• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
The case for partnering
 

The case for partnering

on

  • 994 views

In the globalised world, partnering is becoming more important - but partnering requires an investment in managing change effectively.

In the globalised world, partnering is becoming more important - but partnering requires an investment in managing change effectively.

Statistics

Views

Total Views
994
Views on SlideShare
994
Embed Views
0

Actions

Likes
2
Downloads
46
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    The case for partnering The case for partnering Presentation Transcript

    • Partnering RelationshipsThe Case for Investing in the Relationship
      10 January 2011
    • Table of Contents
      Value of Effective Partnering Relationships
      Framework for Effective Partnering
      The Partnering Journey
      References
      13 January 2011
      2
      A case study is available and published as a separate document
    • The IBM Global CEO Study has been tracking the growing importance of partnering
      3
      13 January 2011
      2006 – Strategic Partnerships as a significant source of business model innovation
      2010 – Partners help drive speed and dexterity, moving costs from fixed to variable
      • Be “glocal”: Leverage the world through partners, constantly tune your operating model – global where possible, local where necessary.
      • Simplify whenever possible: Simplify interactions with customers, simplify products and services by masking complexity, simplify for the organization and partners.
      • Manage systemic complexity: Put complexity to work for your stakeholders, take advantage of the benefits of analytics.
      • Promote a mindset of speed and flexibility: Act quickly, push execution speed, course-correct as needed.
      Innovation Priorities
      (operating margin growth CAGR)
      Outperformers
      Underperformers
      Products
      Services
      markets
      % of respondents by innovation priority
      Operations
      Business Model
      • Organization Structure Changes (66%)
      • Building Strategic Partnerships (53%)
    • High-performing relationships and governance have a direct financial benefit to IBM, and the client
      +15%
      • Customer satisfaction
      • Delivery of value added projects on time and budget
      • Quick response time to requests
      • Innovation and thought leadership
      • Resources freed for more productive work
      When asked to compare the value at stake between a good and poor outsourcing relationship:
      • Over 80% of private sector buyers
      • Over 50% of public sector buyers
      • Over 60% of providers
      Felt that at least 30% of the annual contract value was at risk
      Annual Contract Value
      0%
      • Resource waste due to inability to trust / delegate
      • Greater need to monitor and audit
      • Frequent conflict escalation
      • Low customer satisfaction
      • Ineffective execution and follow up
      • Lack of clarity in roles & responsibilities
      • Decisions based on limited information
      -15%
      13 January 2011
      4
      Source: Vantage Partners
    • But, as the Global CEO Study also shows, fundamental change is required to succeed
      5
      13 January 2011
      • Less than half have successfully managed fundamental change before
      • Business model innovation, including building strategic partnerships, matters
      • External collaboration for innovation is essential
      • Collaboration is recognised as indispensable to innovation - “Without collaboration, innovation would be impossible.”
      Extent of Fundamental Change Needed
      Over the Next Two Years
      Moderate change
      22%
      Fundamental change
      65%
      Little or no change
      13%
      Source: IBM Global CEO Study 2006
    • However, the gap between the capability and the challenge ahead is growing
      The Change Gap* Triples
      2008
      2006
      22
      8
      %
      %
      CHANGE GAP*
      CHANGE GAP*
      6%
      19%
      13%
      12%
      “We have seen more change in the last ten years than in the previous 90.”
      Ad J. Scheepbouwer, CEO, KPN Telecom
      11%
      31%
      22%
      83%
      20%
      65%
      61%
      57%
      Change Needed
      Past Change Success
      No/limited Change
      Moderate Change
      Substantial Change
      No/limited Success
      Moderate Success
      Successful
      * Difference or ‘gap’ between expected level of change needed and past success in managing change
      Source: IBM Global CEO Study 2008; n (2006) = 709, n (2008) = 1104
      6
      13 January 2011
    • Research confirms relationship issues as the prime reason for partnering failure – a failure to manage change
      A cross industry study conducted with over 120 companies revealed the strong need to manage relationships professionally and systematically
      Signs of critical working relations:
      Foremost Causes of Partnership Failure
      • Poor Communication
      • Breakdown in trust
      • Negative partisan perceptions
      • Festering conflicts
      • “Fingerpointing”
      • Disrespect/coercion
      • Stress …
      Poor or Damaged Relationships Between Firms
      Poor Strategyand Business Planning
      52%
      30%
      37%
      64%
      11%
      6%
      Bad Legal and Financial Terms and Conditions
      * Source: Ertel, Danny, Jeff Weiss, and Laura Judy Visioni. Managing Alliance Relationships - Ten Key Corporate Capabilities:A Cross-Industry Study of How to Build and Manage Successful Alliances. Cambridge, MA: Vantage Partners, 2001.
      13 January 2011
      7
    • Relationship Quality Impacts Operational Performance
      Relationship Attributes
      Operational Attributes
      • Service delivery … Managing SLA’s
      • Technology Management
      • Processing new service requests
      • Reporting and billing
      • Prices, fees, rates
      • Management, Operation, Security of IT assets ….
      • Trust and mutual respect
      • Ease of working together
      • Bridging cultural diversity
      • Openness and quality of communication
      • Collaborative decision making
      • Fairness…
      Operational Performance Impacts Relationship Characteristics
      Issues are often seen as performance related, but root causes are more often relationship related
      13 January 2011
      8
    • Table of Contents
      Value of Effective Partnering Relationships
      Framework for Effective Partnering
      The Partnering Journey
      References
      13 January 2011
      9
      A case study is available and published as a separate document
    • Effective partnering depends on alignment of long-term and every-day relationship aspects
      Partnering Framework
      Communication
      Roles & Responsibilities
      Culture-in-action
      Financial
      Risk Sharing
      Innovation
      SharedKnowledge
      Mutual
      Benefits
      Skills
      Decision-making
      Problem-solving
      DistinctiveCompetencies
      Commitment
      Shared Goals
      Motivation
      Measurements
      Linkage
      Pre-disposition
      Trust
      Attitudes
      Assumptions
      Process
      Governance
      Social
      Relationship in Action
      Operational Day-to-Day
      Relationship over Time
      Strategic Long-Term
      13 January 2011
      10
    • Partnering relationships exist to go beyond transactional relationships, but to what extent?
      Transactional Value Add Special Unique
      (market exchange) (performance contract)
      T V/A S U
      • Commodity goods and services
      • Value derived from low price and convenience
      • Relationship not really a differentiator
      • Eg. Utilities, fast food
      • Customized goods and services
      • Value derived from stability and economies of scale
      • Some customer-supplier intimacy and knowledge
      • Expertise will overcome unexpected contingencies
      • Eg. Tax Consultant, Doctor
      • Complex or innovative goods and services
      • Value derived from optimization across organizations
      • High degree of customer-supplier intimacy and knowledge
      • Eg. Auto value chain
      • High complexity or one of a kind goods and services
      • Value derived from creating a new organization
      • One Team – conscience seamless integration of capabilities
      • Eg. Formula 1 team
      Source: Prof. Henderson, Vantage Partners
      13 January 2011
      11
    • Think of relationships as a continuum, with a series of steps required to achieve the ‘ideal’ state
      We are one organisation, value is totally derived from our inter-dependence
      5
      Unique
      Value is enhanced for both of us through innovation and continuous improvement
      4
      Special
      We share risks and rewards and our key people have relationship-oriented incentives
      3
      Cross-company teams are formed to enhance value
      2
      Value Add
      IBM is able to leverage its expertise to drive value and resolve contingencies
      1
      Transactional
      Self interest is predominant
      0
      13 January 2011
      12
    • By looking at each dimension we can build up a matrix, serving as both Shared Intent (Vision) and Roadmap
      Mutual Benefits
      Commitment
      Pre-Disposition
      Shared Knowledge
      Distinctive Competencies
      Linkage
      Horizontal consistency
      Level 5 - Unique
      Vertical Progression
      Level 4 – Mutual Value Creation
      Level 3 - Special
      Level 2 – Value Add
      Level 1 – Building Capability
      Level 0 - Transactional
      13 January 2011
      13
    • Example of a Roadmap / Maturity Model
      13 January 2011
      14
    • The Roadmap can also be used to measure progress or relationship ‘maturity’
      13 January 2011
      15
    • 16
      13/01/2011
      A Relationship Alignment Survey measures the health of the relationships over time
      Purpose and Objectives
      • Monitor whether the relationship is developing in the right direction
      • Identify emerging weaknesses / pain points
      • Measure relationship progress over time
      Deliverables
      • Graphs and statements showing the relationship health and in particular the degree of alignment
      • Average, median and mode scores with standard deviations and gaps
      • Conclusions and Recommendations
      Logistics
      • Web based multiple Choice questionnaire
      • Participants selected by IBM and partner
      • Takes 15-20 minutes to fill in
      • Repeat approximately every 6 - 12 months, ideally linked to an Annual Planning cycle
    • Table of Contents
      Value of Effective Partnering Relationships
      Framework for Effective Partnering
      The Partnering Journey
      References
      13 January 2011
      17
      A case study is available and published as a separate document
    • Strategic partner / outsourcing deals almost always involve a handover from deal makers to implementers
      Strategic Partner / Outsourcing Program Lifecycle
      Opportunity
      Development
      Deal
      Signing
      Solution Design
      Transition
      Continuous
      Improvement
      Growth
      The Artefact
      IBM Focus of Activity
      Contract
      Stabilise Operations
      Continuous Improvement of Operations
      Partner ‘Expected’ Activity
      The Intent
      Relationship Goals and Governance
      Innovation
      Value Add
      Relationship Charter
      13 January 2011
      18
    • Relationship alignment is important throughout the lifecycle, but so much easier if started with ‘the intent’
      19
      13 January 2011
      Ideal to start at ‘Solution Design and Deal Negotiation’ stage
      • Captures intent at source
      • Provides effective handover to implementation teams
      • Creates momentum during ‘honeymoon’
      Define the Relationship Intent
      Relationship Alignment Workshop
      Relationship Alignment Survey
      Joint teams drive priority initiatives
      Joint Planning & Governance
      Monitor Relationship Health & Maturity
      Start point for ‘troubled’ relationships
      • Identify what is wrong
      • Usually after a number of failed initiatives to improve
      • Usually after high turnover of leadership of both partners
      Start point for operational issues
      • Intractable performance issues
      • Usually address symptoms
      • Initiatives burn out quickly
      Execute Plan
      & Measure Outcomes
    • Each company brings their own set of business practices, many of which will be in conflict with those of the other company
      Partner A: “client”
      Partner B: “outsourcer”
      “adherence to process produces consistent results, decreases risk”
      “we are a family”
      “achieving schedule is most important”
      “minimizing and reducing costs is high priority”
      “achieving results is more important than following consistent procedures”
      “we identify and present the best option for achieving desired results”
      ?
      “broad involvement in decision making”
      “business controls, policies and measures are important management tools”
      “customer service orientation, even to point of heroics”
      “a single approach is most efficient and effective”
      20
      People will respond to business scenarios with what is “right” in the culture of their company
    • Situation: A leader from Partner A has requested a due date on a project that a leader from Partner B believes it significantly aggressive and is likely to be missed. How is each leader viewing the situation?
      Partner A should be open to an alternative date or be willing to change the requirements
      Partner A should understand that processes cannot be compromised since it will increase cost and risk
      It is vital that we follow “tried and true” approaches since this environment is complex
      Due date is vital due to its impact on customers so Partner B should do whatever it takes
      Partner B should be willing to forgo certain steps of its processes to make this happen
      To change this decision, we need to involve a broad group of stakeholders and run the risk of unacceptable further delays
      ?
      Partner A: “client”
      Partner B: “outsourcer”
      21
      Reconciling “right Vs right” responses is critical so people know how to respond to business scenarios
    • Business practices are the unwritten rules that drive expectations and actions within organizations
      Business Practices:
      • Are customary, habitual or consistent way that work is performed and adhered to by members of the same organisation
      • Include intangible, subtle and difficult to define aspects of how the work is undertaken that may be driven by underlying mindsets, assumptions, beliefs, norms, styles, and customs
      • Are more often “caught” than “taught”
      • Are often not well documented so they are learned through mentoring, coaching, and watching others be successful – and unsuccessful
      Right Vs Right
      • Identify business scenarios to which the response may be ambiguous or not well defined
      • Map out the response that both partners agree should be the standard business practice
      • Describe the business scenario and business practice response in narrative form
      • Describe how the business practice is different to a partners normal culture and why the changed business practice is important
      • Communicate to people and create an easy to access reference point, e.g. Intranet
      22
    • 23
      13/01/2011
      Initially the change program will focus on enablement as a series of phases - align, enable and perform
      Enable Organisational Frameworks
      Align Strategic Intent
      Perform Culture
      • Align KPIs
      • Joint Planning
      • Reconcile right Vs right business practices
      • Document & Improve Processes
      • Measurement
      • Communications Strategy
      • Reporting
      Relationship Alignment Workshop
      • Communications
      • Deploy joint plans
      • Leadership
      • Roll out business scenarios
      • Integrate into BAU
      • Feedback cycles
      Get the Basics Right
      • ‘Table stakes’ - consistently achieve contracted outcomes
      • Relationship intent & Vision
      • Joint Objectives
      • Define culture
      • Governance
    • Subsequent cycles are more driven by Roadmap priorities and relationship health requirements
      24
      13 January 2011
      The Roadmap
      • Sets out agreed priorities and business outcomes
      • Takes into account that there needs to be ‘horizontal consistency’ along with ‘vertical progression’
      • Establishes a multi-year program, to be refined as required
      Relationship Health
      • Focuses on the organisational and cultural enablers
      • Measures current health and identifies issues requiring attention
      • Monitors evolving expectations of the relationship
    • 25
      A Partnering program must be actively led by the joint leadership team – with specialist support as required
      Develop ICAP, specialist skills, facilitator, coach
      Lead change, transition to BaU, sustain culture
      IBM and Partner Leadership Team
      • Participate as a ‘joint IBM/Client team member
      • Participate in planning
      • Support RM&G consultants
      • Contribute to workshop planning and preparation
      • Support relationship alignment surveys
      • Deploy relationship processes
      • Establish and maintain governance regime
      • Implement and monitor plan
      • Conduct joint relationship management & governance planning with partner
      Relationship Alignment Consultant
      • Conduct in-depth data gathering, analysis and report
      • Design program of work
      • Provide consulting support for IBM / partner teams
      • Facilitate workshops or joint IBM / partner meetings
      • Conduct surveys, analyse and report results
      • Review plans and materials
      • Education
      • Training
      • Coaching / mentoring
      Level of involvement
    • Table of Contents
      Value of Effective Partnering Relationships
      Framework for Effective Partnering
      The Partnering Journey
      References
      13 January 2011
      26
      A case study is available and published as a separate document
    • IBM’s Relationship Alignment Approach and Method itself evolved from a collaboration
      27
      13 January 2011
      The IBM Institute for Business Value is the business research arm of IBM Global Business Services. It focuses on managerial and economic issues faced by companies and governments around the world, publishing between 35 and 50 major studies each year.
      http://www-935.ibm.com/services/us/gbs/thoughtleadership/
      Vantage Partners is a global management consulting firm that specialise in helping companies achieve breakthrough business results by transforming the way they negotiate with, and manage relationships with, key business partners.
      http://vantagepartners.com/
    • 28
      The Global CEO Study 2010 is the fourth biennial CEO study, building on our insights and findings over the last 6 years
      2010
      2008
      2006
      2004
      Capitalizing on Complexity
      Enterprise of the Future
      Innovation
      Your turn!
      Key Findings
      Key Findings
      Key Findings
      Key Findings
      • Rapid escalation of complexity creates need to:
      • Embody creative leadership
      • Reinvent customer relationships
      • Build operating dexterity
      • Hungry for change
      • Demanding customers as opportunity to differentiate
      • Extensive business model innovations
      • Moving towards global business designs
      • Business model innovation matters
      • External collaboration is indispensable
      • Innovation must be orchestrated from the top
      • Revenue growth is the number one priority
      • Responsiveness is a new key competence
      • Improving internal capabilities is a first step toward growth
      1,541 CEO interviews
      1,130 CEO interviews
      765 CEO interviews
      456 CEO interviews
      13 January 2011
      The Global CEO Study 2010 can be downloaded at:
      http://www-935.ibm.com/services/c-suite/ceo/leadership_and_innovation.html
    • 29
      IBM’s book on this new approach has just been published, and it contains a chapter devoted to outsourcing
      "This is an excellent book that provides a pragmatic approach to identifying and alleviating cultural issues created when two groups of people must work together. Effectively blending business cultures is a key requirement for successful outsourcing, and most companies lack the tools necessary to do this. Companies looking to reduce outsourcing risk should follow IBM's Tangible Culture approach.“
      -Lance Travis, vice president, Outsourcing Strategies, AMR Research
      For more information about the book:
      http://www.tangibleculture.com/
      For more information on Right vs. Right:
      http://www.research.ibm.com/thinkresearch/pages/2004/20040604_brain.shtml
    • About the author...
      Alan Williamson
      Alan Williamson is a Senior Managing Consultant in the Strategy and Transformation practice of IBM Global Business Services. Alan has 15 years experience in partnering relationships, business transformation and organisation change across a range of industries and Government in Australia, Asia and Europe.
      Alan is IBM’s lead in partnering relationships and Relationship Alignment for Australia, New Zealand and Asia Pacific
      Alan authored a number of papers on inter-company relationships and was a speaker at an international conference on business collaboration.
      Alan has also facilitated a post-graduate program for RMIT University and has acted as a mentor and coach, both within IBM and his wider professional network.
      Alan has a Masters of Applied Science in Innovation and Service Management. His thesis, titled “Unlocking the Potential of Inter-Company Relationships” draws from hands on experience in helping companies establishing productive and healthy partnering relationships.
      Alan’s partnering clients include:
      Alan can be contacted at: alanwill@au1.ibm.com
      13 January 2011
      30