Review of the Defence Sector – Part 4

“The results have been good but, the increased cost in management time has been huge.”

This chapter in our series on the UK Defence sector considers relationship management, performance management and the impact of relationship appraisal. Where projects recognised the need to manage jointly and approached problems as opportunities to improve performance then the additional effort was worth it. However, not all these UK Defence sector relationships thought so. Generally project team leaders appreciated having a spotlight shone upon their activities and they found the recommendations useful.

Relationship Management

• The additional cost of relationship management was not always recognised

“Although we have produced good results for the end customer, the cost in management time has been huge; far more than anticipated.”

“The company has invested in a Key Account Manager to give the contract the appropriate focus.”

“This relationship is highly dependent on people. We are a small company and unfortunately a shortage of resources limits our ability to focus on developing the relationship.”

• Collaborative kick-start – The initiative required both relationship teams to undertake a ‘break through’ process as a foundation for collaborative working. However in some cases it did not work

“When we first got together with the customer to establish our relationship we put it all up on the wall with an organised industry day and planned working groups to tackle issues. 18 months later they have not changed, we are again walking through treacle.”

“Our joint review of the business was a failure. Instead of adopting a positive attitude to building joint working it turned into a ‘blame game’. Now we are suspicious of each other, co-operation has been lost and some people even feel threatened.”

“We jointly attended a partnership team building workshop to improve our working relationship. The results have been agreed at senior level and we have since seen a steady improvement.”

• Relationship management in practice – Where there was close interaction managing the joint business the relationships were successful.

“A sound, clearly understood working structure of contract and procedures has been an important success factor. Joint presentations externally provide a reinforcing image of the partnership.”

“Currently quotations take a long time to process. I am suggesting 2 monthly meetings with the Customer Commercial Officer to smooth the task.”

“We organised a training day on the customer’s site (without being asked) in order to educate their staff about our company and its products. Knowledge about each other’s’ business is important to our professional relationship.”

“Frequent contacts, even as often as daily, build confidence, reduce risks of misunderstandings and keep the team focussed. Sometimes they would hop a plane and be here. ‘You have a problem: how can we work it out?”

• Lack of management focus – In a number of relationships it was clear that all the key aspects of the joint endeavour were not managed as a single operation

“The support chain is highly disjointed with a mix of in-house and industry participation. There is over-capacity and inefficiency. No one has an overview of the whole.”

“There is a lack of clear lines of responsibility for various aspects of the relationship within the customer.”

“It galls me to know that my staff know more about doing the customer’s jobs than they do.”

“Because all our dealings with the customer seem to concentrate on problems the relationship is poor and we never get to consider the wider picture.”

“It was pure luck that a forward thinking, enlightened team happened to form.”

Performance Management

• Lack of collaborative PIs – Two years into the collaborative working initiative it is evident that in many relationship performance management systems were not in place. In others even though measurements were made their use was not understood.

“There is a gulf in perception between the sides over performance which also extends to the end-customer. We are not sure what costs are so it will be difficult to measure the savings for a partnering agreement. Without a common understanding of how we are doing we cannot move forward.”

“Performance measurement is used but standards are never raised. They have no idea or system for judging our performance. Why invest more time and money for no benefit?”

“We are about to sign an incentivised contract and if they do well they will get paid more but, I have not got the money. Our new procurement procedures are not geared-up for this kind of flexibility.”

“Their performance against the contract continues to decline. I intend to increasingly use the contract to manage the situation.”

“Our standard terms do not include the concept of increasing joint rewards.”

“Their support performance is mediocre at best. I think this is because they don’t see it as a money-earner and thus do not allocate enough manpower resources to supporting the contract.”

• Joint measurements work – In some instances managers worked jointly with their counterparts to develop effective performance systems.

“All stakeholders were involved in the project including the end customers who helped design the performance targets. The same people are involved in implementation.”

“We’re making progress with the company. At our last monthly meeting I was surprised to see they were portraying their performance figures honestly and without massaging.”

Impact of Appraisal

• Shining a light – Two thirds of the relationships were not in the ‘Successful Collaborators’ grouping. In many instances the comments confirmed that the report was a ‘wake-up call’ to the organisation to improve the relationship. It also gave many their first opportunity to consider their relationship objectively with their partner and their stakeholders.

“The fact that the company has pointed out in the report a number of reservations has come as a complete surprise to us. We are going to discuss the matter with them in a special meeting.”

“The report has been very useful; it has provoked a response. We intend to use it as a springboard to improve team working with the customer.”

“It is important that the results of your study are promulgated to the senior levels in the company so that they will allocate more resources to improve the service.”

“I hope the consultants will be able to implement some of the changes implied by your report. We don’t have the time and resources; we are too busy fighting fires.”