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Collaboration: the key driver for organisational success

The world is increasingly volatile, uncertain, complex and ambiguous (VUCA). Complex issues, increasing inter-dependence and the increasing need for greater innovation confound even the most superbly efficient and well-controlled organisations. To put it simply there is a ‘dense fog’ through which organisations must navigate their way. Consequently, organisations must not only be efficient, they must be effective. As Peter Drucker said, ‘efficiency is doings things right whilst effectiveness is doing the right thing’. For most organisations one of the ‘right thing’ is to enter into strategic partnerships. This can radically improve their organisational agility to identify and capture opportunities more quickly and effectively than their rivals. The trick is, to do it well.

Collaboration allows organisations to achieve goals and objectives that they are not able to do on their own. Some key drivers for collaboration include:

  • Access to new technology
  • Ability to strengthen innovation capabilities
  • Access to new markets and customers
  • Access to larger contracts
  • Risks Reduction

According to a recent McKinsey report over 70% of CEOs expect to engage in new joint ventures in the next 5 years. However, another recent report, cited in the Harvard Business Review is that over 55% of joint ventures fail! Moreover, many of the ‘succeeding’ joint ventures fail to achieve the expected results. Indeed 70% to 80% of mergers and acquisitions fail in terms of creating extra stock market value (strategic Management Journal investigation covering 75 years). Collaboration is a strategic issue, yet organisations are not very good at it.

Some of the major reasons for this failure are:

  • Insufficient attention to setting clear goals for the collaboration
  • Not discovering strategic conflicts early enough
  • Not recognising that everyone must be a winner: the need for mutual benefit
  • Insufficient attention to building trust and demonstrating transparency
  • Not knowing when and how to exit

Underpinning these reasons for failure is the prevailing organisational business model or as Professor Donald Sull in his book ‘The upside of Turbulence’ calls it, the organisations mental map of how the world works. This is a set of assumptions which is ‘hard wired’ into the organisation’s way of thinking. Peter Drucker says, ‘the assumptions on which the organisation was founded will not be the ones which take it forward’.  Yet leaders make sense of situations, taking speedy and appropriate action based on their understanding of what happened in the past.  They try to simplify a complex world. Innovative solutions for customers are therefore limited by what people at the top imagine! This is not because they are incompetent but is because every human being tries to simplify and give the illusion that they can predict and control the future. Encouraging both external and internal collaboration widens the assumptions and makes the business model more fit for the future.

Current assumptions, ‘gut feel decisions’ and a lawyer led contracts often characterise many strategic collaborations. The reasons for collaborative failures demonstrate the need for a better approach. It must be a systematic approach all the way from an organisation’s strategy to a collectively agreed way of working. After much research, we now have a comprehensive framework for successful collaboration. This is ISO44001, the newly created international standard for Collaborative Business Relationships (superseding BS11000). It challenges organisations to have an overarching rationale for strategic collaboration with its senior leadership fully committed. It also requires collaboration risks and opportunities fully integrated into its corporate planning and resourcing. A more detailed approach can then be developed for specific collaborations, resulting in a Relationship Management Plan for that collaboration. This approach has 8 stages namely:

  1. 1.Strategic awareness of specific areas for collaboration, their associated benefits and its alignment with the organisation’s goals
  2. 2.Knowledge of the risks of specific strategic collaborations and the key requirements for successful implementation
  3. 3.Internal assessment of the organisation’s capacity and ability to collaborate
  4. 4.A structured process for partner selection
  5. 5.A structured approach to define how the organisations will collaboratively work together
  6. 6.A joint focus for innovation and the creation of mutual added value
  7. 7.A well thought out way for monitoring and sustaining the relationship over time and through different challenges
  8. 8.A mutually agreed set of conditions and way of ‘exiting’ the relationship.

Each stage has a full list of requirements but this article is a reflection on some critical elements of strategic collaboration.

The business rationale for collaboration, rather than relying on a single focus on competitiveness is being repeatedly reinforced by not only academic studies but ‘real world’ examples. William Muir of MIT observed egg productivity outcomes of 2 groups of chickens: one was cooperative, the other very competitive. Over time, the cooperative chickens thrived and outperformed the other group. In the war in Iraq, General McCrystal formulated his ‘team of teams’ strategy for sharing and developing collective intelligence, empowering junior officers and executing swift, collaborative missions. This proved to be extremely successful. The highly influential speaker, Margaret Heffernan gives numerous examples of the effectiveness of a culture based on ‘helpfulness’. When organisations collaborate, they must purposely create a culture of mutual ‘helpfulness’. This creates a ‘safe’ environment which naturally lends itself to people sharing ideas and trying different things. It is the foundation for more and better innovation. If organisations identify innovation as critical for their survival then the rationale for collaboration is undeniable.

Potential collaborative partners will have different views of the market place and different experiences, perspectives and ways of working. Before any extra added value can be mutually created, these differences and each other’s expectations need to be to be identified and discussed at the beginning of a relationship, well before any contract is signed. Too often organisations ‘jump’ into strategic relationships without first having these difficult discussions. These are the first steps in building a trusting relationship. Having built trust, it is very easy to lose it. Consequently, agreement on how each party benefits from the relationship, measures trust, and shares governance are important points to agree at this early stage to sustain the relationship over its duration.

The types of strategic collaboration can be quite varied. The aim is to establish extra mutual value. They could be with:

  • Suppliers, both large and small
  • Suppliers in different market or product areas
  • Joint ventures
  • Customer led projects
  • Research establishments
  • Professional organisations
  • Different businesses or functions within large organisations.

Building this structure of strategic collaborations helps to create network advantage and business solutions which are more difficult to replicate by competitors. Collaboration means sharing both the ‘pain and the gain’ and finding those collective ways to ensure the relationship succeeds.  Some of the most difficult challenges are to be found within organisations. Too often, organisations are subject to ‘silo thinking’ and an unwillingness to share and adapt for the greater good.  This can create a suspicion in the collaborative partner that the collaboration is only superficial and that the whole organisation is not ‘signed up to it’. Organisational agility to support collaborative partners and the ability to respond to different market conditions are severely hampered. Organisational and cultural change is frequently required yet often poorly done.

Change is complex and subject to being undermined at a surprising number of levels. It is too reliant on a ‘top down’ approach which continually under-estimates the strength and number of these barriers. Not only does it need good leadership but also the active involvement of change champions. Research has shown that in 80% of change programmes directors choose the wrong change champions as they are not well respected or trusted by the organisation’s staff. Consequently, finding the right change champions is vital. Professor Adrian Furnham of UCL, refers to these people as ‘politically savvy’. He states that an ’X’ ray of the organisation should be undertaken to find these people. An analysis of the organisation’s informal networks provides a firm foundation for identifying key enablers and innovators throughout the organisation. The fundamental truth about Informal networks is that they are all based on trust and mutual respect. They provide the real ‘glue’ that keeps organisations together. They are used by people to make their jobs easier and to expand their knowledge. Within these networks there are special people who:

  • Are very well connected (network hubs) and are highly influential
  • Can be considered ‘knowledge diamonds’
  • Naturally collaborate across silos and can leverage these contacts
  • Are natural innovators and are constantly identifying new ways to improve
  • Communicate extremely well with their peers, by putting it into language they understand

Involving these people in designing and implementing the changes required for collaboration significantly improves the chances of success. Nick Chater, a leading behavioural scientist and once a member of the British Government’s ‘Nudge Unit’ describes people’s perception of fairness as being based on their perception that a fair bargain has been made. Involving these influential people creates a sense of fairness in the proposed change. It is referred to as a ‘virtual bargain’. These people are trusted and are capable of being relied upon by the organisation’s leadership. They provide:

  • a safe form of diversity to help challenge existing assumptions and mental maps: for example, actions needed to implement change
  • Discretionary creativity and energy to overcome barriers to change
  • Role model behaviours
  • Knowledgeable feedback
  • Attraction to others as they appeal to people’s ‘head and the heart’: a powerful combination

Leadership (more so than management) is vital to successful collaboration. Leaders need to recognise that collaboration involves cultural change. However, there is a big challenge organisations need to address: it is called ‘wilful blindness’. Recent studies have shown that 85% of managers do not voice their concerns over the way an organisation is led. Consequently, the CEO ‘flies blind’ in a fog within this VUCA world! As General McCrystal realised, he had to dramatically increase his collective intelligence and see more clearly what was happening as quickly as possible. Leadership has been likened to the shadow we produce, meaning the overall environment to allow people to flourish. The collaborative environment leaders need to create is based on the key values of openness and transparency and a powerful common purpose (great collaboration). They also need to be highly connected and used to developing good relationships. In short, they need to be collaborative leaders who easily and willingly share leadership and give positive permissions for others to take up that responsibility. This ability to share is not only important internally (across ‘silos’) but also externally with collaborative partners. The organisation needs a leadership model to which all its directors and managers can aspire to.

Organisational learning and innovation are important ingredients for making collaboration work and deliver added value. Organisations should be ‘organisationally humble’ and willing to adapt. Organisations must not be blind to others’ perceptions and subject to their own ‘group think’. Having a knowledge management system reinforces the collaborative culture of ‘safety and helpfulness’with new organisational habits which will more regularly identify shared learning. This gives leaders new ideas for how to develop their collaborative relationships and to trigger innovation. Innovation is not just product innovation but can arise from different perceptions and learning in such areas as:

  • Logistics
  • Customer experience
  • Whole life performance and costs
  • Outsourcing
  • Design modelling and testing
  • Legacy to the community
  • Etc.

The influencers and innovators in informal networks can help innovation as they are highly connected. Encouraging these networks by higher levels of inter-action will result in the emergence of ingenious solutions to large business challenges and complex problems (sometimes referred to as ‘wicked problems’). This is often termed ‘unpredictable creativity’ and is a direct result of a more connected organisation.

Our increasingly turbulent world brings both big challenges and new opportunities. Strategic collaboration improves organisational agility to respond more effectively to new opportunities. ISO44001 (BS11000) is a very helpful framework to avoid the mistakes of the past and maximise the potential of partnerships. Collaboration does involve change, both organisational and cultural, requiring greater emphasis on collaborative leadership and the involvement of trusted change champions. Mutual added value is the prime motivation for collaboration, and by increasing inter and intra connectivity innovation will significantly increase often creating unexpected solutions in many different areas.  Done well, collaboration will make the organisation fit for the future.

Peter Westbrook

www.key-performance.com

 

BS11000:Collaborative business relationships has developed into an international standard

In March 2017, BS11000:Collaborative business relationships has developed into an international standard; ISO444001. This stamp of approval
recognises the importance of having a complete and logical framework for developing strategic collaborations between organisations. As an international
standard, it can be used more frequently both across countries and within countries that did not have easy access to BS11000.

The change to an international standard has provided the opportunity to clarify and restructure some of the requirements. The standard now has a structure
which is fully aligned with other international management standards such as ISO9001. Some of the key changes are:

  • The need to have a high level organisational Relationship Management Plan which is essentially a strategic document
  • The need to have a Relationship Management Plan for each significant collaboration
  • Increased emphasis on the promotion of collaborative competence and behaviours in the workforce
  • Reinforcement of the importance of Senior Executives’ sponsorship and involvement in the collaborative process
  • The introduction of a specific requirement to focus on a value creation and analysis process
  • Increased need for organisations’ to consider the implications of collaboration on the supply chain and the extended enterprise
  • The need for a more defined engagement strategy
  • Reconfiguration of high level ‘corporate’ requirements into:
    • Clause 4 the over-arching rationale for adopting a more rigorous approach to collaboration
    • Clause 5 the need for leadership to identify collaborative goals, develop policies and processes and allocate resources
    • Clause 6 the importance of an effective risk and opportunity process to consider the actions needed to enhance collaborations in general
    • Clause 7 to ensure the appropriate allocation of resources with the right competence and behaviours
    • Clause 8 the actual operational (BS11000) stages which includes Awareness, Knowledge, internal assessment, Partner Selection, Working together, Value creation, Staying Together, Exit Strategy
    • Clauses 9 & 10 Performance measurement, auditing and review

There will be an 18 month transition period for organisations to make changes from the requirements of BS11000 to those of ISO44001.

Key Performance’s client, Alstom UK & I will be hoping to achieve ISO44001 in June 2017 and in doing so become one of the very first organisations to achieve the revised and new international standard.

   

Key Performance have been advising and supporting Alstom UK and Ireland

Key Performance have been advising and supporting Alstom UK and Ireland develop there Collaborative Process (Corporate Relationship management Plan). It is integrated with the Alstom documented management system. The process includes how Alstom selects and works with strategic partners. It effects not just the documentation but also the culture of the company. It is already paying dividends with a key customer in terms of planning and carrying out more effective and efficient projects. Having this collaborative process, allows Alstom to demonstrate to potential clients their commitment and success in collaborative working. The company hopes to achieve certification in the spring of 2017.

   

Key Performance helps Laing O'Rourke

Key Performance have been heavily involved in helping Laing O’Rourke achieve certification to the increasingly sought after standard, BS11000: Collaborative Business Relationships. This BSI certification was achieved on the 25th of July 2014. The scope of certification covered Laing O’Rourke’s rail sector but the designed Collaboration Process can be extended to cover all Laing O’Rourke’s business sectors.

The Collaboration Process designed by Key Performance’s Peter Westbrook reflects Laing O’Rourke’s fervent desire to be well known as a collaborative company intent on creating added value with its strategic partners and clients. Indeed parts of the new collaboration process were incorporated into the Northern Line Extension bid to London Underground. Clearly this helped secure Laing O’Rourke’s success in securing preferred bidder status.

A practical recent application of Laing O’Rourke’s Collaboration Process was the joint development of a project Relationship Plan for the Willesden contract with Transport for London’s (TFL) London Overground Business Unit. This involved a very successful joint workshop at which a Project Charter was successfully agreed. Over 40 people from 3 organisations attended and all played their part in creating mutual understanding, creating better relationships and forging joint plans.  All agreed that this should be an exemplar project.

Laing O’Rourke’s Collaboration Process relates not just to projects but also to all its other functions so that a common approach is deployed to make each strategic relationship as successful as possible.  For example, this includes the adoption of a collaborative framework which describes the leadership model and desired behaviours that are aimed at when working collaboratively. Consequently each function and every leader bears some responsibility to ensure great collaboration does indeed occur.

   

VolkerRail achieve prestigious ISO44001/BS11000 certification (BS11000: Collaborative Business Partnerships)

October 2013

Key Performance is very pleased to be associated with VolkerRail, as it has significantly helped the company design a pragmatic yet methodical approach to achieving ISO44001/BS11000 certification.

VolkerRail’s MD, Steve Cocliff and Pre-Contracts Director, Steve Moreland have established  a number of very high profile business partnerships with companies like Laing O’Rourke, Murphys etc. Together they have been able to carry out very successful multi million projects on time, to cost and with excellent quality work. Indeed they have been very successful in creating real benefits for clients by constantly innovating and improving various processes. This experience has led to winning new high profile projects such as the £250m Stafford Alliance Improvement Programme with Network Rail.

Steve Cocliff and David Moreland wanted to translate  VolkerRail’s experience into a fully integrated system which not only enhanced its approach to collaboration but also could be assessed by independent accreditation bodies (e.g. BSI) against the requirements of ISO44001/BS11000. Hiring Key Performance Limited provided the extra resource, ‘drive’ and expertise needed to achieve this. On achieving certification, Steve Cocliff wrote:

‘It was a monumental task to achieve this in the timescale we set ourselves and it was only made possible by the commitment and diligence of the whole team involved and the guidance provided by Peter Westbrook’ (of Key Performance Limited).

An interesting aspect of the work needed to achieve ISO44001/BS11000 was to survey the ‘health’ of VolkerRail’s business relationships and for partners and clients to nominate VolkerRail’s key collaborators and innovators. This was very successfully carried out by Informal Networks Limited using a newly devised collaborative scale and ‘Nethidden’ software to map the patterns of collaboration. The result of this was outstanding: everyone was very complimentary about working with VolkerRail. This was a fitting tribute to all the hard work that VolkerRail have put in to make their collaborative partnerships work well and add value to the client’s expectations.


   

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