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?