate your collaborative partner network risk to identify both methods to mitigate the risk and also additional potential partners to add to your network that can both support and benefit from the risk mitigation capabilities of the network. 


One additional important aspect to developing the risk mitigation properties of your network is to evaluate how the network can mitigate the risk for new partners.  Remember collaboration is working together to support the needs of the partners, this is a two way street that must focus on the value of the network.  This focus on the value of the network requires that sometimes members support their partners without a direct benefit.  They do this for the benefit and value of the network.  This process of evaluating how the network can support and benefit new partners may also turn into a whole new business opportunity for the entire network.  This is one of the soft benefits of the partnership; the potential to develop additional business opportunities for the partners.


And now for the audience participation portion of the show…


Have you evaluated your partnership network to identify how together you can mitigate and reduce business?  What factors and questions do you incorporate in evaluating and selecting partners for your collaborative network?  How can you incorporate your partnership network to help to mitigate risk?  Are you open and have your offered to support your partners in mitigating their business risk? 

Business risk can come in many shapes and forms resulting again from various influences and activities that interact with your business.  Risk can seem to occur unexpectedly however I think that investigation and review of past events show that there are normally warning signs that predict the event.  The challenge then is watching to identify the risk prior to the occurrence of the event so that you can limit, or even eliminate the impact on your business.  There have been many methods and successful consulting practices built on the identification and mitigation of  risk and this is not the subject of my discussion.  I see a great opportunity to incorporate your collaborative partnerships into your risk mitigation methods and plans.  I see that your collaborative partnerships can have a dramatic and critical impact on the success of your risk mitigation actions.


The prevalent method, and reason to enter into a collaborative partnership is obviously the benefits that can be realized by the partners.  Another aspect of the value proposition is the positive impact on mitigating risk that can be realized through the collaborative partnership.  I believe this positive impact on mitigating risk across the partnership can be equally as valuable as a reduction in cost or an increase in sales.  This positive impact on risk mitigation and literally make the difference between the success and failure of your business.  The impact of the collaborative partner on mitigating risk should be incorporated as a critical aspect to your partner selection process. 


Furthermore I think that one aspect of developing a risk mitigation plan should focus on identification and developing strategic collaborative partnerships to mitigate the risk.  This evaluation process in a way turns the business threat evaluation process on its head.  First you should identify the threats and the risks to your business.  Second, rather than developing a plan to internally develop means to address the threats and risks, my suggestion is to identify and then engage potential partners that can address the threats and risks.  When you step back to evaluate your threats and risks I think you will find that many of the key threats and risks are related to competitors and their impact on your business success.  Why not turn this process from an internally focused exercise to an externally focused exercise?


This practice will be especially important to small and mid-sized companies where the resources (financial and people) may not be readily available to mitigate the threats and risks.  Take a look at your business and what are your concerns and challenges and they review the business landscape for the businesses and people that are successful in overcoming your threats and risks.  Rather than mimicking their procedures, why not partner with them?  I think you will find that your strengths in many cases will compliment their weaknesses and that developing a collaborative partnership will benefit you both.


And now for the audience participation portion of the show…


Have you discussed with your leadership how to select the type of relationship to enter into with a new potential partner?  What questions do you answer in order to determine the model?  Do you re-evaluate your relationship on a regular basis in order to revise the relationship?

tbrouill

Managing Risk

Posted by tbrouill Aug 15, 2014

Risk mitigation and management is a critical aspect of business continuity and especially in the extended supply chain that supports the business.  Risk mitigation and management is also a critical aspect of collaboration and partnership that can and should be engaged to address the challenges encountered on a daily basis.  Risk is not just the ‘black swan’ event that manifests itself on a periodic basis, risk is also and more importantly the ‘potholes’ you encounter on a regular basis in the management of the business.  It has been proven time and again that the best means to manage and mitigate the risk is to define, evaluate and develop mitigation plans to address the risk if an when it does occur.


I will focus in this discussion on managing the risk as it pertains to the collaborative partnership.  Collaborative partnerships can dramatically increase your ability to quickly and efficiently mitigate risks and they can also add additional risks to the mix of your daily activities.  Let me focus first on the first point, the ability to quickly and efficiently mitigate risks.  First of all I think that one of the key driving factors of risk is the unknown and this is the result of many factors such as the unknown if a supplier will be unable to provide raw materials, or reaction and ability to support a change in regulation or volume, or a dramatic weather or other natural disaster type event such as hurricane or earthquake.  The events that are driven by the human or business related unknowns can be evaluated and potentially resolved through a focused initiative while the natural events must be recognized and addressed through contingency plans that define your plan to execute when they occur.  The planning for natural events is important because they will arrive as somewhat of a surprise for the most part.  The human or business related events however can dramatically reduce or eliminate the risk  through planning and business agreements.


This is where your collaboration and partner agreements come into play.  These agreements will provide the means to clearly define the steps that will be taken in the event of one of the many business events that can and will occur on a regular basis.  Prior to entering into a partnership one of the critical steps is to define the partner agreement which defines the boundaries and rules that will support the partnership.  I suggest that you add a risk management discussion and section to your partnership agreement activity.  The key to success is planning and planning for risk mitigation will reduce the impact of the risk when it manifests. 


I think that another beneficial result of the risk mitigation exercise is determination of additional partners to add to the partnership.  I think in your exercise there will be business risks that you identify from both sides of the partnership and some of these risks will require outside support to mitigate.  When you identify these types of risks you can then search for the appropriate partner that can help you mitigate that risk.  This will increase dramatically the value of the partnership to all members.


And now for the audience participation portion of the show…


Have you discussed with your leadership how to select the type of relationship to enter into with a new potential partner?  What questions do you answer in order to determine the model?  Do you re-evaluate your relationship on a regular basis in order to revise the relationship?

tbrouill

Outsourcing in Disguise

Posted by tbrouill Aug 13, 2014

Collaboration may have become a hot trend in business and industry circles.  Another very popular trend is the use of partners and partnership.  I think though that for many organizations these terms have been repurposed to describe their existing client / service provider relationships.  This repurposing is blurring line, or more accurately blurring the definitions of the terms collaboration and partner.  I have seen and been on both sides of the line in these relationships and very often I quickly realize that many organizations and especially large organizations have redefined these terms in describing their relationships with service providers. 


As I’ve previously discussed the definition of collaboration is working with each other to do a task and to achieve shared goals.  The definition of partners, or partnership is a person who takes part in an undertaking with another or others, especially in a business or company with shared risks and profits.  You can see from both definitions that there is a focus on sharing whether they share goals, risks and profits depends on the initiative.  The key though is sharing with a person or another organization.  This sharing act is where I think the difference between definition and actuality is focused.  In reality I think that most companies, and especially large companies enter into the relationship with the attitude that they are more than willing to share as long as the other side of the relationship accepts their goals and risks as their own.  The profit part of the definition does not generally enter into the equation in many companies entering into a collaboration or partner relationship with another company or organization the profits are never included in the relationship.  I would say that the profits side of the relationship is generally accepted as the charges that a service provider negotiates to perform the services desired by the customer.  Does this sound familiar in your business relationships?


Way back in the 1980’s and 1990’s a trend took hold in employee relations and companies started calling their employees ‘associates’ in an effort to highlight what these companies project as the importance of the relationship.  In this definition, these people that worked for the company were not just employees, they were associates and the company valued their opinion.  The reality of the relationship did not change however, the employee performed the exact same duties and had the exact same input in the running of the company, the company simply changed the name from employee to associate and in doing that changed the definition of associate. 


I see that most companies and especially large companies are taking the same approach with collaboration and partnership.  In other words, they are still engaging in a client / service provider relationship and they redefine the terms partner and collaboration.  This is can be overcome though with regular evaluations and adjustments to the relationship and agreements.

 

And now for the audience participation portion of the show…


Have you discussed with your leadership how to select the type of relationship to enter into with a new potential partner?  What questions do you answer in order to determine the model?  Do you re-evaluate your relationship on a regular basis in order to revise the relationship?

I have seen many relationships that profess to be partnerships that are not based on the accepted definition of partnership.  The accepted definition of partnership from wikipedia is an arrangement in which parties agree to cooperate to advance their mutual interests.  The key in the partnership is the simple phrase ‘to cooperate to advance their mutual interests’.  In many and possibly the majority of relationships I see this phrase to be the most difficult to implement and actually embrace.  I think that may in not most relationships profess to be partnerships and when you compare the actual relationship to the accepted definition you will find that the relationship actually leans towards an outsourcing for services relationship.


The acceptance and implementation of a partnership model really is what I believe defines the maturity level of an organization.  This is the single greatest factor to the acceptance and implementation of a true partnership that embraces the need for mutual benefits to gain the greatest success.  This single factor drives the greatest level of benefits and yet is the most difficult to maintain due to the historical practice of command and control.  Many relationships and participants pay lip service to partnership and yet when you honestly evaluate the relationship and especially the key points of cooperation and mutual interests or benefits the result is a realization that most relationships mistakenly are referred to as partnerships.


It is easy to understand this misunderstanding and I think that many people and organizations truly believe that they are engaged with a partner, or have developed a partnership when in actuality they are engaged in outsourcing for services.  A partnership can be difficult to develop and even more difficult to maintain and grow.  It requires overcoming some business practices that have been embraced and encouraged over the years until they are part of the culture of business practices and relationships.  This competitive approach to business relationships however will hold the organizations back from even greater accomplishments form partnerships and especially collaborative partnerships.


The accepted definition of collaboration is working with each other to do a task and to achieve shared goals.  I think that you can see that collaboration and partnership is a natural combination or more accurately they enhance each other.  However they are at odds with the generally accepted practice of business which is competition.  This is exactly the reason why collaborative partnerships are so difficult to achieve and maintain.  This is exactly why I suggest that the relationships must be regularly evaluated for both adherence to the definition of the model and also for areas to improve and extend the partnership.  The regular evaluation will allow the partners to ensure that they are adhering to the concepts and that they do not stray from the concepts.  I am afraid that without this regular evaluation and resetting of priorities that the partnership will drift into the outsourcing model without realizing it.

 

And now for the audience participation portion of the show…


Have you discussed with your leadership how to select the type of relationship to enter into with a new potential partner?  What questions do you answer in order to determine the model?  Do you re-evaluate your relationship on a regular basis in order to revise the relationship?

It is important to evaluate the type of engagement model you select when developing a new relationship with a new organization.  It is also very important to reevaluate this engagement model on a regular basis, regular should be defined as a period of type, or even an event that may occur that causes the need to evaluate the engagement model. I suspect, however, that many people and organizations misunderstand the difference between the outsourcing and the collaborative partnership model.  I fear that many organizations have started to use the terms collaboration and collaborative partnership for all engagement models because it has become a popular phrase in the business trade discussions and publications.


I feel that there is a level of organization maturity that is required in order to develop a collaborative partnership that is not required for outsourcing.  The outsourcing model follows the classic customer / service provider model where the customer identifies and retains service providers that claim to provide the requested service.  This model fits in very nicely with the classic command and control practice that has been prevalent in business for generations. In this model the customer engages with a provider of the service and simply measures the quality of the service against the cost of the service.  In this model the criteria are very straight forward in a supply and demand model.  The customer engages and as long as the supplier provides the service at a cost and quality level desired by the customer both sides feel successful.


The collaborative partnership model requires a greater level of organizational maturity in order to get past the classic customer / service provider, or command and control, relationship.  The collaborative partnership requires that each partner allow and accept the leadership to be provided by the other partners based on the capabilities of the partner and the requirements of the objectives.  In addition, this leadership is not the classic command and control type of leadership but a guidance and suggestive type of leadership.  This is what I refer to as collaborative leadership, a suggestive and open type of leadership that encourages engagement and participation from the partners.  This type of leadership requires a greater level of maturity in the organizations and partners in order to accept the guidance from partners, it requires the realization and acceptance from the partners that someone else may be better able to guide the delivery of the objective.  The second trait of the collaborative partnership model is the acceptance of a mutually beneficial value model.  In other words, each partner embraces the concept that the value of the partnership is greater when all partners gain from the relationship and more importantly each partner embraces the concept that sometimes the individual must give more, or gain reduced or no benefits in order to increase the overall value of the partnership.


I view the differences in the models to come down to a simple test; a collaborative partnership encourages engagement and requests input and guidance from the partners based on their experience and capabilities.  The outsourcing model is based on the command and control model where the customer simply defines the requirements of the relationship.  The value of the collaborative partnership is much greater over the long term and also allows and encourages the growth and benefits of all partners in the relationship.   

 

And now for the audience participation portion of the show…


Have you discussed with your leadership how to select the type of relationship to enter into with a new potential partner?  What questions do you answer in order to determine the model?  Do you re-evaluate your relationship on a regular basis in order to revise the relationship?

I’ve been thinking about how collaboration has been increasing in acceptance over the last couple of years and this has gotten me to thinking about how it is comparable to the early days of outsourcing.  GE was probably the most famous for outsourcing in the early days and quickly became the poster example of the benefits (focused on cost) that could be achieved through outsourcing.  We seem to be following a similar trajectory for the popularity and acceptance of collaboration.  Both the collaboration and outsourcing models can provide benefits to the organization and network and in addition, you should not think that both of these models are mutually exclusive.  The increase in popularity of collaboration should be viewed by the strategic thinker as another tool in the toolbox that should be used based on the need and the objective of the initiative.


There are some objectives or services that after evaluation may be perfect candidates for outsourcing and others the would be perfect to support by developing a partnership relationship and collaborating within a network.  A good example of an activity that might make sense to outsource is printing, or janitorial services. 


There are some objective or services that after evaluation may be perfect candidates for developing a partnership to collaborate with another organization or even network to achieve the benefits. In the supply chain network I think a great candidate for developing a collaborative partnership is transportation.  Developing, or joining, a  network of transportation providers is a great method to ensure the most efficient means of delivery for all of the partners involved.  This would allow you to traverse from ocean to rail to truck to utilize the most efficient method for the need and the partnership supports the members in sharing and coordinating from origin to destination. 


There are some objectives or services that seem to straddle the fence between outsourcing and a collaborative partnership.  These are a hybrid service or example where it might make sense initially to outsource to the provider and after a period of time you determine that developing a collaborative partnership would increase the value to both organizations.  Again in the supply chain network a good candidate or service that could start with outsourcing and develop into a collaborative partnership is 3PL fulfillment.  As an example when an organization is just starting out it make sense to contract with a 3PL provider to handle all of the fulfillment or logistics, then as the organization grows and develops they would naturally grow into a partnership model where the benefits could be shared.


The point of this discussion is that you should evaluate the type of relationship you enter into with another organization just as you would any other objective to determine whether the objective would fit the outsourcing or the collaborative partnership model.  You should regularly evaluate the decision based on how the relationship and the needs have matured and changed. The decision that makes sense today may not make sense in a year or two or ten.  Outsourcing and collaborative partnerships are additional tools in your toolbox don’t fall into the trap that one tool fits all needs.

 

And now for the audience participation portion of the show…


Have you discussed with your leadership how to select the type of relationship to enter into with a new potential partner?  What questions do you answer in order to determine the model?  Do you re-evaluate your relationship on a regular basis in order to revise the relationship?

The flip side of the collaboration coin I believe is outsourcing because the outsourcing model definition is a client engaging or contracting with another party to provide services.  When I think about the outsourcing model I think of it as a type of client / service provider relationship or engagement.  Where the collaborative partnership model is based on developing a mutually beneficial relationship, on the opposite of the spectrum I believe you have the outsourcing model of pay for services.  Theoretically both of these models can coexist within one overarching model.  There are, however, pitfalls to both models that must be recognized and accounted for so that the greatest value is derived for the organizations’ customers. 


I see the collaborative partnership model as very closely aligned to deriving value for the organizations’ customers.  The partners in this model are focused on two types of customers; their direct customer and their partners’ direct customers.  This can be a very powerful model in the business world because this focus on the customer then will extend from the beginning to the end of the supply chain, or the business relationships.  This focus doesn’t just miraculously occur, it must be measured continuously across the partnership in order to maintain and derive value.  This measurement must be carefully monitored and nurtured across the partnership because this becomes the life blood in maintaining a robust partnership. 


This cross functional measurement is a very important concept that I believe is overlooked in many if not most outsourcing engagements until it is too late.  I think that this oversight is due to the client / service provider, or pay for services, type of relationship.  I believe there is a tendency to focus on cost reduction in outsourcing relationships, to the detriment in many cases to the organizations’ end customer.  The danger of this type of model is what I would call death of a thousand cuts because your service to the customer degrades bit by bit, each time without ‘significant’ impact to the customer until you reach the point of no return or significant business loss.  This customer failure while then cause a flight of customers to other options.  A monopoly of service or product can mask this failure and actually cause unforeseen options to develop.  Remember there is always an option, no business is every a complete monopoly and their disregard for the end customer because they believe there is no other option will contribute to their eventual failure.


Cable service providers are I believe a classic example of outsourcing run amok without regard for the end customer.  I recently moved and am in the midst right now of working with Time Warner Cable ( #TWC ) to install new service.  For my personal experience this has become a spectacular failure in customer service that is the direct result of outsourcing run amok.  The issue that I see is that each silo within the organization wants to help the customer and portrays this desire to the customer, however there is no accountability, or organizational follow through across the silos and outsourcing organizations.  I have been told no less that five times by fives different representatives that they will resolve my issue that they have submitted my request for resolution and someone will call that day, or within the hour even, to confirm the resolution and guess what, the only return call that I have received to-date was the recorded ‘you have an appointment’ message.

 

And now for the audience participation portion of the show…


Have you discussed definition and measurement of standard metrics with your collaborative partners?  What methods have you identified and incorporated to encourage participation?  Have you incorporated a standard that your metrics can support across the partnership network?

I’ve previously discussed the differences between the concepts of partnership and service provider as they pertain to the business world.  Now I want to discuss the partnership model and why it is important to embrace this model in developing a robust collaborative partnership network.  While a partnership model may be easy to define and understand it does seem to be very difficult to embrace.  Simply put a partnership model can be defined as a practice in which the parties agree to cooperate to advance their mutual interests.  This is one of those concepts that is difficult to embrace I believe because of the long ingrained business model and practice of client / service provider.


This client / service provider model has been the dominant model in business relationships for a long time and as such this practice has become second nature and part of the normal business practice for many people.  Think about your professional relationships for a bit and compare them the definition of a partnership I provided above.  My guess is that after an honest evaluation there is a very good chance that you will identify the majority of your business relationships as the client / service provider type. The practice is commonplace and so it would be unusual if your evaluation came up with a different response.  This is important to understand and to define your baseline of where you are starting in order to define the actions to achieve a partnership relationship as your baseline.  If you go into a gas station to fill your take it is perfectly acceptable to treat this as a client / service provider relationship.  In the majority of your business relationships however I think it is desirable to develop the partnership relationship.


Think about the logic behind the business relationship for a moment and I believe that you will see the logic in embracing the partnership model.  You enter into a business relationship to take advantage of the other party’s expertise and capabilities for a particular function or process, why would you then expect to gain benefits if you then tell this business party how to perform the function or process?  I hope that you can see the folly in this practice for all but the most basic services.  The benefits to each party can be turbo charged by putting into place a mutually beneficial practice that comes from the partnership model. 

 

The partnership model requires a change in attitude along with a change in your business relationship practices.  The change in attitude requires that you eliminate the command and control practice that results from the client / service provider model.  This is a very difficult practice to overcome and must be practiced every day until it becomes second nature in your attitude.  This re-learning of new practices will require the support and understanding of the members of your network so they can also help to develop the new mutual benefits practice in business relationships.  This can be the starting point of your relationship with your collaborative partner network, remember though, rather than demanding of your partners that they must employ a partner model you should start by suggesting and requesting participation of the partners to develop this relationship.  You cannot order someone to be a partner, you must request it of them!

 

And now for the audience participation portion of the show…


Have you discussed definition and measurement of standard metrics with your collaborative partners?  What methods have you identified and incorporated to encourage participation?  Have you incorporated a standard that your metrics can support across the partnership network?

Leadership in a collaborative partnership network is very different than leadership in a company or a large organization.  As I’ve previously discussed, leadership in a collaborative partnership is given by the partners within your network and should only be given for a specific initiative and for a predetermined period of time.  In the case of an initiative this predetermined period of time would be the length of the initiative.  The partnership network must come together to elect, or select, a leader based on the consensus of the impacted or participating partners.  The partnership network, in other words, is a federation of members that elects a leader for the purpose of a specific action rather than a specific leader of the partnership guiding for the life of the partnership.


This concept is critical to the life and longevity of the partnership network because it encourages the members to participate. This concept of leadership by selection is quite different than the organizational leadership model which is more command and control.  This is a hurdle that must be overcome or it will lead to class from partners that can destroy the partnership.  The partnership network and members must also understand that this concept is can be so foreign to members that is will cause them to drop out of the partnership network.  I see this concept as the most difficult for some members to embrace and a leading cause of failure of the partnership network.


I see this concept of elected and limited leadership having the potential to profoundly impact the currently accepted business leadership model by opening the leadership up to more open evaluation or at least more open question of authority.  If a partner member enters into the collaborative partnership network with the unspoken belief that they are the leader of the network, or that their views and priorities are more important than other members in the network they will quickly have problems with the network and most likely leave the partnership network.  I think the interesting point is that the network will quickly help members to define and even enforce the requirements of partnership over a network of service providers.


The network will gain and reap the value from developing the robust partnership relationship that is encouraged by the network and the members that do not embrace the partnership model will at a minimum not achieve the same value and most likely eventually leave the network, either by their own decision or invitation from the other network members.  This is comparative to building a team and going through through the storming phase of team building.  This is a necessary step in developing the partner network and everyone must understand from the beginning that there will be conflict that must be overcome to achieve the potential of the network.


There will be additional ramifications of developing the this type of partnership network a relating to business leadership.  The question is how will this impact the current business leadership paradigm?


 

And now for the audience participation portion of the show…


Have you discussed definition and measurement of standard metrics with your collaborative partners?  What methods have you identified and incorporated to encourage participation?  Have you incorporated a standard that your metrics can support across the partnership network?

tbrouill

Collaboration Metrics

Posted by tbrouill Aug 1, 2014

In order for collaboration governance and your collaboration framework to improve and grow in strength you must have a means to measure the performance and quality of the activities, from the process efficiency through the quality of execution and through the financial cost and benefits.  One of the core concepts to improvement, whether its in the products, in the operation, or in the extended supply chain is the ability to measure through meaningful key performance indicators.  This measurement provides the basis for your continuous improvement process which, in turn as I’ve previously discussed, provides the basis for your partner engagement and participation.  Lean or six sigma practices are based on measurement and these practices must be fully incorporated into your collaborative partnership framework in order to be success and continue to grow.


Let me get into the concepts of metrics and standards for a moment because I believe they are denegrated sometimes because of a lack of understanding or more precisely, a poor implementation.  Standards when well done are not restrictive. They tell you the what but not the how. For example, the standard requirements specify you need metrics but not which metrics and how to apply them. Research has shown  that high performing organizations have metrics, and these high performing organizations tend to manage them more rigorously than non-performers.  In addition, these high performing organizations also tend to measure strategic outcomes, which would indicate that a metrics model is important to have in the standards. Specific metrics are highly dependent on the objectives of the organization and the state of maturity of the organization and must be defined by the practitioners.


Your extended collaborative partnership network is another type of organization, it is more flexible and and open in participation however which makes it a little more challenging to institute the metrics and standards model.  The challenge is brought about by the need to define meaningful metrics across the participants.  This, I believe, should be looked upon as a cafeteria approach to measuring the metrics because the metric must be meaningful for the partner.  A transportation company would need to measure on-time delivery but a manufacturer would measure the completeness the delivery to the plant as an example. The partnership network must institutionalize the metrics so they become part of the fabric of the network framework.  A very effective manner to do this is certification to the standard.  Certification to the standard requires that the practitioners have thought things through and documented their metrics model based on what makes most sense for their collaboration. This allows the partnership network to measure the model and make improvements through a continuous improvement model.


When organizations come together with the same vocabulary and a process model, they can implement the details, or the how, much more quickly and frictionlessly. Which was what I hope the standard promotes versus a restrictive process that is viewed as bureaucracy.  The challenge to your collaborative partnership network is to overcome these two hurdles, common vocabulary and standard metrics, to develop a model that can support the engagement of the partners to meet the network’s strategic objectives.


 

And now for the audience participation portion of the show…


Have you discussed definition and measurement of standard metrics with your collaborative partners?  What methods have you identified and incorporated to encourage participation?  Have you incorporated a standard that your metrics can support across the partnership network?