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Is Collaboration Dead?

June 6, 2008

Recession, supply constraints, sub-optimized relationships – whatever the forces that lie behind it, more and more organizations are talking about ‘collaboration’ or ‘partnering’ or ‘customer / supplier of choice’ as ways to improve business performance. But realizing such relationships is proving tough to achieve. There are some obvious reasons for this – but maybe there is a hidden factor that actually makes it impossible.

This week, I was at a meeting of IACCM members in Houston, Texas. We were discussing the many pressures and opportunities in front of those in Procurement, Contract Management and Legal. And of course, much of the conversation revolved around the question of how we could improve the quality and results from trading relationships. There is a lot of talk about the need to enhance performance management and relationship management, as well as growing understanding that somehow negotiations (and RFx procedures) must become less constrained / adversarial.

So of course, conversation naturally turns to concepts like ‘trust’ and ‘collaboration’ – words that are increasingly on executive lips as well. And we started to outline some ways that these attributes might be encouraged or achieved.

That was the moment that a critical question came from the back. “Why do you think that we can start building trust and collaboration when we have executives who destroy such principles?” (I do injustice to the exact words, but this addresses the principle). Our questioner (who is French) was making the point that the Anglo-Saxon model of business management has increasingly become suffused by lack of loyalty, lack of trust and an aura of greed and personal progress at the expense of corporate values or principles. So how can you reconcile this attitude -and the resulting detachment that many employees feel – with attempts to create ‘trust’ and ‘collaboration’ between organizations?

It’s a great question and in many respects goes to the heart of some of my recent comments on globalization. Collaboration requires levels of compromise and a readiness to sometimes forgo short term opportunity for longer-term gain. It also requires trust (if I forgo a benefit now, can I trust that you will do the same at some point in the future?). So where are the incentives for such behavior? Since markets demand short-term results and the speed of change makes future needs hard to predict, is there in fact any hope that organizations will invest in forming and nurturing longer-term relationships? Or like employees, are all things now dispensable?

What are your thoughts on this?

One Comment
  1. John Wroth permalink

    I was at the Houston meeting – great job! I think that this is a question that is in front of us all. When pursuing new business, in markets with ample competition, the answer may simply be that we as contract managers choose build that relationship with those who are of the same business mind set. What kept running through my mind at the meeting is the tougher question – How do we foster this relationship approach in areas of spend that are more specialized? How do we “give” without “giving in”? Few sources of supply can make this a much deeper topic in a hurry. The idea of KPI is in large part a solution. By doing the preparation up front, we can set the stage for “training” our supplier base to do business with us in that vein. Unfortunatly, this can take an inordinate amount of preparation. Time that maybe management cannot or will not allow us to take.

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