Many people in outsourcing see collaboration as a desirable process that you can only hope for. We believe however that you can actually plan for collaboration to happen.
Most sourcing professional will acknowledge that collaboration is key to their success. They understand that a balanced and harmonious relationship between the client and service provider is a valuable asset allowing them to realize results better and faster. It’s because of this that most sourcing engagements start with the parties patting each other on the back and promises to work together as true partners. Once in the operational stage of the engagement however, many experience that productive collaboration comes less natural than anticipated.
When collaboration doesn’t happen many organizations fall back in their default mode of command and control. We see this particularly in traditional businesses where the parties see sourcing engagements as a zero-sum game where the win of one party results in a loss for the other. This approach makes it all about competing and winning instead of collaborating and succeeding. It is an approach that quickly turns the outsourcing workplace into an unsustainable arena of no-holds-barred competition between the partners that will end up in fracturing the engagement.
Hoping for collaboration
Most people engaged in the governance of sourcing see collaboration as a desirable, yet ineffable or slippery process that cannot be planned for. They believe you can only hope that it will take place. Our conviction however is that collaboration is an operational idea that you can plan for and make it happen systematically.
If you are interested in achieving results, sharing resources, getting innovative ideas, quick decision making, lowering costs or engaging people, you cannot operate on just the hope that you will have some accidental collaboration occasionally. You need to make collaboration systematic, a habit, a culture. This is the collaborative challenge that faces many organizations engaged in outsourcing.
Planning for collaboration however does not mean that the outcome of it can be predicted, but the structure, process and strategy is something we can understand, design and improve. It’s like learning someone to play the guitar. You cannot predict what music they will play as a consequence, but you can give them control of the instrument.
Everyone who has actually been involved in the collaborative governance of outsourcing engagements knows that it can be incredibly frustrating and problematic. Unproductive meetings, endless discussions, wheel spinning and disengagement are just some of the many issues people have experienced. Vangen and Huxham, two British researchers, have come up with a helpful way of thinking about collaboration. They say that in order to improve collaboration we need to understand the competing forces that are always present in collaboration. That is we need to understand the realities that are always present in any collaboration.
On the one hand you have the upside of collaboration such as new ideas and relationships, shared resources, innovative solutions, strengthened networks, increased legitimacy and engagement. They’ve named this collaborative advantage – the synergy that can be created through joint working. On the other hand you have the downside of collaboration. Endless discussions, stalemates, unproductive meetings, lack of participations, etc. They call this collaborative inertia – the tendency for collaborative activities to be frustratingly slow to produce output or uncomfortably ridden with conflict. When people experience the negatives of collaboration the typical response is “I’ll do it myself”.
So we need to think of collaboration as two opposing forces that are always present and need to be managed for the collaboration to be productive. Collaborative advantage is what we’re hoping for but collaborative inertia is the natural state of affairs that we get if we don’t manage it. Think of it as swimming. When you’re in the water and move your limbs in a coordinated fashion you stay afloat and drive your body through the water. But when you stop moving your arms and legs, gravity will take over and pull you down to the bottom. The same is true for collaboration. As soon as you stop doing the right thing, the bad stuff takes over. It is therefor that, if not managed well, sourcing engagements are much more likely to reach collaborative inertia than collaborative advantage.
We need to understand the competing forces of collaboration to develop systems that enable us to work together productively and make better decisions. It’s only when collaborative advantage outweighs collaborative inertia we consider the collaboration to be productive. In outsourcing it’s when the partners work together and realize the intended value of the engagement.
First let’s have a look at collaborative inertia, or the gravity that pulls collaboration under water.
In managing outsourcing arrangements we’re dealing with people from different organizations that have different backgrounds and see things differently, they have different objectives and values that often seem incompatible. Additionally people have interests they want to protect and advance or resources and information they want to control. It’s also hard to get momentum because the effort people put in collaboration to manage the engagement competes with the efforts they have to put in responsibilities within their own organizations.
Although most people involved in managing the engagement have a true intention to collaborate, the reality is that they make choices that are not cooperative, or not as such perceived by the other party. This makes collaboration in the governance of outsourcing often difficult and ambiguous. It can make people loose interest or just go through the motion without yielding any success which is like frantically dieting without actually loosing any weight. This is the inertia that can pull collaboration under water and what has to be overcome if we are to reach collaborative advantage.
Design for collaboration
So what are the swimming strokes for collaboration that can help us achieve and drive collaborative advantage forward. Unfortunately outsourcing is not as streight forward as the world of swimming. It’s complex, divers and dynamic. Every collaborative situation is unique which makes it very context specific. Too specific to develop a straightforward list of rules and laws.
But there are however some basic principles we should adhere to.
We need to focus on collaboration design, or how it is that we develop the capacity to have successful collaboration.
To do this, we need to think of collaboration in terms of structure, process and strategy.
By structure we mean the arrangements of people, logistics of meetings, etc. Who’s at the table and how is the table set?
By process we’re talking about all the ways that people interact, how activities are performed and information is exchanged.
By strategy we mean the decision rules of what to do in any interaction between the parties to the engagement.
Clearly structure, process and strategy are reflexive meaning that they influence each other. Too often people emphasize structure over process. We see this in sourcing contracts that include governance meetings but not their mandates or governance processes. In these situations people get around the table but without a clear objective, mandate, agenda or underpinning processes. These meeting are often dominated by the ‘issue of the day’, result in endless discussions and characterized by stalemates and poor decision taking. Other organizations emphasize process too much and get lost in policies, procedures and reports and loose sight of the big picture. These organizations are characterized by redundancy, wheel spinning and disengagement. Cooperation strategy is something most organizations do not explicitly think about.
There is no common idea on how to respond to specific interactions. People respond to actions from the other party in ways they feel are most appropriate and what comes naturally to them.
When organizations don’t deliberately design and manage collaboration the risk is high that the negative aspects, or collaborative inertia, will inevitably get the upper hand.
Collaboration design considerations
1. Structure and clarity
Claer objectives and key results, roles, strategies, communication and decision paths are critical to keep all parties focused and aligned.
These mechanisms are critical to allow team members act in a structured and coordinated way to achieve objectives. A ‘single source of truth’ and a free flow of information and ideas are critical to keep all parties attuned to everything that is going on.
Motivation is a strong driving force for effective teams. Effective collaboration requires everyone involved to understand and share common goals and feel that they gain something from the collaboration and feel that they are doing something that is personally import to them.
Collaboration benefits from a wide range of skills and expertise in the pool of participants. A diverse team from both the client- and supplier-side that work together in a non-hierarchical manner and who can count on each other to do high quality work on time is critical to success.
The support of the other collaborators in the process is important, especially at times of crisis or unforeseen difficulties.
The focus needs to be on helping each other on solving problems and realizing the objectives and not on placing blame for things that went wrong. The team needs to work on the basis of the trust in what is called a psychological safe workplace.
It’s an environment where it’s safe to take risks and where, if someone has questions or is in need of help, that support would be available.
The team must be able to solve problems together and team members have to fundamentally believe that their contribution matters. Effective problem solving involves dealing with uncertainty, assessing and mitigating risks, evaluating options and solutions, decision making and resolving conflicts. All of this needs to take place near their origin within the team.
However, if conflict solving failed within the team escalation follows in adherence to the agreed escalation mechanism.
Research by Professor Robert Axelrod presented in his book “The Evolution of Cooperation”, has shown “Tit for tat” – meaning “equivalent retaliation” – to be a highly effective cooperation strategy.
Data from the research reveals four properties that make a cooperation strategy successful:
Avoid unnecessary conflict by meeting your commitments as long as the other player does;
Respond firm and decisive when the other party doesn’t meet its commitments;
Respond proportionately when the other party doesn’t meet its commitments and let bygones be bygones.
In outsourcing a proportional response might mean that:
a) on the first defection the defecting party is given the opportunity to implement corrective operational measures
to prevent a second default;
b) upon the second default the defecting party will owe the other party the financial value of the two
c) in case of continuous defaults legal action should be considered.
Be clear and predictive about your behaviour so that the other party can adapt to your pattern of action.