In last weeks post, ISO 44,001- Is Collaboration Essential to Future Outsourcing Success? I set out in the importance of new ways of working from a collaborative standpoint. This week I want to dive into the recognition that all relationships have a collaboration life cycle. This is at the heart of the standard and illustrates what at first might seem counterintuitive. The strength of the collaborative partnership lays in the understanding of how and when the relationship has fulfilled its objectives and how the two parties will agree to dismantle the partnership.
A collaborative partnership needs to go through a life cycle and it is the recognition that the relationship may have a finite purpose to resolve. Once that purpose has been achieved both parties pre-agree to reassess the relationship and if so required, exit in a planned and considered manner. This pre-nuptial agreement has the most significant impact in strengthening the collaborative output.
The introduction of ISO 44,001 Collaborative Business Standard is an important document to structure these relationships across both internal and external collaborations, between customers and suppliers as well as potential mergers and acquisitions.
In the Facilities Management industry where business relationships are measured in years rather than hours or days, Customers and suppliers are expressing more and more often the desire to form collaborative relationships, alliances and partnerships. It is regrettable that little is being done practically to implement these lofty ideals and the standard offers us a chance to rectify this shortcoming.
Collaboration between organisations is far more complex than that between individuals. Until the publication of ISO 41,001, there has been no common language, framework, no shared best practices and no tested methodology to enable mutually beneficial initiatives to thrive.
The flippant use of words such as partnership, collaboration, alliance understates the complexity of entering into a truly productive and effective relationship with a customer or supplier.
So what are the most important things to understand before you embark on this journey?
Initially, the standard may feel repetitive even clunky and awkward. However, the strength of the process is in the structured step-by-step approach, which will feel more intuitive as you acclimatise.
The framework is flexible and so implementation will not be the same for each business or each relationship that an organisation enters into. It’s important to understand that collaborative excellence is a journey not a destination.
Like most large change management initiatives it falls upon the leadership to set the direction and to tune the company into the implications of the management of the business relationship life cycle.
The life cycle of collaboration recognises a sequence for implementation of the framework over in three principal areas of Strategic, Engagement and Management with a total of eight distinctive best practices steps.
A collaborative partnership needs to go through a life cycle and it is the planned exit agreement that has the most significant impact in strengthening the collaborative output. Click To Tweet
1. Operational Awareness
It is important to establish at the outset that not every relationship that an enterprise enters into will benefit from entering into a truly collaborative relationship. It is essential to ensure that considerable effort is only focused on those relationships that will deliver real value.
Duties of Senior Executive Responsible
The role and duties of the Senior Executive Responsible (SER) for the collaboration will need to be agreed as early as possible. For practical reasons these responsibilities may be delegated.
Application and Validation of Operational Governance Structure
The SER will need to ensure that any internal policies and processes that need to be varied to ensure the collaboration efforts are executed in accordance with internal governance procedures.
Identification of Operational Objectives
The key to success of any collaborative approach is the alignment of the initiative with the pre-agreed business objectives.
Establishment of Value Analysis Process
The establishment of a robust value and analysis process will assist to ensure that the collaborative approach is only undertaken where the most significant extraction of value can be achieved over more traditional methods of contracting.
Identification and Prioritisation of Collaborative Business Relationships
The continuum along which strategic requirements and relationships are formed are many and varied. How organisations differentiate their relationships and focus will also vary.
Verification of Collaborative Approach
It is crucial to understand the motives behind the parties approach to a collaborative relationship. If these are not recognised then opportunities may be missed and the risk profile raised.
Planning for Operational Collaboration
Before venturing into specific collaborative developments is it crucial to plan how such approaches will be integrated into day-to-day operations.
Development of Competencies and Behaviours
The required capability and skills for operating in a collaborative relationship will challenge many individuals. It is essential to understand what skills are available and what development may be necessary.
Initial Risk Assessment
Collaborative approaches will likely introduce new risks that need to be identified and managed.
Establish Relationship Management Plan (RMP)
Good relationships do not necessarily make effective collaborative partnerships. It is essential that a formal Relationship Management Plan (RMP) be crafted and established.
Adopting collaborative approaches to partnerships requires significant investment from both parties it should, therefore, be focused where it offers the most benefit. To fully exploit the potential of the collaborative arrangements the drivers, risks and pressures need to be fully understood and addressed.
Strategy and Business Case Development
Developing an effective strategy that delivers a sound business case is challenging. The need to meet mutual business objectives and expectations requires defining the key parameters and process of collecting and validating the approach.
Identification of Specific Relationship Objectives
In addition to the identification of business objectives the rationale for seeking external collaborative Partners needs to be well understood, particularly where such relationships may require changes to standard internal operating functions.
Implementation of the Value Analysis for a Specific Opportunity
It is advisable to undertake an initial value analysis to ensure there is sufficient potential value to be obtained through a collaborative approach in relation to the associated investment and risks.
Identification of Potential Collaborative Partner Organisations
Suitable partners may come from existing relationships, but in many instances, partnership potential may evolve from a stated desire for such a partnership and an agreement to work together.
Development of Initial Exit Strategy
The early consideration of the circumstances under which either party will disengage from the relationship is an essential component.
Identification of Key Individual’s Competencies and Behaviours
It is important to put the emphasis on selecting and developing those individuals with appropriate competencies and behaviours that will lead and support the collaborative approach.
While knowledge is power, the ability to share and leverage collective knowledge is one of the most significant benefits of the collaborative approach. Sharing such information can create challenges for many organisations, but this needs to be resolved and approached early to avoid conflict later.
Supply Chain and Extended Enterprise Threats and Opportunities
As with knowledge management, the harnessing of a potential partner’s supply chain should be considered, regarding the benefits and risks.
The development of a strategy must be linked to the creation of a risk management strategy that addresses the concerns of all parties, together with identifying a mutually agreed profile of the levels of acceptable risk.
Evaluation of the Business Case
Thorough evaluation of the business case will ensure that the objectives, potential benefits, and opportunities are balanced against risk, key resources, exit parameters and the estimated life cycle/length of the relationship.
Incorporation of Knowledge into the Relationship Management Plan
When a strategy has been established, the creation of a specific RMP will help to capture the key principles. This will provide the communications and information platform that will help to raise awareness across the organisations.
3. Internal Assessment
Any collaboration has to be a two-way street. It requires a commitment to understanding the internal drivers and enablers that builds trust between the two parties to achieve mutual benefit and equitable reward
Capability and Environment for Collaboration
Collaborative working requires a different skill set from those typically found in a traditional contracting environment. In selecting the individuals for the roles is essential to focus on those individuals who can respond to the challenges of collaboration.
Assessment of Strengths and Weaknesses
It is unlikely that traditional organisations will be able to morph easily into collaborative enterprises without the understanding the constraints of internal culture, values, cross-functional barriers as well as operational policies and procedures.
Assessment of Collaborative Profile
For collaboration to work effectively, the potential partners must see each other’s organisation as an intelligent partner that they can work with openly. ISO 44001 is a benchmark for collaborative capability and a useful model on which to test the current position.
Appointment of Collaborative Leadership
The key to successful collaboration comes from having the right leadership. Traditional management tends to focus on control through position, in a collaborative structure, it is the ability to influence that counts.
Definition of Partner Selection Criteria
As part of the internal assessment process, you’ll need to establish what each collaborative partner should look like. This enables the organisation to set its agenda and provides criteria for evaluation later in the process.
Implementation of the Relationship Management Plan
Having established the Relationship Management Plan, this needs to be updated with the results of the internal assessment including responsibilities to be assigned to target dates.
In the Facilities Management industry where business relationships are measured in years rather than hours or days,It is regrettable that little is being done practically to implement collaboration Click To Tweet
4. Partner Selection
Organisations, like individuals, often assume that long-standing or traditional relationships can merely be migrated into a collaborative relationship. But finding the right partner is critical. More often than not, simply expecting that long-standing cordial relationships will become a genuinely collaborative one is mistaken. It is essential to understand the profile of the organisation you are looking to collaborate with and how this will be evaluated.
Nomination of Potential Collaborative Partners
It is important to have a clear vision of who potential partners might be prior to scouring the market. However, it is unlikely that every potential partner will be able to meet all of the aspirations and objectives of the collaboration.
Partner Evaluation and Selection
Performance culture together with the behaviours and track record to back it up, are more important in a collaborative partner than mere compliance to the contract.
Development of Engagement and Negotiation Strategy for Collaboration
The negotiations should set a precedent for how the relationship will continue and be managed. So this needs to be structured around the concepts of a genuinely win-win relationship. Trying to force a commercial advantage at this early stage may damage the future relationship irrevocably.
Initial Engagement with Potential Partners
Careful consideration of the ‘end game’ of the collaborative relationship is required. Sounding out the market for suitable partners is a vulnerable exercise. Each step needs to be clearly focused to support the objectives of the collaboration.
Assessment of Joint Objectives
No two partners are always going to have the same objectives. This does not mean that they are necessarily incompatible. Careful consideration and evaluation are necessary to build a dialogue that brings together common goals and outcomes.
Assessment of Joint Exit Strategy
Understanding that any collaborative initiative will come to an end is essential to the life-cycle of collaboration. Joint evaluation of the key triggers for disengagement builds long-term trust and confidence between the parties.
Selection of Preferred Partners
How organisations expect they will be working together will help to define the nature of the contracting relationship and the style of integration. This will have a significant impact on the development of risk management approaches.
Initiation of Joint Relationship Management Plan
Once a collaborative partner has been selected, the organisations should incorporate all the principles that have been agreed into a Joint Relationship Management Plan (JRMP) on which all formal arrangements shall be based.
5. Working Together
As Peter Drucker said so wisely said “What gets measured gets done”. Effective and sustainable collaboration requires a robust approach to both organisational development and personal behaviours. Understanding the joint objectives of the individual partners and ensuring that the performance indicators, incentives, and measurement will support collaborative behaviour is integral to an effective contracting arrangement.
Establishment of the Joint Governance Structure
Organisational culture change is hard. It requires a robust approach to both organisational and personal behaviours. Without a sound joint governance structure in place, the formation of integrated business processes performance management and people development will be in jeopardy.
Joint Executive Sponsorship
Joint executive sponsorship of the relationship which reflects joint ownership principles will guide the collaborative behaviours of both organisations.
Validation of Joint Objectives
Recognising and integrating both common and individual organisational objectives will remove many of the hidden agendas that may jeopardise a successful collaboration.
The operational leadership will need to adapt and be content with potentially being separate from and out of step with what has been the organisation’s traditional culture to date.
Joint Management Arrangements
Establishing a joint management team ensures that all team members fully understand her contribution to the collective.
Joint Communications Strategy
Listening and communication are key when bringing two disparate organisations together. Sound communication skills and structure will strengthen awareness and maintain support for the collaboration.
Joint Knowledge Management Process
Information flow is a significant benefit from collaboration, but frequently it is an area of conflict when working together.
Establish Joint Risk Management Process
A robust joint risk management programme as part of the operating process is a critical factor in being able to build sustainable and flexible operations. Evidence of a healthy relationship is that the partners support each other’s risks where practical.
Operational Process and Systems Review
Optimisation of business processes is a key benefit of working in collaboration arrangements, but this can often create the next level of potential conflict.
Measurement of Delivery and Performance
Performance measurement is an essential aspect of establishing a sound basis for working together, and the achievement of objectives needs to be defined and objectively measured on an outcome basis.
Improvement of Organisational Collaborative Competence
Individual competencies can strongly influence behaviours and thus the success of relationships. A joint assessment of the competencies and skills of the partner organisations is essential.
Establishment of a Joint Issue Resolution Process
Managing conflict towards a constructive and mutually beneficial outcome is crucial. There needs to be a clear issue resolution process that provides a mechanism and escalation procedure where appropriate.
Establishment of a Joint Exit Strategy
There are many factors and pressures that can have an impact on the operational drivers. The establishment of the joint exit strategy will avoid areas of conflict that can spiral out of control.
It is important when establishing an exit strategy to ensure that the impact on all stakeholders is taken into account.
Assets and Commercial Implications
Organisations need to clearly define their individual, and the joint distribution of assets that have contributed to the collaboration in the event of a controlled disengagement.
Management of Staff
A significant facet of behaviours stems from the future perspectives of staff working within the relationship, this should be part of any disengagement consideration.
Agreement or Contracting Arrangements
In developing a contracting approach, it is essential to define the individual responsibilities and to place these obligations with the correct party.
Establish and Implementation of Joint Relationship Management Plan
When the decision is made for one or more organisations to work together, the RMP becomes a joint plan, which will outline the way they intend to manage the relationship in future.
6. Value Creation
For value to be created in the relationship, both parties need to challenge traditional thinking, remain current and drive innovation so that new sources of value can be uncovered through a joint and continual improvement program.
Establishment of the Value Creation Process
In a collaborative environment, value creation is about delivering innovative solutions or releasing value that could not be generated by one organisation alone. A truly collaborative approach cannot rely on a spontaneous approach to innovation. A fully formed and structured innovation framework needs to underpin integration and the driving of additional and higher value from the relationship.
Identification of Improvement and Setting of Targets
The key to optimising co-creation is to ensure that identified issues are regularly reviewed and, where necessary, removed if not delivering. This ensures resources are not wasted or diverted from the primary objectives.
Utilisation of Learning From Experience
As organisations begin to work together more closely, it is equally important to capture the lessons learned.
Updating the Joint Relationship Management Plan
The JRMP should be updated to incorporate value creation initiatives which after evaluation and development, as required, are to be integrated into the operations.
7. Staying Together
As in any marriage, staying together can be the hardest part and disputes will be inevitable. However creative friction can be beneficial and end up strengthening the relationship if handled empathetically. It is also important to recognise that as relationships evolve they will change, so to ensure the maximum benefit, it is important to undertake regular validation to maintain focus and efficiency. Effective performance and behavioural management that is mature and focused on supporting people and processes to achieve the objectives will pay dividends.
Oversight by the Senior Executives Responsible
To ensure sustainable engagement over time, executive oversight should be both via reporting processes but also maintaining a highly visible presence.
Management of the Joint Relationship
Maintaining both delivery and development focus is crucial to ensure the relationship remains proactive.
Implementation of Monitoring of Behaviours and Trust Indicators
Developing trust in the relationships and ensuring the appropriate behaviours is a key aspect of joint management. As trust increases the performance of the relationship should increase the value it delivers.
Continual Value Creation
There should be continuous support and monitoring of innovation and continual improvement, to ensure that the partnering teams are exploiting their joint knowledge and, where appropriate, enhancing their skills.
Delivery of Joint Objectives
The longer the collaborative relationship is in place the greater the possibility for complacency between the various parties. The delivery of joint objectives needs to be the key focus for performance management.
Analysis of Results
It is important to understand and agree how the performance of the contract and the relationship will be jointly measured and ensure appropriate reviews are undertaken.
Creative friction is required to resolve increasingly complex problems and can be the stimulus for innovation. Empathetic issue resolution is essential as formal escalation processes can often be counter-productive by crystallising issues rather than resolving them.
Maintenance of Joint Exit Strategy
Maintaining a focus on disengagement ensures that the partners have a clear focus on the value of the collaboration.
Maintenance of the Joint Relationship Management Plan
The Joint Relationship Management Plan should be regularly reviewed to ensure it remains applicable and where updates or amendments are deemed necessary.
The strength of the collaborative partnership lays in the understanding of how and when the relationship has run its course. Contracting with the end in mind is fundamental to its success. Click To Tweet
8. Exit Strategy Activation
This is perhaps the most contrarian and counterintuitive part of the life-cycle. However, the strength of the collaborative partnership lays in the understanding of how and when the relationship has run its course. Contracting with the end in mind is fundamental to its success. The lifespan of any business relationship will vary between organisations and market influences; adapting to these changes is a necessary part of developing effective collaborative partnering arrangements.
Understanding how both parties will exit the relationship and putting in place clear rules for disengagement from the relationship, keeps the partners focused throughout the life of the relationship and into the future.
Initiation of Disengagement
The initiation of disengagement can arise from previously agreed triggers such as the achievement of objectives or where the partners mutually agree that the current activity has reached its natural conclusion. The joint management team should then commence the implementation of the pre-agreed joint exit strategy. This should take into account all commercial considerations, accountabilities, agreed objectives and implications for those personnel involved.
In developing an exit strategy, the partners must consider the way in which current liabilities will be fulfilled. The reputations of all parties are important, and support to the customer is crucial for future activities.
Evaluation of the Relationship
Collaborative integration offers the opportunity for organisations to extend their individual capabilities and market reach through combined operations. In every case, there is a need for the parties to openly address what they need to do in the event that the relationship is no longer viable. How we exit from a relationship says a great deal about the integrity of the parties, the strength of their relationship and their potential to collaborate in the future.
If the relationship has been well managed and has delivered its objectives, then the way should be open to considering future possibilities for collaboration. The future offers the perspective that more and more organisations will look towards this approach as a viable alternative.
Review and Updating of the Relationship Management Plan
As a final stage, the parties should review their joint relationship management plan as part of lessons learned to be feedback to their relative management systems.
This week’s Question: Having reached the end can you see value in a Collaborative Standard and how would this impact on your FM contracts?” please leave your comments below.