“Working in collaboration with suppliers to drive efficiency and improvement, to innovate and create more value add, has been talked about a lot. However, it’s clear in practice we are not as strong as some other clients of our suppliers.”
Stephen Duckworth, Head of Supplier Relationship Management at the UK Cabinet Office
By Joint MDs Kevin Vaughan-Smith and Stuart Maister
Collaboration. It’s one of those lovely words which people use increasingly in business – and mean it – but which is the hardest thing to translate into real behaviours. This is especially true when there’s pressure – of time, budget or delivery. Suddenly traditional transactional behaviours become the norm. And they can be hell.
Yet everyone’s talking about it. Even at the level of initial engagement the term is increasingly in evidence. Example: the UK government is putting effort into defining and prompting collaborative contracting across the public sector.
So why is the reality still very different to the ambition? And what are the 3 steps to heaven that turn those warms words into the way we do things together?
It’s the way we do things
Government is by far and away the largest purchaser of complex services. It has the most to gain by collaborating with vendors to implement innovative, leading-edge solutions, with the potential for shared risk and reward leading to far more effective solutions at lower intial and total cost of ownership. In the UK, for example, the freedom from EU procurement shackles has led to the ambition to grasp this opportunity. But we fear it might yet again be missed, despite best intentions.
For example, an article on publictechnology.net raised some interesting concerns about the latest UK Government review of procurement post-Brexit
“The Public Services Committee said the current Transforming Public Procurement green paper fails to differentiate between the commercial purchasing of goods and commissioning high-quality services.
The committee… had heard in evidence that while the Cabinet Office has many procurement specialists, it has “little commissioning expertise”.”
They gave an example of where this might impact procurement:
“It also said the commercially-focused proposals in the green paper …… are at odds with elements in the new health and social care bill designed to encourage collaboration between the NHS and local authorities.”
In other words, the existing predilection amongst many in procurement in Government to turn everything into the lowest price wins continues to be a siren call. It prevents collaboration even between public sector bodies.
And it does the same when it comes to major suppliers. Take, as an example these recent comments by Stephen Duckworth, head of supplier relationship management for the Cabinet Office:
“Value for money does not therefore mean simply selecting the lowest price, it means securing the best mix of whole-life quality and effectiveness for the least outlay over the period of use of the goods, works or services bought…
“Government doesn’t have the strongest reputation when it comes to managing relationships with suppliers, although we are finding some areas of good practice within departments.
Working in collaboration with suppliers to drive efficiency and improvement, to innovate and create more value add, has been talked about a lot. However, it’s clear in practice we are not as strong as some other clients of our suppliers.”
What this tells us is that the long history of procurement by price, the way civil servants have to justify their work, the pressure to minimise spend, have created a culture which is going to be difficult to change.
In our experience the long history of this kind of behaviour has trained suppliers to respond in kind. This is true in the private sector too. Despite all the warm words, as soon as there is pressure they often become transactional – with the client, with their own supply chain and even with those who are meant to be partners. This is embedded behaviour which takes a real and conscious effort to shift.
The 3 steps to collaborative heaven
Of course, there is no magic bullet. But there are 3 steps we recommend that takes you to collaborative heaven and away from transactional hell.
Step 1 – hold up the mirror
The first step is recognition that, despite the warm words, when the rubber hits the road the parties involved are not truly collaborating. This can take time as it involves a proper look at the ways they are interacting and the impact this has had.
If it’s a new relationship – or the establishment of a new set of relationships – then it’s still important to call out the traditional behaviours everyone involved has experienced and demonstrated. That way we’re clear what we’re tackling.
Step 2 – do you really want it?
The second is to carry out an honest assessment about whether there is the desire and willingness to change on all sides. This involves a real look at the benefits of doing so.
We recently worked with two major companies who set up a partnership agreement but were not behaving as partners. Instead, they had reverted to being contractor and sub contractor. The key question was: do you really want to change? And if so, why? What benefits do you expect to follow?
Step 3 – prove it
When these were fleshed out it became obvious that a partnership arrangement was the right solution. But the third, tough step, is to ask this question: how? What will this actually mean in practice? And how will you be accountable for ensuring this is true in a sustainable way?
We use our Trust Model as the basis for identifying the answer to this question. It provides a framework for identifying the areas which need to be agreed and aligned in order for there to be trust, which is the only basis for true collaboration.
This leads to a full assessment of the capabilities of both organisations to deliver on this promise. There is no point committing to collaborate but behaving contractually. It would be better to simply agree that is the basis of the relationship and everyone knows where they are.
Heaven – making it work
Of course, even at this stage what we have are warm words. To turn these into sustainable behaviours we believe it helps to have an independent voice consistently involved to facilitate discussions, help them keep each other accountable and help navigate through those times of high pressure. This may not prevent reversion to traditional behaviours, but they will be called out and reviewed.
Of course we would say that as it’s what we do – but the evidence is that, left to their own devices, people revert back to the way they’ve always done things.
Collaboration isn’t a switch that can be turned on, but an iterative process of learning, discussion and continual improvement. Only by having a conscious plan for this to happen will this difficult – but highly rewarding – process be successful.
Does this resonate? If so, let’s have an open discussion about what this might mean for your business.
For further information get in touch now...
MUTUAL VALUE HELPS YOU BUILD TRUST.
Let's have an open conversation about the value this can bring to your organisation. Contact email@example.com to arrange a free video call with Stuart Maister or Kevin Vaughan-Smith.