Healthcare Matters

Click here for Part I, Part II, or Part III of this series.

It is interesting to note that despite the fact the word “collaboration” suffers from overexposure, most of us remain challenged to break it down into a practical business context. We hope this series has done more than provide insight, but provoked some thought that can lead to action. Because the vested approach is the right way to do things –at least with your most strategic business partners; that within these relationships, a concerted effort to develop the kinds of meaningful collaboration defined by Kate and Jeanette isn’t a progressive gamble, but actually, a highly conservative and secure approach to managing supply chain risk.

To closeout our “vested series,” we’re going to focus on the last two tenets specifically called out by Jeanette Nyden and Kate Vitasek in their “Getting to We” report.

• Wikidata-Common knowledge: Wikidata means both companies create one set of data to analyze for trends, performance issues and market opportunities. It is inevitable that markets change, end users’ demands change and commodities become more or less scarce. In a Getting to We environment, both partners generate data, much the way internal company wiki’s work. In a traditional negotiation setting, parties use data about performance history as a weapon to extract value from the other party. For example, when companies unilaterally score their suppliers, some suppliers share their disagreement with how their client arrived at the performance rating. A more effective plan is for parties to share the responsibility of collecting and analyzing data. In a relationship that is economically interdependent, it is unwise for one company to be responsible for collecting data while another company analyzes data to score performance. In that scenario, no one trusts the data or the analysis. When Microsoft outsourced their facilities management to Grubb & Ellis, both companies agreed to jointly collect data for the balanced scorecard. Over the course of two years, the gap in expectations and performance closed by 91.5 percent. As the gap closed, employees for both companies grew to trust one another, resulting in tight alignment.

• Are we on the same page? Alignment: Classical negotiation theory suggests that each person approaches negotiation from their own self-interest. While hundreds of books support the need to seek common ground, negotiators are looking for common ground through their self-interest. All too often the common ground is achieved by a series of tradeoffs and concessions—taking an existing pie and trying to divide it. A better approach is to gain alignment about common goals, objectives or a business problem that needs a solution. But aligning around a set of desired outcomes that are bilateral in financial outcomes and have a measureable upside for the end-user means much morethan seeking common ground. Alignment demands a commitment to one vision, one path and one set of actions to achieve that vision. This is a very radical position for negotiation teams who are about to enter into some form of contract negotiation. Another important aspect of alignment is compatibility. Are both companies a cultural fit? Or does one company have a lower set of standards than the other? If you don’t like your business partner, don’t kid yourself into thinking they’d make a good strategic relationship. Traditional negotiating practices undermine trust and rapport between two companies at all levels. Mistrust doesn’t evaporate when the ink on the paper dries—if anything, it continues to fester. The unintended consequences of contentious negotiation practices means neither company has any incentive to work with the other company’s representatives in a transparent, authentic manner to achieve extraordinary financial results. Since traditional negotiation theory encourages people to get to “yes” with the underlying principle to get the best deal for their organization, business people can’t wrap their minds around sitting side-by-side to co-create value day-in and day-out. It is nearly impossible to enter into a highly cooperative relationship to create value if both companies send in their negotiators using traditional negotiation tactics. It’s time business partners used a different negotiation approach to reach strategic partnership agreements. The financial upside of Getting to We is transformational.

We’re lucky, because we’re surrounded by examples of what real collaboration isn’t, but we’re still challenged, because we’re also surrounded by entrenched attitudes that are simply non-starters for those of you really willing to “go for it.”

I do feel compelled to point out that I think a truly vested approach to partnerships can be dangerous for the following reason: You need full commitment. A half measure is a set up for failure. You can’t go two thirds of the way around the track and then lie to your partner. It just doesn’t work that way –nor should it.

Check out Vested Outsourcing.

—Tom Finn