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How to co-create a great commercial relationship

By Stuart Maister

“Who’s responsible?”

That’s a key question in most commercial relationships. And this isn’t just
about when things go wrong. Sometimes it’s when things just didn’t go as
they were meant to – and the fundamental issue was that the focus was
on the transaction, not the relationship.

That’s why we’ve developed the Mutual Value Relationship Agreement…

If I supply you with fantastic software which can transform the way your
people work and your ability to be much more agile as a business, but
your colleagues only use 10% of its potential, it may have seemed like a
poor investment. It didn’t transform our business. No-one is more
productive. Was that my fault as a supplier, the fault of the software
as a product, or did you abrogate your responsibility as the user?

Of course, this is the wrong question. All or none may be true, but the
real issue is the way we engaged as supposed partners. The important
truth is that we all had a stake in the software being a great
investment, and the only way this was going to be true was if we worked
as genuine partners, in a completely collaborative way, and with an
approach based in the Mutual Value philosophy. Our support of your
adoption was as critical a part of the investment as the product you
bought, and there will be a need for ongoing services to ensure you
leverage its potential.

That’s true of the specific transaction. Go above that and it should form the basis of the whole
relationship, in which (we hope) many different transactions will take
place. That is the purpose of the Mutual Value Relationship Agreement –
to ensure we are both clear, agreed and aligned on why we are working
together, how we intend to do so and the value we both bring.

The MVRA includes a number of elements which establish a clear foundation for much more successful engagement:

A Vision

 – Capturing why we are working together and the scale of our ambition

WHO brings WHAT?

 – Establishing our roles in the relationship

–  Identifying the capabilities that are brought by both parties

–  A commitment (if agreed) to innovate and continually improve

The HOWs

– Setting out the way we will work together, landing the Mutual Value
principles (dealt with elsewhere) in the specifics of our relationship

How are we DOING?

– Agreed measurements about the health of the relationship

– How well are we adhering to the MVRA?

As an introduction, in this article I’ll look at how we might co-create
the Vision. Other articles in the future will look at other aspects of
the MVRA.

The Vision we create starts with big questions of why?

Why are we in this relationship? Given that one partner is a supplier and
the other is a Client, the starting point for this must be based on the
ultimate purpose of the customer. That is the focus of all of its
activities, and so in our relationship we must be clear that everything
we do together is a collaboration to deliver against this purpose.
Anything that does not is of no value to the Client and so should not
form part of the transaction.

If, in the example above, the Client is a university, then we need to understand why the
university is there.

A typical answer will be; ‘to produce students educated to the highest standards and equipped to thrive in the world,
to provide them with the best possible experience of study, and to
collaborate with other institutions around the world to advance
knowledge in key areas.’ There may be additional factors, such as: ‘to
grow our influence and reputation as a centre of higher education on a
national and international basis’.

This may be set out in its own vision document or developed through a deep understanding
which should be present in an existing account. In all circumstances we
as a supplier may draft our own version of this – but it is critical to
get it validated with the Client so that there is a joint Vision.

The second part of our Vision is to define our ambition as partners to help
achieve this Purpose. Are we there simply to help it happen – or do we
bring along an X factor that can help deliver it beyond what would
otherwise be possible? This X factor will only be useful if both parties
agree to engage with it, and so it forms part of our core agreement.

Therefore our Vision as part of our MVRA may be:

‘Our Vision together is to leverage the very best technology to ensure the
students of x university get a world class experience, are able to
access all the information and resources they need to excel in their
studies, and to enable the university’s people to collaborate with
others around the world to ensure they are advancing knowledge as
powerfully as possible.

Our commitment is to continually improve all aspects of this work in a way that grows the university’s
reputation and influence. (Supplier) will make available its very best
innovations from all over the world to help achieve our joint ambition:
to ensure the organisation is among the global leaders in its use of
technology.’

Now this vision creates a high-level foundation for the one we wish to develop in our MVRA. Anything we do
must be framed as supporting this vision. Anything the Client asks to be
done must be questioned and agreed against this Vision.

What does this achieve?

By doing this we signal to our Clients – and their own internal colleagues
– that we are aligned to their purpose. We will consistently use this Vision as our focus and the foundation of our work.

This only becomes real if it is used. Here’s how this happens.

It is articulated and shared

Simply by defining and articulating this we have breathed life into this
Vision. The first step is to ensure it is shared within both Parties –
along with the rest of the MVRA – so that everyone knows that this is
the foundation of the relationship.

It is used explicitly in our engagements

This Vision should be referenced in all major interactions – key meetings,
planning sessions, inductions and certainly in regular reviews. It
should feature in all proposals and bids by the vendor as the starting
point for their proposed service, and included in any commercial
agreements as the commitment of both parties.

This differentiates the vendor from other suppliers, who will be focusing on
the service or product involved in any bid. The supplier who has an
agreed MVRA with its Client should come up with better solutions focused
on the ultimate purpose of the Client, and – critically – commits to a
way of working together that will clearly work better.

That does not mean the buyer has to choose this supplier, but it does mean
that that know that any contract will be delivered in a way that has
been agreed and with a focus on what is important. That should be of
value to the buyer as well as the vendor.

It must be reflected in the behaviours and culture of the vendor

This commitment will rapidly lose credibility if the behaviours of the
vendor’s people does not reflect it. It is critical that all of those
who engage with the Client understand it, believe it and manifest it in
the way they engage with the Client.

Where the Client is a specific department or business unit

There is a nuanced version of this that will be valuable if the Client is a
specific department or business unit. The Vision may then be
specifically embedded in the purpose of that team.

In the example above, we may see our Client as totally and completely the CIO
and his/her team. In this case we may wish to be more specific about our
support of them. However, their purpose will be to support the ultimate
purpose of the organisation, and so that remains the ultimate framing
of our work together.

It may then become as follows.

‘Our Vision together is to leverage the very best technology to ensure the
students of x university get a world class experience, are able to
access all the information and resources they need to excel in their
studies, and to enable the university’s people to collaborate with
others to ensure they are advancing knowledge as powerfully as possible.

Our commitment is to work together in an open and collaborative way to ensure the ICT team can continually respond to the
changing needs of the organisation in an agile manner, always improving
what is delivered to help grow the university’s reputation and
influence. (Supplier) will make available its very best innovations to
help achieve our ambition: to ensure the organisation is among the
global leaders in its use of technology to further academic progress. ’