It seems that collaboration is everywhere nowadays. Whether it is Ed Sheeran and Justin Bieber producing a number 1 single, designer Tommy Hilfiger and Formula 1 driver Lewis Hamilton delivering exclusive clothing lines to Apple putting CarPlay into a variety of cars. Everyone seems to be doing collaborations. But are they all as successful?
Recently, I put on my detective cap like the famous fictional British detective Sherlock Holmes to find out whether individuals and organizations are achieving success including whether they are using updated methods to improve collaboration.
The short answer is no, unfortunately, and a change is long past due!
It seems that most practitioners are forgetting that collaboration really is ‘elementary’ but are omitting a couple of important details. They are still focusing only on both the financial and non-financial benefits. Not much is written in detail about the best ways to collaborate to get desired results.
Isn’t that what we all want? If we prioritize financial gains only, haven’t we blindsided ourselves? I made a similar point in my recent article published in the International Association of Contract and Commercial Management (IACCM) Contracting Excellence Journal.
It’s discouraging that although ISO44001:2001 Collaborative Business Relationships Standard offers an extremely well structured approach for establishing and maintaining collaborative business relationships and provides high level guidance on the process, the standard still does not offer much to help readers design a collaborative contract that gets results for all parties.
My experience is that despite the best intentions of an organization and the individuals within it to collaborate, without the motive, opportunity and means to collaborate, the chance of success is unfortunately very low. This becomes clearer if you take a closer look behind three words: motive, opportunity and means.
Motive (the why)
Prior to any collaboration you need a compelling reason for why either buyer or seller needs to collaborate. Motive reveals why by highlighting the costs and benefits both on an individual basis (e.g. financial reward such as a bonus) and group basis (e.g. reduced costs and improved profitability).
For example, buyer and seller may want to collaborate to mitigate uncertainty in the scope of the commercial arrangement, or to review constantly changing and evolving technology. This is then reflected in the commercial terms of the contract to ensure that both buyer and seller end up with a fair distribution of risk and reward with the arrangement being perceived as neither too generous nor too punitive. Moreover, the benefits of collaboration could be linked to personal financial rewards.
Regardless, both buyer and seller should be clear about the reason why they want to collaborate, because a good motive is the cornerstone to our overall collaborative approach.
Opportunity (the what and the when) provides opportunities for buyers and sellers to collaborate through various events, forums and activities such as formal scheduled meetings, supplier forums, innovation or hackathons, etc.
The opportunity to collaborate needs to be part of the everyday culture for both individuals and organizations, but simply having both the motive and the opportunity is not enough to deliver collaboration. Unless collaboration meetings are formalized as part of our daily, weekly, or monthly working routines, such opportunities will be first to go when schedule and resource pressures occur — and they almost certainly will.
Means (the who and the how) provides detailed guidance on who and how to collaborate when individuals and organizations are brought together through an opportunity.
The means refers to providing the right tools, including policies, guidance and processes so that people will naturally collaborate — assuming they have been given the right motivation and opportunity.
It could be as simple as ensuring the collaboration meetings have specific terms of reference (scope and limitations of collaboration) and standardized agendas. This should ensureeveryone is clear about the roles and responsibilities of each individual and organization. This includes whether a meeting is co-chaired, whether either buyer or seller has an ultimate decision right — and, if there are disputes, how are these resolved?
The means can be even more complicated. Examples could be determining the financial arrangements due to changes in scope, realization of risks, or sharing of cost reductions due to the successful implementation of continuous improvement and innovations.
In my experience, especially in very procedural and hierarchical organizations, if the means are not specified, you will not get the full benefits of a collaborative approach. I’ve summarised this in Figure 1.
Figure 1 : Motive, Opportunity, and Means of Collaboration
So, where does this leave us?
Successful collaboration continues to deliver benefits for both buyer and seller alike resulting in the need for more effective and efficient collaboration in our commercial arrangements. We need to understand the fundamentals even though various policies and practices including guidelines and standards help us with this challenge.
Accordingly, I suggest that we think carefully about the commercial arrangements, and their underlying collaborative architectures to ensure there is motive, opportunity and means to collaborate. After all, at the end of the day, collaboration should be ‘elementary my dear Watson!”