In this guest post, Procurement Leaders invites Old St. Labs’ Jordan Early to discuss relationship building through the prism of collaborative supplier engagements.
Let’s be frank for a moment. Relationships are difficult, whether it’s the the Montagues and the Capulets or the relationship a coach shares with his star athlete, difference in opinions and goals mean achieving consensus can be a challenge.
It’s true however that despite these challenges, all great relationships are built around three foundational pillars:
It easy to understate it, but trust is perhaps the most critical factor for success in any relationship.
Beyond money and the basic tenants of our commercial system, trust within corporate relationships allows business partners to openly share ideas without the threat of that information being used against them. Only by trusting one another can businesses hope to work together. The deeper the trust two group share, the deeper, more meaningful and more fruitful those relationships can become. The old 1 + 1 is greater than two adage holds true here.
So, how do we create an environment of trust in our supplier relationships? The truth of the matter is that there is no easy solution. Creating a trusting relationship from scratch or repairing a relationship that has turned sour is a challenge of the tallest order. Sure, there are processes and technologies that can support your endeavours in trust building.
Taking a structured approach allows you to start moving your motivations into an actionable reality, but it’s vital to understand that trust has to be earned and that this process takes time. Beyond the investment of time and committing to processes and supporting technologies, trust building really boils down to people and the integrity they show towards one another, which leads nicely into our next point.
In order to build the trust required to work together collaboratively a level of transparency must be present between the buyer and supplier. Transparency, provides guidance within a relationships by giving each person in the partnership visibility into the goals, motivation and limitations of their partner. Only by understanding one another in more details can two parties look to bold collaborative projects that will benefit both parties.
You’ve probably noticed that there is an intrinsic link between trust and transparency. You simply can’t have one without the other. It’s critical that partners in collaborative supplier relationships understand these linkages and take steps to proactively manage them from a mindset, process and technology point of view.
Often overlooked when engaging in collaborative supplier relationships, compatibility is arguably the kick off point for any integrated relationship. Understanding compatibility is a matter of studying the common ground and differences between those involved in the relationship.
When examining compatibility, organisations should do it through three lenses. The first is at the corporate level, do missions, motivations and success factors of the businesses looking to partner possess significant cross over or are they fundamentally opposed? Secondly, we must understand the interpersonal compatibility of those within the relationship. While easier to remedy that opposing corporate missions, interactions between team members must reach some level of harmony if that relationship is to flourish and deliver to its full potential. Third and finally we must understand the alignment between those individuals involved in the partnership and the motivations and goals of their organisation. We all not that not everyone working for a particular business shares the same values and ethics that their business puts forward.
There you have it, the three pillars that will support any collaborative supplier engagement. While developing an environment where these elements are integrated into your daily interactions with suppliers may be a challenge, and could potentially require a complete rework of your engagement strategy, the benefits of taking such an approach are huge. If you’d like to learn more about the benefits that can reaped from collaborative supplier partnering or would like to read more about the pillars we’ve introduced above download our free white paper on the topic. The framework above is derived from the ‘Getting to We’ book from VESTED you can access that book here.
Jordan Early is head of research and content at Old St. Labs.
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.