Strategic partnerships? Time to step up.
“If you want to go quickly go alone, if you want to go far go together”
We all have them. Partners.
Some carry a contractual relationship, others are built on personal empathy and trust. Strategic partners carry an even more valuable label. They are those partnerships that are two way, collaborative and transparent.
The PwC 19th Annual CEO Survey suggests that nearly half of global CEOs expected to make strategic alliances in 2016, and that establishing new alliances was up there with cost reduction initiatives.
Why would they say this?
I suspect it is combination of two events.
Firstly, the lure of being digital Is stretching the capability of the organizations’ and their partners’ to operate in two speeds — the run rate ‘tanker’ get the job done mode, and the‘ speed boat’ do something better and faster mode. Such dynamics creates high trust at the start but over time, the natural gap in capability and requirement definition lowers trust and chips away at the ‘strategic partner’ label.
Secondly, the type of partner needed to support the organization is calling for different human relationships that rely now more on senior management empathy, closer transparency on respective business plans and clearer communications through a relationship matrix. For many this flies in the face of traditional supplier type relationships where ‘keeping things close to one’s chest’, and ‘sticking to the contract’.
But isn’t this just a rerun of what we all know about doing business with suppliers’ and partners’. Is this just a newer version of what makes the world go round? Or are people now beginning to challenge the partners’ in their ecosystem with questions such as:
· Do I have the right ones? What does right in fact mean? Price? People? Brand?
· How do I change the tempo of who I work with, and can they step up?
· Is my partner just too tactical for my needs today but not able to be strategic tomorrow?
· Will I succeed with them, or is there someone else I need in the future?
· How can my partners’ connect me to other partners’ I can trust?
· Are my goals clearly understood by the people across the deck from me?
· How does my partner create joint value? Do they contribute to my business direction?
Of course a partnership only means something if there is an exchange of mutual knowledge unique to help both parties. For example, access to new/emerging technologies and strengthening innovation ideas. Access to new geographic markets to open up new customer opportunities, and a way to strengthen brand and market valuation.
Consider a builder of a house or an office block.
Whether it is domestic or commercial property the construction industry is no doubt on a fast path to maturity, driven by us — consumers.
This industry is awash with supply chain challenges ( data and process to name two ) that tests the word partner to extraordinary levels, and ultimately has created a low level of trust. Failure to understand requirements, delays in delivery, poor business processes that create more cost, lack of outcome based thinking and inability to ‘put skin into the partnership’. Time costs money etc, and supply chain in the construction sector is perhaps one of the most frustratingly slow at change.
With the digital tools now available reducing time to market from design, fabrication, build and fit out, the construction supply chain and the ancillary sectors that harvest business therein, is undergoing a makeover. And the outcome is not insignificant. In the UK alone, the construction sector contributes in the UK alone £95Bn to the UK PLC each year)
Which is why the news that there is a growing group of companies’ in the UK looking to codifying their capabilities to create, manage and develop strategic relationships with their supply chain and customers. (https://www.bsigroup.com/en-GB/about-bsi/media-centre/press-releases/2017/march/First-six-companies-certified-by-BSI-to-new-international-standard-for-collaborative-business-relationships-/ )
Called ISO44001 Collaborative business relationship management systems — requirements and frameworks, these organizations’ are developing their skills on how to get better at doing ‘strategic relationships — from identifying, developing and managing collaborative business relationships within or between organizations’.
The early adopters’ of the standard are not surprisingly largely in the construction and FM sector, suggesting that the complexity of long cycle contracts’ for design, build, run of a built asset are benefiting from a more transparent and empathetic relationship. And given the economic impact of infrastructure and buildings to the way we do business as a race, I suspect more and more organizations’ will follow suit.
It is about trust.
I am not advocating we all rush out tomorrow to achieve the ISO standard, but I am suggesting that a ‘stop and think’ moment could reap benefit as a checkpoint on whether your partners’ are ‘strong’ enough. Or whether the way you engage your partners’ demonstrate the best possible approach to maximize success for all.
At the end of the day, we all know trust makes the world go round or as Mr Stephen Covey articulated “Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships”.
Well said Sir!