Partnerships Flashcards
Concepts of Partnerships
Strategic: - Must take a strategic approach to produce the greatest long-term benefit as opposed to short-term tactical pursuit and opportunism
Long-term: - Approximately 5 years, commitment and consistency is essential for accruing benefit.
Collaborative: - Working together to produce results, will reduce confrontation and strengthens relationship.
Transparent: - Sharing information makes things easier, no need for second guessing.
Trust-based: - A belief of good intent and integrity on both sides is essential in a partnership. Evidence shows a partnership built on trust performance better and enables achievements otherwise difficult.
Joint problem solving and gainsharing: Collaboration and shared resources should result in gainsharing and establishes the spirit of partnership and commitment.
Small no. of partners. - Allows for more focus on important partners. Not for all suppliers.
Contrast this with the “Transactional” approach currently adopted by the organisation.
The transactional approached assumes a mutually antagonistic relationship. Each party pursues their own narrow self-interest. There is no trust within the relationship.
There is a need for legally enforceable contracts and active management of suppliers to ensure they comply with the letter and spirit of the contract.
The focus is short term benefit. Contracts are open to regular re-negotiation and competitive tendering on a regular basis. Suppliers have limited time horizon and will act only for short term benefit.
Describe and evaluate the benefits and risks which might be associated with a transition from a transactional to partnership approach.
The reduction in cost and organisational energy in ‘fighting our corner’ with suppliers and enforcing contractual conditions is a key benefit. This will lead to reduced costs.
Long term commitment and trust allows for more effective cost reduction as costs do not need to be recouped over the length of a short-term contract.
By working together on problems it is likely that more effective solutions will be generated along with associated business benefit.
Trust allows for actions which give benefit but would not occur under mutually antagonistic relationship. Evidence this is the biggest single effect on performance from partnering.
The key risk is lack of commitment and trust. If we do this while still behaving in a self-interested way then the partnership allows for game playing to be far more destructive.
We may also be open to risk if the partner fails as we will have no back up supplier.
Consider how to manage a transition from a transactional approach to a partnership one.
The key thing is to ensure that we are committed to the approach and will not be behaving inappropriately as partners. The performance financial and personal benefits - less hassle - need to be sold effectively.
Carefully research potential partners and engage in discussions to understand their level of commitment, financial stability, willingness to share information etc. Selecting the right partner is key.
Restructure the business operations and measures around partnerships to emphasis the behaviours we want - integrity, collaboration etc.
Train staff in what is required of them in this collaborative environment
When issues arise early make sure we behave with integrity, openness etc. Walk the talk early.
Ensure benefits are noted, recorded and celebrated to demonstrate the effectiveness of the change.
