Thursday 23 November, 2006
In this article we will explore the constraints that need to
be overcome to build long-term collaborative relationships. We will
also propose frameworks that can empower both parties to navigate
divergent views and manage obstructionist behaviours.
What we achieve comes from how we go about it!
The complexity of networked business communities, generational changes
and the emphasis on intellectual capital over physical assets is
elevating the need to give many stakeholders a decision-making voice.
These changing environments can cause decisions based on positional
power to be less effective and risk shallow, short-term transactional
behaviours. The type that drives each party to focus on getting the most
for themselves, rather than to act in the best interests of the
relationship and contract.
New approaches are needed and an increasingly attractive alternative is
to build collaborative relationships that promote value creation for
both parties. This requires decision making to produce longer lasting
and more equitable relationships that are underpinned by shared
interests and mutual gain.
The use of these frameworks can reduce the associated costs and
adversarial nature of transactional relationships, and enable both sides
to have more predictable outcomes and a culture of cooperation.
For those accustomed to using their positional power, a move to a
collaborative and consensus seeking approach can be confronting. The
behaviours evident in collaborative relationships contrast widely to the
transactional behaviours, shown below.
"If we had realised the contract's success came from the strength of our relationship and common understandings, we would have given more thought to how we made them feel".
Using collaborative principles to underpin the relationship
To prepare for a collaborative relationship it is important to separate
the desired outcomes from how the relationship will be managed.
The key resource for influencing others is to build strategies based on a
full understanding of needs and personal motivations. The failure to
understand the other party's needs is a major reason why relationships
are unsuccessful and one party can sometimes feel aggrieved.
When we consider our needs alone, we are dealing with only half of the
relationship's equation. Once you have clearly identified the needs of
the other party, it becomes much easier to align your needs and identify
common ground that can create shared values, cooperative behaviours and
a more sustainable relationship.
An effective way to sustain the relationship is by developing a set of
collaborative principles that define how the relationship will be
managed. They can become a foundation for policies and the agreement's
governance framework. They also give everyone involved a voice and a
more structured and transparent communication process.
Six key collaborative principles
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Agreements formed are long term and procedural rules are transparent and unambiguous.
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Agreement building is inclusive, avoids bargaining and values the collective knowledge and skills of both parties above perceived status.
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Information-sharing boundaries are agreed in order to create value.
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Communication exchanges build trust through verification and by preserving esteem through face-saving options.
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Issues are framed mindful of the long-term impact on the relationship and to reflect the opportunity for mutual gains and or mutual losses.
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Power imbalances are diminished by both parties seeking value creation ahead of value claiming.
The rigor and relevance of these principles comes from the contribution
of both parties and their acceptance at each level of negotiation. These
principles are particularly valuable where there is an ongoing need to
manage diversity, that is accompanied by differences in values and
style. An example is when a culture of tolerance is needed to manage
religious, gender and generational differences.
In collaborative relationships, contract price becomes secondary to
long-term mutual gains and negotiations that manage conflict and draw
out all the issues to create value are the norm.
Making the change
When moving from an existing contractual relationship into a long-term
collaborative relationship, you are likely to hear the question, "Isn't
this more of the same?".
One of the first changes felt, is the continual referencing of the
collaborative principles and the suspending of judgements to enable
perspective taking from both sides.
As those involved start to detach from what is familiar, their
obstructionist behaviour diminishes and they begin to test the
boundaries and meaning of working differently.
They become aware there is more to be gained by connecting organisations than behaving like silos.
As previously unrecognised problems are identified, there becomes an
opportunity to create differentiated products and services that raise
customer satisfaction levels. As this adjustment continues, people start
to observe deeper relationships and find it more intuitive to examine
problems from a joint perspective.
The anxieties that had been felt earlier are replaced by feelings of
empowerment to implement solutions and the desire to acquire new skills
and adapt to new ways.
The changes are imbedded so that each side willingly relinquishes the
past and comes to realise the shallow and positional relationships have
been replaced. Gone too are the recurrent costs associated with
unpredictable, one-off relationships. Instead, each side gains the sense
of empowerment that cames from being part of a more predictable and
ongoing relationship.
A framework to collaboratively negotiate
A key element of any long-term relationship is that it offers procedural
fairness and trust at manageable levels of exposure. This means having
transparent processes that show how and where decisions are made, the
procedures used and how the results are disseminated.
To communicate, negotiate and manage conflict more effectively
procedural fairness can be managed and paced through six communication
steps. These can be paced to cover all issues simultaneously or a single
issue.
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The Prelude
Typified by converging views about what might be possible and collaborative behaviours. This stage puts into place the process that lets each side discover if their needs can be satisfied.
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Discovery
A focus on surfacing the issues and understanding the preferences each side holds. As views become divergent and tension rises, it is important to manage the conflict by applying the collaborative principles.
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Problem Solving
Both sides focus on creating options that provide mutual gain and that are better than what could be created without each other.
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Decision Making
Each side confirms the decision making criteria and that they have a mandate to make binding decisions. Impasses are navigated and agreement is reached by exchanging low cost high value concessions.
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Performing
Earlier commitments become actions and compliance monitoring and enforceable contingencies increase the likelihood the intended outcomes will be achieved.
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Evaluation
With stakeholder involvement there is a focus on how the relationship is working and an assessment of the value that has been created or the reasons for an inequity in the relationship.
Keeping the relationship productive
To ensure the relationship is productive, it is essential the
relationship's desired outcomes are known and achieved. A useful way to
bring clarity and responsibility to the desired outcomes is by
establishing a Contract Governance Board. This involves representatives
from both sides determining the strategic outcomes and responsibilities.
These can include:
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Strategic direction and understanding of each party's business model, priorities, constraints and business processes.
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Determination of decision making responsibilities and procedures.
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Establishment of risk/reward metrics and responsibility for financial performance.
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Establishment of guidelines for sharing infrastructure, such as facilities and IT, whether owned or outsourced.
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Assessment of customer satisfaction with product/service quality, market reach and technology capability.
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Assessment of the relationship's ability to achieve milestones, be innovative, deal with conflicts about contractual obligations, and the failure to disclose information and share ideas.
Collaborative relationships rely less on positional power, they encourage new thought leaders to emerge and create value through their know-how and ability to influence.
Source:ceoonline.com
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