Who’s really in charge here?
Boards are firmly convinced that collaboration is the way forward and they cheerfully decide with potential partner opposite numbers to work together in harmony because they can make a ton of money. After the celebratory dinner they announce with a fanfare that they are entering a new era. They happily broadcast widely that they are accomplished partners, the shareholders love it!
“Roughly one-third of all material partnership announcements involving public companies triggered a statistically significant stock price impact for at least one partner, with an average share price increase of almost 6%.” The Joint Venture Alchemist, Ankura
The middle managers are told to get on with it. They recognise that more work is expected of them, probably without more resources, and they are not sure what will be different. On top of this, talk of relaxing governance puts them on the back foot because this is very much what they are there to do and they fear losing control.
“Our customer has been talking directly to our supplier behind our back. They say they need to ensure quality standards are met. We are concerned that they are really after our costs!” Operations Manager, Premium Food Manufacturer
The operations staff are also told to get on with it but again without any firm direction about what will be done differently. As a result, they start roaring around doing what they always do, just more of it faster. Their opposite numbers in the partner organisation are in the same boat and sympathy cliches form, for instance between engineers. These relationships can be quite strong and actions can be agreed without reference upwards e.g. design, commercial, etc.
“All engineers want to finish the job and get the lights turned on; getting them to complete the paperwork is difficult.” Project Director, National Infrastructure Project
The sales staff set out to schmooze the partner and customers and are hopeful of getting the next sale. The commercial staff are usually the last to know, they were not involved when the partnership was agreed, they now have to accept reality and manage the contract and, sort out the problems.
“The lack of a clear work specification system and change control audit trail results in disputes over contract amendment, specification and purchasing and poor work planning and delays. The whole thing is a bag of nails.” Head of Commercial, International Energy Facilities Supplier
Despite the Boards illusions that they are ‘accomplished partners’, what all this shows is just how fragmented relationship management is within most organisations. There is no overall management focus and hence the benefits of collaboration remain elusive. There is a simple solution to this sorry situation. The Board recognises the need to appoint a direct report who will have full responsibility for the performance of their strategic alliances from cradle to grave.