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March 18, 2011

According to the old song, ‘Breaking Up Is Hard To Do’. But as I survey the business world today, it seems that ‘getting together’ and making things work harmoniously may be even harder.

Every day, I encounter questions, advertising materials, conferences and more, advocating the benefits of collaboration. It is an interestring commentary on our times that we appear to find it so difficult, especially since collaborative behavior is the underpin to any form of trade. Yet somehow we have managed to make relationships in business today highly adversarial. The collaborative spirit that is inherent to an organization like IACCM still remains the exception.

I am pleased to be involved in a variety of initiatives related to understanding and encouraging increased collaboration. One of these is the new award program introduced by leading group purchasing organization Corporate United. At their Synergy Conference in Chicago May 3rd – 5th, I will join fellow judges Professor Rob Handfield and Jason Busch (of Spend Matters fame) in announcing the winners of the Corporate United Collaboration Awards program, established to honor supply chain, procurement and other related departments that have ‘demonstrated superior collaboration with an internal functional group and/or an external supplier’. 

I welcome this and similar initiatives to encourage more collaborative behavior because without collaboration we limit value creation and long-term economic growth. But at the same time, I cannot help but ask why we need such focus on what should be an innate characteristic. Is it not amazing that we need to make awards to people who cooperate with their fellow employees? Is it not remarkable that we see collaboration between a supplier and a customer as something exceptional? What has brought us to this position?

I have a list of factors that I have observed which appear to be the enemies of collaboration. Some are cause, some are effect. I will expand on these in my next blog. For now, I would very much welcome your thoughts on these two key questions:

  • In the business world, are we less collaborative today than we used to be?
  • If yes, then why has that happened?
  1. Unfortunately, given how our minds have evolved and the environment in which we find ourselves combine to make collaboration difficult. Humans naturally collaborate or are competitive based on factors such as the other people’s status, how likely we are to encounter this person/these people again, and generally whether we believe they can help us achieve our own objectives. Where there is added anonymity (more today than there was 1000’s of years ago where people lived in small villages or groups), there is less reason to take a collaborative approach than previously. Additionally, the competitive nature that allows people to rise within organisations, may occasionally lead to a bias toward reduced collaboration at a macro level. On the question of whether training, education, or suggestion can mitigate this issue, I am pessimistic. Having said that, intelligent, self-aware people may be able to mitigate their own biases for limited periods of time and within restricted circumstances.

  2. We have been dealing with the same issues you discuss above for a long time. Our client base is primarily federal, state, and local governments and private sector organizations who do business with them. Contracting personnel within the public sector have moved to more and more adversarial relationships — perhaps in an attempt to “not violate a strict interpretation of the rules”. After all, bureacracies tend to be inclined to “play it safe” rather than to focus on efficient or effective mechanisms, which may involve slightly more risk. In a recent statement by Dan Gordon, who is the US Federal Government’s Administrator of the Office of Federal Procurement Policy (OFPP), Mr Gordon directly tackled this issue of the government’s relationship with industry. One of his key points is to reassure the acquisition workforce that it’s all right to talk with industry representatives, especially because it helps contractors understand an agency’s expectations. He also said he’s on a mission to change the thinking of a generation of acquisition officials who are shy about trying new things.

    Hopefully leadership and training in this arena will help create a better bridge for collaboration. Unfortunately, fuel is added to the fire (and bridges are burned as a consequence) any time a private sector organization is accused of taking bribes, falsifying invoices, and not performing.

  3. I read an interesting article recently that confirmed what we know anecdotally – we anticipate that the “other” person will be adversarial in their dealings with us so we preempt them by being adversarial first to gain a tactical advantage.
    I have the honor of teaching collaborative negotiation skills to undergraduate students once a year. Many students start out the class believing that their negotiation partner will take advantage of them if they don’t first take advantage of their partner. Through games, role plays and class discussions, they learn to appreciate collaboration, but is a process of changing their minds slowly over time.
    Congratulations Tim on being a judge. It sounds like fun.

  4. Peter permalink

    “In the business world, are we less collaborative today than we used to be?”

    Do people really change that much? I am inclined to think not;there has been commercial courts of law and equity in existence since the year dot. Why? Because of disputes obviously.

    Collaboration up to a point is of course in both parties best interests. But there is a line whereby to cross it means accepting the counterparties risk which if we assume was not part of the “deal” is not acceptable.

    I also think we need to split public sector contracting from private. The former uses other peoples money and so “best value” duties need to be discharged. Onerous terms like termination for convenience; LAD`s; service credits; open book; gain share; benchmarking; most favoured nation; etc are all designed with that in mind. My view is these clauses can all be “managed” and the starting point is fully understanding the drivers.
    Introducing these and worse (90 day terms?) into private sector deals is fine if the party who takes the benefit is willing to take the accompanying burden i.e. pay for it. The kicker is where they want something for nothing and the relationship – like a “gold-digger” marrying for money – is doomed from the start.

  5. Florante permalink

    Gone are the days when a simple hand shake can close a deal and the fulfillment of a prestation to give, to do or not to do are nearly completed before the Contract documents are fully executed. Those were the days where the element of trust, good faith, fairness and equity are still embedded in the culture and values of the Contracting parties.

    Presently, the proliferation of various Contract forms where the terms and conditions are onerous and exculpatory in nature is becoming a norm in the industry. The “good faith” attitude among parties are fading away and are being replaced by insidious machinations/trickery designed to take undue advantage of the other, under the masquerade and protection of being legally enforceable.

  6. Ian Heptinstall permalink

    I personally have little doubt that a well managed, collaboration-based, major contract can deliver performance and value-for-money well ahead of one established on an adversarial basis.

    It needs more than just inter-personal collaboration though – the T&C’s and management methods need to be fully aligned and suitable for collaboration. Otherwise we put the project members in a conflict – do what is right for my employer v do what is right for the project/client.

    Another major constraint to acheiving more successful collaborations is that companies who are actually combatative/adversarial can look very similar to those who are collaborative. There is a significant risk – usually to the client – that if they assume their supplier is collaborating and adopt similar behaviours, that they will be exploited. We have a “prisoner’s dilema” – although collaboration allows for “win-win”, if one party is “soft” relative to the other there will be a bigger win-big loose scenario, and we play to avoid the big loss. Both being combative is the safe option – you avoid the big loss, you are the same as your competition.

    Trust will be the foundation of collaboration, it will require strong drive from all the parties involved, and will need to manage the whole project in ways which allow collaboration to significantly reduce the time taken and costs incurred.

    Do the major purchasers/acquisition agents have the skill and knowledge to make this happen? Do any major contractors have the confidence to offer clients a faster/cheaper/better proposal conditional upon collaboration? Until this happens I too think the

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  1. Are We Less Collaborative Today? « Commitment Matters

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