I went to lunch this week with a former CPO from a large industrial firm and a purchasing director from an automotive firm. Over lunch I was asked the question: “why do we find collaboration so difficult in supply chains?” My response was that there are a number of reasons behind this and nearly all of them can be addressed. I believe the reasons that apply to collaboration between firms also apply to collaboration within the firm, so, in no particular order:
1) Mutuality. Collaboration is mutual and has common goals. I have often heard a firm use the term ‘strategic partner’ then fail to apply strategic thinking (“we’ll put you on the approved supplier list”) or partnership behaviour (“can we see your accounts”). Collaboration has to be about both sides putting something in, to both get something out. It requires common, agreed upon (i.e. mutual) goals. After all, you both have to have skin in the game.
2) Intent. You must have intent to do it. Collaboration is about adaptation between partners, it’s about joint working. While there can be lots of intentions towards doing it, one party has to move first otherwise we end up with this:
3) Social bonds. Good collaboration needs lots of rich information sharing and deep social bonds. This can be achieved by putting people into cross-functional teams, co-locating staff in a supplier or customer, or structuring working spaces to encourage social connections. One European car manufacturer structures its design offices in a ‘hub and spoke’ where the design teams work in the spokes and the hub contained shared services (photocopiers, coffee, water etc.). People mingle in the hub, informal information flows, collaboration occurs and (hopefully) better design occurs. If it’s not possible to create these interactions structurally, for example your customer or supplier is eight time zones away, then social bonds must be created differently. Frequent visits is one way to do this but the relationship needs to be kept ‘live’ in between visits so pick the phone up and ask them how they are, share information and knowledge to demonstrate your goodwill and intent.
4) Incentivisation. In a previous post I discussed the need for metrics and incentives to be aligned to what the organization wished to achieve. Well, the same thing holds here. If collaboration is to be nurtured, then incentive mechanisms need to be established that foster a win-win environment. They need to be jointly agreed and adhered to. It’s no good looking for “price down”, when the resources of your collaborator are complementary and are tricky to substitute. After all. Collaboration is about leveraging synergies between organisations, not maximizing gains within companies.
5) Trustworthiness NOT trust. This old chestnut, but with a twist. Too many times have I heard that ‘trust’ is key, but the reality is, trust is a pretty difficult thing to grab hold off and influence. That’s why I always say that trustworthiness is more critical (so, are you a person of your word?). It’s then up to the other person to determine whether they trust you (and are they therefore trustworthy?). So, in the end, it’s just about doing what you said you would (and having a person that understands that on the other side)…
So, there we have it. Possibly simplistic, possibly naïve, some simple prescriptions for getting along.