By Robert Walterson
We have probably all heard the advice that maintaining a relationship, whether it be in our personal or professional life, requires work. This advice has a lot of truth to it. Just because a relationship starts well, does not mean it will stay that way forever. There will inevitably be disagreements and disputes. If these are not managed well, it can cause the relationship to deteriorate, and in some cases, disintegrate. Sometimes this deterioration may not even be the result of a major issue, but the result of a series of minor ones, or even just a lack of positive interactions. Oftentimes, something small which is kept internal can end up having a large, external impact if it is left unresolved.
In collaborative working, the relationship is the most important asset. It is only within the framework of a strong relationship that business will be willing to take risks, innovate and cooperate in a way which focuses on shared goals rather than individual ones. It prevents opportunistic behaviour and creates an environment which allows truly best-for-project behaviours to flourish. This is especially true the more complex a project is. In these projects, goals can be aspirational, risks unknown, and scope of work defined and evolved as the project progresses. In these situations, being able to rely on your partners is essential.
How is a relationship successfully managed? At multiple different levels and stages, if done effectively through ISO44001, the Collaborative Business Relationships Standard. The ISO44001 contains multiple relational ‘checkpoints’ from clauses 4-8. These checkpoints serve different functions, as they appear at different stages in the relationship lifecycle. Early on in Clauses 4, an initial analysis is conducted to see if a collaborative relationship would even be appropriate for the organisation and its partners, taking into account its industry, structure, and objectives. This checkpoint acts as a ‘gate’, ensuring efficient allocation of (often) scarce resources. Once an opportunity to collaborate has been identified, we move through another gate in clause 6, which looks at the more specific risks and opportunities within the prospective collaborative relationship. It is then determined if, and how, these risks and opportunities can be addressed/ enhanced through collaborative practices. Clause 7 then establishes “the platform to ensure the appropriate allocation of resources”- another example of the focus on efficient resource allocation. Clause 8, the operational stage, begins the implementation of the collaborative working arrangements.
A key phase in this is the joint drafting and implementation of a joint relationship management plan. This is the foundational document the collaborative business relationship will be based upon. It details the key objectives the parties hope to achieve through the relationship, clarifies roles and responsibilities and establishes baseline principles. It also includes processes for measuring the performance of the relationship, if it is furthering the joint business objective and how well it adheres to the founding principles. This includes a variety of ‘hard’ measures, such as performance and project delivery, and ‘soft’ measures, such as openness and honesty.
As stated in the beginning, relationships require work. In the context of business relationships, the required work is formalised principles and processes to adhere to in order to maintain the strength of the relationship. These are monitored and managed by the Senior Executive Responsible, the person from each organisation responsible for ensuring the health of the collaborative relationship. ISO44001 thus takes relationship management seriously, and ensures those in the organisations do likewise. This ensures the relationship continues to remain as strong and healthy as possible.
Practical tips for Effective Relationship Management
Good practice in relationship management often depends on the type of relationship and associated variables, such as industry, available resources, organisational complexity and so on. Nevertheless, there some key treatments which can be applied to all relationships. One such treatment is having a technology which provides a centralised, real-time process for managing changes to contracts. This helps prevent and resolve disputes as it provides a single authoritative copy of the contract. It also reduces inefficiencies, as everyone always has a copy of the most up to date contract available (and therefore does not have to spend time looking for it and disagreeing which one is the most recent). A classic example of this technology is Aconnex. ICW has partnered with Affintext to create its own version of this technology, the Intelligent Document Format technology (IDF). This allows organisations to have up-to-date versions of their contracts and relationship management plans, as well as reminders on their obligations and when they are due by. It also allows any agreed-upon interpretations of the contract to be documented in the contract, as well any lessons-learned. This helps prevent possible disputes from arising in the first place. The IDF is also unique in that it allows the Joint Relationship Management plan and associated collaborative behaviours to be embedded within the fabric of the relationship- providing a common collaborative platform by which to make changes.
We hope you have enjoyed reading about relationship management. Join us next week for a discussion on the importance of aligning internal values and culture with those of external partners.
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ISO44001, the Collaborative Business Relationships Standard